TIDMNFX
RNS Number : 9999T
Nuformix PLC
28 July 2022
28 July 2022
Nuformix plc
("Nuformix" or the "Company" or the "Group")
Annual Results for the year ended 31 March 2022
Nuformix plc (LSE: NFX), a pharmaceutical development company
targeting unmet medical needs in fibrosis and oncology via drug
repurposing, is pleased to announce its audited results for the
year ended 31 March 2022.
Non-executive Directors' Statement
Introduction
Following the departure of Dr Anne Brindley as Chief Executive
Officer, and post period end, Dr Alastair Riddell as Executive
Chairman, both to pursue other opportunities, the key priority for
the directors continues to be to focus on the Company's early-stage
pipeline of preclinical assets and ensure strength in the areas of
drug development, business development and financial control within
the Group. We operate a lean structure with the limited Board and
bring in specialists and consultants, experts in their field, to
support the business as required.
To enhance the Group's funding position to allow the continued
work on the three assets in the pipeline, in December 2021, the
Company undertook an equity fundraise, together with related
sharing agreements, with Lanstead Capital Investors L.P.
("Lanstead"), an institutional investor.
Pipeline
Nuformix has an early-stage pipeline of preclinical assets in
development to address the high unmet medical need in fibrosis and
oncology. We target solutions using our expertise to discover,
develop and file patent applications on novel drug forms of
existing, marketed drugs, that have improved physical properties,
with the aim of developing novel products in new indications to
bring attractive commercial opportunities. Importantly, the
commercial opportunity is optimised when the repurposed product is
differentiated from the original marketed drug by way of either
dose, route of administration or presentation.
Drug repurposing is a well-known and successful strategy for
enhancing the therapeutic and commercial value of marketed drugs,
and their development typically brings a greater probability of
success compared to developing brand new drugs, due to the existing
data that has been generated on the marketed drug. This existence
of data may also result in lower overall development costs and
shorter development timelines.
The Group's business model is to take these assets to key value
inflection points before partnering or licensing. We conduct our
R&D activities through out-sourcing, to enable us to access the
different types of expertise that are needed for drug R&D and
to minimise our operational costs. We have a strong network of
external contractors, with whom we have had relationships over many
years.
NXP002 (new form of tranilast) - Idiopathic Pulmonary Fibrosis
("IPF")
NXP002 is the Group's pre-clinical lead asset and a potential
novel inhaled treatment for IPF and possibly other fibrosing
interstitial lung diseases ("ILDs"). It is a proprietary, new form
of the drug tranilast, to be delivered in an inhaled
formulation.
Idiopathic Pulmonary Fibrosis ("IPF") is a devastating lung
disease associated with a higher mortality rate than many cancers
and where there is a need for additional treatment options. Thus,
IPF represents a high unmet medical need and a significant
commercial opportunity. IPF is classified as a rare disease and
presents a global commercial market that is forecast to grow to
US$8.8bn by 2027. Sales of standard-of-care therapies OFEV and
Esbriet achieved US$2.5bn and US$1bn respectively in 2021.
Tranilast has a long history of safe use as an oral drug for
allergies, but there is evidence that supports its potential in
fibrosis, including IPF. NXP002 is differentiated as it is a new
form of tranilast that is being formulated for delivery direct to
the lungs by inhalation, a new route of administration for this
drug. The inhalation route is a well-known strategy for treatment
of lung diseases to yield greater efficacy and reduce systemic
side-effects compared to oral treatment. Nuformix has two patent
families protecting new forms of tranilast, some members of which
have been granted in major pharmaceutical territories, while others
are still in prosecution. In addition, in March 2022 a method of
use patent application was filed.
NXP002, as a potential treatment for IPF, is a likely candidate
for Orphan Drug Designation which could provide additional product
protection against potential competitors. The positioning of such
an inhaled treatment for IPF could be either added to standard of
care or administered as a monotherapy.
The Company has already generated positive preclinical data on
NXP002, demonstrating that:
- NXP002 can be formulated in a simple and stable solution
suitable for inhaled delivery via nebulisation;
- NXP002 formulations for nebulisation can be efficiently delivered to the lung; and
- NXP002 can dose-dependently regulate the production of
mediators relevant to lung fibrosis and inflammation following a
lipopolysaccharide ("LPS") challenge.
However, as announced post-period end on 30 May 2022, no
conclusions could be drawn from an additional study undertaken to
investigate the duration of action of NXP002 formulations.
Subsequently further studies have been initiated to generate a
robust pre-clinical data package to support the progression of
NXP002, both in terms of product development and business
development discussions.
These studies will directly address issues faced in the duration
of action studies. Firstly, the Company will investigate a new
formulation of NXP002 for inhalation, delivered using an
alternative method designed to ensure consistent and controlled
exposure is achieved. Secondly, the Company will explore a new
range of doses to best optimise efficacy of treatment. The eventual
aim of the studies is to confirm the formulation's positive
pharmacological profile towards the treatment of lung fibrosis and
inflammation via inhalation and to assess its duration of action.
Data from these inhalation studies will add to the Company's
current compelling pre-clinical dataset, to best support the
development of NXP002 as a treatment for IPF and potentially other
poorly treated fibrosing interstitial lung diseases.
Post-period, two abstracts describing NXP002 were peer-reviewed
and accepted for presentation at the European Respiratory Society
("ERS") International Congress 2022 being held in Barcelona on 4-6
September 2022.
NXP001 (new form of aprepitant) - Oncology
NXP001 is a proprietary new form of the drug aprepitant that is
currently marketed as a product in the oncology supportive care
setting (chemotherapy induced nausea and vomiting). On 23 September
2020, Nuformix granted an exclusive option to Oxilio Ltd
("Oxilio"), a privately held pharmaceutical development company, to
license NXP001 globally for oncology indications on terms
previously disclosed. The option was executed on 13 September 2021.
Oxilio is investigating aprepitant for the potential new treatment
of cancer indications. Oxilio has entered into a service agreement
with Quotient Sciences and is conducting formulation development of
NXP001 to determine whether it can achieve the bioavailability and
subsequent dosing regimen required for this new indication.
NXP004 (novel forms of olaparib) - Oncology
The Group has discovered novel forms of olaparib, a drug
currently marketed by AstraZeneca, under the Lynparza(R) brand
name. Lynparza(R) was first approved in December 2014 for the
treatment of adults with advanced ovarian cancer and deleterious or
suspected deleterious germline BRCA mutation. Since then,
Lynparza(R) has secured similar approvals in breast, pancreatic and
prostate cancers with further trials on-going. These approvals have
propelled Lynparza(R) sales to US$2.7bn in 2021 with industry
analysts forecasting annual sales of US$9.7bn by 2028.
The Group has filed two patent applications on these novel forms
of olaparib with the potential for patent life to 2040/2041.
The Company previously demonstrated the enhanced performance of
NXP004 cocrystals compared to olaparib. Subsequently further
preformulation studies have allowed the Company to identify lead
cocrystals from its patent estate to be progressed for further
development.
Post-period, the Company reported that it initiated a programme
of work to progress the NXP004 programme in three key areas:
-- Commence the scale-up of lead cocrystal production processes;
-- Directly compare in-vitro dissolution performance of lead
co-crystals to the marketed Lynparza product; and
-- Based on the results from these studies a formulation
development programme may be initiated. The aims of this work will
be to develop prototype formulations that offer the potential to be
both bioequivalent and 'bio-better' versus the Lynparza
product.
This work will direct and support future out-licensing
discussions for NXP004.
Summary and Outlook
The strategy of the Group is to continue to optimise value from
its existing assets while maintaining tight control of costs. In
particular, the fundraise with Lanstead has enabled the Group to
continue to advance and exploit the current assets within the
portfolio through additional R&D and business development
activities as set out above.
At the appropriate time for each asset, the Group plans to
conduct business development/licensing activities for all its
assets using a structured and data-driven approach, with the goal
of seeking global licensing deals.
The Chairman last year acknowledged that there had been a series
of changes over the years which we also experienced in the past
year and more recently, however our focus and emphasis is on
stability to progress the studies and achieve significant value
creation to generate a real return for shareholders.
We would like to thank all stakeholders and in particular our
shareholders for their continued support and we look forward to the
remainder of the year and beyond with confidence that significant
value can be realised from our portfolio of assets over time.
Julian Gilbert and Maddy Kennedy
Non-Executive Directors
27 July 2022
Enquiries:
Nuformix plc
Dr Julian Gilbert, Non-executive Via IFC Advisory
Director
Maddy Kennedy, Non-executive Director
Stanford Capital Partners Limited
Tom Price / Patrick Claridge (Corporate
Finance) +44 (0) 20 3650 3650
John Howes (Corporate Broking) +44 (0) 20 3650 3652
IFC Advisory Limited
Tim Metcalfe +44 (0) 20 3934 6630
Zach Cohen nuformix@investor-focus.co.uk
About Nuformix
Nuformix is a pharmaceutical development company targeting unmet
medical needs in fibrosis and oncology via drug repurposing. The
Company aims to use its expertise in discovering, developing and
patenting novel drug forms, with improved physical properties, to
develop new products in new indications that are, importantly,
differentiated from the original (by way of dosage, delivery route
or presentation), thus creating new and attractive commercial
opportunities. Nuformix has a pipeline of preclinical assets with
potential for significant value and early licensing
opportunities.
Strategic Report
Review of the Business
A review of the year is given in the Non-Executive Directors'
Statement above.
Risks and uncertainties
The Group's risk management policy is regularly reviewed and
updated in line with the changing needs of the business. Risk is
inherent in all business. Set out below are certain risk factors
which could have an impact on the Group's long-term performance and
mitigating factors adopted to alleviate these risks. This does not
purport to be an exhaustive list of the risks affecting the
Group.
The primary risks identi ed by the Board are:
Strategic risks
-- Funding the business
The biotechnology and pharmaceutical industries are very
competitive, with many major players having substantial R&D
departments with greater resources and nancial support. The Group
aims to execute licensing deals early in the development process in
order to generate revenue to support the business. The Group's lead
asset is targeted towards IPF, a disease area where there is good
precedent for licensing deals at early stages of development.
Without licensing revenue, reliance falls on raising funds from
investors or potential M&A opportunities. Failure to generate
additional funding from these sources, if required, would
compromise the Group's ability to achieve its strategic objectives
as set out in the outlook. There is a material uncertainty around
achieving early licensing deals and, if needed, raising additional
funds. However it is the Directors' reasonable expectation that the
Group has adequate resources to continue to operate as a going
concern for at least twelve months from the date of the approval of
the accounts. In forming this assessment, the Directors have
prepared cash ow forecasts covering the period ending 31 March 2024
that take into account the likely run rate on overheads and
research and development expenditure and the prudent expectations
of income from out-licensing rights to its programmes.
The Subscription proceeds from the Lanstead Sharing Agreements
pursuant to which the Company is entitled to receive back those
proceeds on a pro rata monthly basis over a period of 20 months,
subject to adjustment upwards or downwards each month depending on
the Company's share price at the time. The Sharing Agreement
provides the opportunity for the Company to benefit from positive
future share price performance. Notwithstanding the Subscription
Price of 1.5 pence, shareholders should note that the share price
of the Company needs to be on average over the 20 months of the
Sharing Agreement at or above the Benchmark Price of 2 pence per
share for the Company to receive at least, or more than, the gross
Subscription of GBP1.65million.
-- Feasibility of drug candidates
Pharmaceutical R&D is an inherently risky activity and drug
candidates can fail due to a lack of ef cacy, lack of potency,
unsuitable pharmacokinetic properties, unacceptable toxicology
profile, poor stability of the drug or formulation, poor
performance of the drug product, or other technical issues
unforeseen at the time of candidate selection. This is the main
reason that conventional pharmaceutical R&D takes many years
and billions of dollars to progress a drug from discovery through
to an approved medicine. It is possible that the drug candidates
selected by the Group are found to be non- viable for further
development although the Group's model of repurposing and working
on known drugs allows us to mitigate this risk to a certain
extent.
-- Failure to generate and protect our IP
If our IP rights are not adequately secured or defended against
infringement, or conversely become subject to infringement claims
by others, commercial exploitation could be completely inhibited.
The Group constantly monitors its patents and is prepared to defend
them rigorously.
By virtue of conducting research on known drugs, competitors may
file patent applications on the same drugs as the Group, and thus
there is a risk of securing new granted patents. There is a delay
of up to 18 months in publishing patent applications and thus it is
not always known whether the Group's inventions will be novel. This
is mitigated through knowledge and expertise in identifying new IP
and promptly filing patent applications.
-- Unrealistic goals and timeframes
The Board has a duty to maintain a realistic view of the chances
of success of products, deals and partnerships. Should this not be
managed accurately and appropriately, the Group and its Board and
staff risk nancial, business and reputational damage, whilst its
shareholders become exposed to investment risk and uncertainty over
the Group's viability and status. The Board continually reviews
expectations and communications in the public domain to reduce the
risk of misalignment.
-- Reliance on partners
To progress the development of a drug candidate requires
resources, nancial and otherwise, that are not necessarily
available to the Group. The drug candidates that the Group wishes
to develop may be of interest to third parties capable of providing
these resources, so a partnership (e.g., a co-development
partnership) may provide mutual bene ts and mitigate risks for the
Group. However, the speci c strategic focus of a partner may not
align totally with the Group's objectives. Maintaining a balance in
a partnership is therefore a risk, such as timing, cost sharing,
development decisions. Currently the Group is progressing two of
its three pipeline assets without external co-development partners
and thus this risk is currently minimised.
Operational risks
-- Management, employees, consultants and contractors
With a fully virtual Group operating model with a reliance on
consultants and contractors, the Group's ability to manage day to
day tasks and its relationships with its customers and suppliers
could be undermined by failure to recruit key personnel. The Group
endeavours to offer attractive remuneration and a positive working
environment for all people involved in its projects. The Board are
incentivised as detailed in the Directors' Remuneration Report.
-- Business development risks in terms of timing and success of deal ow
Opportunities to generate value from the portfolio have
increased, but there is a need to generate further data to make the
assets as attractive as possible to potential licensees. The Group
seeks to extract value from its existing pipeline through early
licensing deals once sufficient data are generated, to provide
revenue. Generation of more robust data packages will lead to a
greater probability of successful licensing discussions.
-- Adapting to the external environment - COVID-19
The ability of the Group to quickly adapt to external events
such as the outbreak of COVID-19 may impact the delivery of our
strategy. The pandemic could cause further impact to external
research. Our primary focus remains the safety of our employees.
The Group follows Government advice whilst allowing employees to
work exibly. The risks are also minimised by the Group's virtual
business model, allowing the Board to work remotely and
effectively. Close liaison with contractors ensures that Group
projects are progressed according to agreed timelines and
costs.
Financial risk management
-- Failure to achieve strategic plans or meet targets or expectations
The Group actively and regularly reviews and manages its capital
structure to ensure an optimal capital structure and equity holder
returns, taking into consideration the future capital requirements
of the Group and capital ef ciency, prevailing and projected pro
tability, projected operating cash ows, projected capital
expenditures and projected strategic investment opportunities.
Further detail on the Group's risk management policies and
procedures are set out in Note 20 of the nancial statements.
Financial Highlights
-- Net assets at year-end of GBP4,737,962 (2021: GBP5,686,261)
which includes GBP464,095 cash at bank (2021: GBP1,669,780)
-- The Group delivered a loss on ordinary activities (after tax
credit) for the year of GBP1,108,993 (2021: loss of GBP1,253,497)
and a loss per share of 0.19p (2021: 0.22p). The reported loss is
driven mainly by costs related to the further development of
pipeline assets
-- Total revenue for the year of GBP50,000 (2021: GBP195,550)
Future outlook
The Non-Executive Directors' Statement above gives information
on the outlook of the Group.
Performance
The following are the key performance indicators ("KPIs")
considered by the Board in assessing the Group's performance
against its objectives. These KPIs are:
Financial KPIs
The Group is currently at a stage where the Board considers
availability of cash to fund the planned R&D activities to be
the primary KPI. At 31 March 2022 cash balances totalled GBP464,095
(2021: GBP1,669,780). The Board will consider introducing
additional KPIs to monitor the Group's development as they become
relevant in the future.
-- Meeting nancial targets:
The Group actively and regularly reviews and manages its capital
structure to ensure an optimal capital structure and equity holder
returns, taking into consideration the future capital requirements
of the Group and capital ef ciency, prevailing and projected pro
tability, projected operating cash ows, projected capital
expenditures and projected strategic investment opportunities.
Further detail on the Group's risk management policies and
procedures are set out in Note 20 of the nancial statements.
-- Revenue from collaborative technology licensing agreements:
During the year, collaborative agreements with third parties
entailed providing fee-for-service work and applying Nuformix know
how to their proprietary products. This has provided Nuformix with
limited short-term revenue streams.
The future Group strategy is to prioritise its resources on
progressing its own portfolio to generate licensing revenue.
Non-Financial KPIs
-- Progress of Lead Programmes:
The Group strategy is to generate revenue streams through
applying and further developing its IP to produce proprietary
product opportunities for short-term development and early
out-licensing opportunities. Thus, progression of its assets
towards licensing is crucial to the business.
NXP002: During the year the Group prioritised the development of
NXP002, its IPF candidate, and generated further preclinical data.
Post-period, studies are ongoing to provide a more robust data
package for potential early licensing. In addition, two abstracts
describing the NXP002 were peer-reviewed and accepted for
presentation at the European Respiratory Society ("ERS").
Progression of the planned R&D, filing a patent application and
peer reviewed acceptance of submitted abstracts are important
performance indicators.
NXP001: In the Group signed an exclusive global licensing
agreement with Oxilio to license the NXP001 IP for oncology
indications. Securing the full licensing agreement is an important
performance indicator.
NXP004: During the year, the Group discovered new forms of
olaparib, a commercially attractive oncology drug, and filed an
additional patent application, an important performance
indicator.
-- Co-development with third parties:
Co-development of generic products with third parties, where
Nuformix's knowhow or IP could provide extended patent protection
is a potential business model although the Group is prioritising
its resources on progressing its own portfolio to generate
licensing revenue.
Section 172
The Board considers the interests of the Group's employees and
other stakeholders, including the impact of its activities on the
community, environment and the Group's reputation, when making
decisions. The Board ensures that its decisions offer the best
chance to promote the success of the Group as a whole and consider
the likely and long-term consequences for all stakeholders,
particularly (though not exclusively) considering the
following:
-- How the views and interests of all stakeholders were
represented in the boardroom during the year. Open and honest
discussion at Board level considers the impact on the Group's
stakeholders when reviewing items owing to the Board as part of its
activities, whether this is reviewing strategy, budget or a
business development opportunity.
-- Given the size and stage of development of the Group, the
Board has not formally adopted a mechanism to obtain stakeholder
feedback. However, the Group's Directors can be contacted at
info@nuformix.com should any stakeholders wish to contact the Group
and shareholders may contact the Company's investor relations
adviser, IFC Advisory Limited, at
nuformix@investor-focus.co.uk.
-- The Group's strategy and business model detailed in the
Non-Executive Directors' Statement above
-- How the Group manages risks is set out in the full annual report
-- Corporate governance including how governance supported the
delivery of our strategic objectives in this period is set out in
the annual report
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulations. Company law requires the Directors to prepare
financial statements for each financial year. The Directors are
required by law to prepare the Group and Parent Company 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 Group
and of the profit or loss for that period. In preparing the Company
and Group's financial statements, Companies Act 2006 requires that
Directors:
-- Select suitable accounting policies and apply them consistently;
-- Make judgements and accounting estimates that are reasonable and prudent;
-- State whether applicable under UK-adopted international
accounting standards, have been followed, subject to any material
departures disclosed and explained in the nancial statements;
and
-- Prepare the nancial statements on the going concern basis
unless it is inappropriate to presume that the Group will continue
in business.
The Directors are responsible for keeping adequate accounting
records that are suf cient to show and explain the Group
transactions and disclose with reasonable accuracy at any time the
nancial position of the Group and enable them to ensure that the
nancial statements comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the Group and hence
for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
In the case of each person who was a director at the time of
this report was approved:
-- So far as that Director is aware, there is no relevant audit
information of which the Group's auditor is unaware; and
-- That Director has taken all steps that the director ought to
have taken as a director to make himself aware of any relevant
audit information and to establish that the Group's auditor is
aware of that information.
Auditors
A resolution to reappoint Jeffreys Henry Audit Limited as
auditors will be presented to the members at the Annual General
Meeting in accordance with Section 485(2) of the Companies Act
2006.
Independent Auditor's Report to the Members of Nuformix plc
Opinion
We have audited the financial statements of Nuformix plc
("Parent Company") and its subsidiary (together the "Group") for
the year ended 31 March 2022 which comprise the statement of
comprehensive income, the statements of financial position, the
statements of changes in equity, the statements of cash flows and
notes to the financial statements, including a summary of
significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and
UK-adopted International Accounting Standards.
In our opinion, the financial statements:
-- give a true and fair view of the state of the Group's and of
the Parent Company's affairs as at 31 March 2022 and of the loss
for the year then ended;
-- have been properly prepared in accordance with UK-adopted
International Accounting Standards; and
-- have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the Group
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements, which
indicates that the Group and Parent Company is not in a position
where is it self-financing and will require further funding which
has not yet been secured. Whilst management are confident that such
funding will be achieved there is an inherent material uncertainty
surrounding this. As stated in note 2, these events or conditions,
along with other matters set out in note 2, indicate that a
material uncertainty exists that may cast significant doubt on the
Group and Parent Company's ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the
Directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the Directors' assessment of the Group's ability to
continue to adopt the going concern basis of accounting included,
as part of our risk assessment, review of the nature of the
business of the Group, its business model and related risks
including where relevant the impact of the COVID-19 pandemic, the
requirements of the applicable financial reporting framework and
the system of internal control. We evaluated the Directors'
assessment of the Group's ability to continue as a going concern,
including challenging the underlying data and key assumptions used
to make the assessment, and evaluated the Directors' plans for
future actions in relation to their going concern assessment.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the Directors made
subjective judgments, for example in respect of significant
accounting estimates that involved making assumptions and
considering future events that are inherently uncertain. As in all
of our audits we also addressed the risk of management override of
internal controls, including evaluating whether there was evidence
of bias by the Directors that represented a risk of material
misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the
Group, its accounting processes, its internal controls and the
industry in which it operates.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
In addition to the matter described in the material uncertainty
related to going concern section above, we have determined the
matters below to be the key audit matters to be communicated in our
report.
Below is not a complete list of all risks identified by our
audit.
Key Audit Matter How our audit addressed the Key
Audit Matter
Impairment of goodwill Our key procedures, among others,
included:
At 31 March 2022, the Group
had goodwill of approximately * assessing the appropriateness of the VIU calculations
GBP4,023,000 (2021: GBP4,023,000) used by the management to estimate recoverable amount
arising from acquisition of of CGU;
business in prior years.
For the purpose of assessing * reconciling key input data applied in the VIU
impairment on goodwill arising calculations to reliable supporting evidence; and
from business combination, goodwill
is allocated to a single cash
generating units ('CGU') and * challenging the reasonableness of key assumptions
the recoverable amount of the based on our knowledge and understanding of the
CGU was determined with reference business and industry.
to value-in-use (the 'VIU')
calculations using cash flow
projections. In carrying out * obtaining evidence of the commercial and technical
the impairment assessment, significant feasibility of the patents owned by the subsidiary.
management judgement was used
to determine the key assumptions
underlying the VIU calculations.
We have identified the above
matter as a key audit matter
because goodwill is material
to the Group and the estimation
of recoverable amount of the
CGU involved a significant degree
of management judgement and
therefore was subject to an
inherent risk of error.
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Carrying value of investment We have performed the following
in subsidiary and recoverability audit procedures:
of intercompany balance - parent
company financial statements * Reviewed management's plan of future operating
only. cashflows of the subsidiary; and
The Company had investment in
a subsidiary of GBP4,023,484, * obtaining evidence of the commercial and technical
net of impairment of GBP7,226,516, feasibility of the patents owned by the subsidiary
at the year ended 31 March 2022.
The amount due from a subsidiary
was fully impaired at the year Based on the audit work performed,
ended 31 March 2022. We identified we are satisfied with management's
there was a risk in relation assertion on the impairment charged
to the impairment on the investment on the investment in a subsidiary
held within the parent company and the amount due from a subsidiary
financial statements in its on the parent company financial
subsidiary. statements.
Management's assessment of the
recoverable amount of investment
in a subsidiary requires estimation
and judgement around assumptions
used, including the cash flows
to be generated from the continuing
operations of the subsidiary.
Changes to assumptions could
lead to material changes in
the estimated recoverable amount,
impacting the value of investment
in the subsidiary and impairment
charges.
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Our application of materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and in aggregate on
the financial statements as a whole.
Based on our professional judgment, we determined materiality
for the financial statements as a whole as follows:
Group financial statements
Overall materiality GBP63,000
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How we determined it 5% of net loss
-------------------------------------------------
Rationale for benchmark The group as a whole is currently focused
applied on the development of its Intellectual
Property (IP), and as such the users of
the financial statements will be most concerned
with the expenditure incurred in furthering
these IP assets. As such, the most appropriate
basis for the group materiality is net
profit/loss.
-------------------------------------------------
We agreed with the Board of Directors that we would report to
them misstatements identified during our audit above GBP3,150 as
well as misstatements below those amounts that, in our view,
warranted reporting for qualitative reasons.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We
have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion the part of the directors' remuneration report to
be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and
its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the
directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
-- adequate accounting records have not been kept by the Group,
or returns adequate for our audit have not been received from
branches not visited by us; or
-- the Group financial statements and the directors'
remuneration report to be audited are not in agreement with the
accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement above, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the
directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above and on the Financial Reporting
Council's website, to detect material misstatements in respect of
irregularities, including fraud.
The extent to which our procedures are capable of detecting
irregularities, including fraud
Our approach to identifying and assessing the risks of material
misstatement in respect of irregularities, including fraud and
non-compliance with laws and regulations, was as follows:
-- the senior statutory auditor ensured the engagement team
collectively had the appropriate competence, capabilities and
skills to identify or recognise non-compliance with applicable laws
and regulations;
-- we identified the laws and regulations applicable to the
Group through discussions with the Directors, and from our
commercial knowledge and experience of the biotech sector;
-- we focused on specific laws and regulations which we
considered may have a direct material effect on the financial
statements or the operations of the group, including Companies Act
2006, taxation legislation, data protection, anti-bribery,
employment, environmental, health and safety legislation and
anti-money laundering regulations;
-- we assessed the extent of compliance with the laws and
regulations identified above through making enquiries of management
and inspecting legal correspondence; and
-- identified laws and regulations were communicated within the
audit team regularly and the team remained alert to instances of
non-compliance throughout the audit.
We assessed the susceptibility of the group's financial
statements to material misstatement, including obtaining an
understanding of how fraud might occur, by:
-- making enquiries of management as to where they considered
there was susceptibility to fraud, their knowledge of actual,
suspected and alleged fraud;
-- considering the internal controls in place to mitigate risks
of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and
override of controls, we:
-- performed analytical procedures to identify any unusual or unexpected relationships;
-- tested journal entries to identify unusual transactions;
-- assessed whether judgements and assumptions made in
determining the accounting estimates set out in Note 2 of the
financial statements were indicative of potential bias;
-- investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance
with laws and regulations, we designed procedures which included,
but were not limited to:
-- agreeing financial statement disclosures to underlying supporting documentation;
-- reading the minutes of meetings of those charged with governance;
-- enquiring of management as to actual and potential litigation and claims;
-- reviewing correspondence with HMRC and the group's legal advisor.
There are inherent limitations in our audit procedures described
above. The more removed the laws and regulations are from financial
transactions, the less likely it is that we would become aware of
non-compliance. Auditing standards also limit the audit procedures
required to identify non-compliance with laws and regulations to
enquiry of the directors and other management and the inspection of
regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to
detect than those that arise from error as they may involve
deliberate concealment or collusion.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Other matters we are required to address
We were appointed by the Board of Directors on 18 February 2022
to audit the financial statements for the year ended 31 March 2022.
Our total uninterrupted period of engagement is 1 year, covering
the year ended 31 March 2022.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the Group and we remain independent of the
Group in conducting our audit.
Our audit opinion is consistent with the additional report to
the Board of Directors.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Group's members those matters we are required to state to them in
an Auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Group and the Group's members as a body, for
our audit work, for this report, or for the opinions we have
formed.
Sanjay Parmar
(Senior statutory auditor)
For and on behalf of Jeffreys Henry Audit Limited (Statutory
Auditor)
Finsgate
5-7 Cranwood Street
London EC1V 9EE
Date: 27 July 2022
Financial Statements
Consolidated Statement of Comprehensive Income
for the year-ended 31 March 2022
31 March 31 March
Note 2022 2021
GBP GBP
=========== ===========
Revenue 3 50,000 195,550
Cost of sales (1,695) (62,307)
=========== ===========
Gross pro t 48,305 133,243
Administrative expenses (1,318,577) (1,507,221)
Other operating income 4 - 1,300
=========== ===========
Operating loss 5 (1,270,272) (1,372,678)
Finance costs 6 - (3,054)
=========== ===========
Loss before tax (1,270,272) (1,375,732)
Income tax credit 10 161,279 122,235
=========== ===========
Loss for the year and total comprehensive
loss for the year (1,108,993) (1,253,497)
=========== ===========
Loss per share - basic and diluted 11 (0.19)p (0.22)p
The above results were derived from continuing
operations.
The accompanying notes to the nancial statements form an
integral part of the nancial statements.
Consolidated Statement of Financial Position
As at 31 March 2022
Registration number: 09632100
31 March 31 March
Note 2022 2021
GBP GBP
------------ ------------
Assets
Non-current assets
Property, plant and equipment 12 438 957
Intangible assets 13 4,150,411 4,186,868
------------ ------------
4,150,849 4,187,825
Current assets
Trade and other receivables 14 199,600 32,260
Income tax asset 161,279 121,020
Cash and cash equivalents 15 464,095 1,669,780
------------ ------------
824,974 1,823,060
------------ ------------
Total assets 4,975,823 6,010,885
Equity and liabilities
Equity
Share capital 16 615,609 591,609
Share premium 6,500,817 6,384,835
Merger relief reserve 10,950,000 10,950,000
Reverse acquisition reserve (8,005,195) (8,005,195)
Share option reserve 2,026,664 2,005,952
Retained earnings (7,349,933) (6,240,940)
------------ ------------
Total equity 4,737,962 5,686,261
Current liabilities
Trade and other payables 19 237,861 324,624
237,861 324,624
------------ ------------
Total equity and liabilities 4,975,823 6,010,885
------------ ------------
The accompanying notes to the nancial statements form an
integral part of the nancial statements.
Consolidated Statement of Changes in Equity
For the year-ended 31 March 2022
Reverse
Merger acquisition Share option Retained
Share premium relief reserve reserve earnings Total
Share capital GBP reserve GBP GBP GBP GBP
GBP GBP
-------------- -------------- -------------- -------------- ------------ -------------- ----------- -----------
At 1 April
2021 591,609 6,384,835 10,950,000 (8,005,195) 2,005,952 (6,240,940) 5,686,261
Loss for the
year and
total
comprehensive
loss - - - - - (1,108,993) (1,108,993)
Issue of share
capital 24,000 145,982 - - - - 169,982
Share issue
costs - (30,000) - - - - (30,000)
Share and
warrant based
payment - - - - 20,712 - 20,712
-------------- -------------- -------------- ------------ -------------- ----------- -----------
At 31 March
2022 615,609 6,500,817 10,950,000 (8,005,195) 2,026,664 (7,349,933) 4,737,962
-------------- -------------- -------------- ------------ -------------- ----------- -----------
Reverse
Merger acquisition Share option Retained
Share capital Share premium relief reserve reserve earnings Total
GBP GBP reserve GBP GBP GBP GBP
GBP
-------------- -------------- -------------- ------------- ------------- -------------- ----------- -----------
At 1 April
2020 490,145 4,480,400 10,950,000 (8,005,195) 1,814,613 (4,987,443) 4,742,520
Loss for the
year and
total
comprehensive
loss - - - - - (1,253,497) (1,253,497)
Issue of share
capital 101,464 2,113,535 - - - - 2,214,999
Share issue
costs - (209,100) - - - - (209,100)
Share and
warrant based
payment - - - - 191,339 - 191,339
-------------- -------------- -------------- ------------- ------------- -------------- ----------- -----------
At 31 March
2021 591,609 6,384,835 10,950,000 (8,005,195) 2,005,952 (6,240,940) 5,686,261
The accompanying notes to the nancial statements form an
integral part of the nancial statements.
Consolidated Statement of Cash Flows
for the year-ended 31 March 2022
31 March 31 March
2022 2021
Note GBP GBP
Cash ows from operating activities
Loss for the year (1,108,993) (1,253,497)
Adjustments to cash ows from non-cash
items
Depreciation and amortisation 12,13 36,976 93,052
Loss on disposal of plant, property
and equipment 12 - 6,179
Finance costs 6 - 3,054
Income tax credit 10 (161,279) (122,235)
Share and warrant based payment 20,712 191,339
------------ ------------
(1,212,584) (1,082,108)
Working capital adjustments
(Increase)/Decrease in trade and
other receivables 14 (167,340) 47,237
(Decrease)/Increase in trade and
other payables 19 (86,763) 16,099
------------ ------------
Cash consumed by operations (1,466,687) (1,018,772)
Income taxes received 10 121,020 173,606
------------ ------------
Net cash used in operating activities (1,345,667) (845,166)
Cash ows from investing activities
Acquisitions of property plant and
equipment 12 - (605)
Disposals of property plant and equipment 12 - 44,322
Net cash from investing activities - 43,717
Cash ows from nancing activities
Issue of shares (net of costs) 139,982 2,005,899
Interest paid 6 - (3,054)
Reduction in other loans 19 - (75,388)
Net cash from nancing activities 139,982 1,927,457
------------ ------------
Net increase/(decrease) in cash and
cash equivalents (1,205,685) 1,126,008
------------ ------------
Cash and cash equivalents at 1 April 1,669,780 543,772
Cash and cash equivalents at 31 March 464,095 1,669,780
------------ ------------
The accompanying notes to the nancial statements form an
integral part of the nancial statements
Notes to the Consolidated Financial Statements
for the year-ended 31 March 2022
1. General information
Nuformix plc ("the Company") and its subsidiary (together, "the
Group") operate in the eld of pharmaceutical development targeting
unmet medical needs in fibrosis and oncology via drug
repurposing.
The Company is a public limited company which is listed on the
Standard List of the London Stock Exchange, domiciled in the United
Kingdom ("the UK") and incorporated in England and Wales.
The address of its registered of ce is 6th Floor, 60 Gracechurch
Street, London, EC3V 0HR.
The company operates in a virtual manner and as such does not
have a principal place of business.
2. Summary of Significant Accounting policies
Basis of preparation
On 31 December 2020, IFRS as adopted by the European Union at
that date was brought into UK law and became UK-adopted
International Accounting Standards, with future changes being
subject to endorsement by the UK Endorsement Board. Nuformix plc
transitioned to UK-adopted International Accounting Standards in
its Group and Parent Company financial statements on 1 April 2021.
This change constitutes a change in accounting framework. However,
there is no change on recognition, measurement or disclosure in the
financial year reported as a result of the change in framework.
These Group and Parent Company financial statements were
prepared in accordance with UK-adopted International Accounting
Standards and with the requirements of the Companies Act 2006 as
applicable to companies reporting under those standards.
The financial statements of the Group and the Parent Company
have been prepared on accrual basis and under historical cost
convention. The nancial statements are presented in Pounds Sterling
which is the Group's functional and presentational currency.
New Standards and Interpretations
No new standards, amendments or interpretations, effective for
the first time for the period beginning on or after 1 April 2021
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
--------- ---------------------------------- ----------------
IAS 1 Classification of liabilities as Not earlier
current or non-current than 1 January
2024
IAS 1 Disclosure of accounting policies 1 January 2023
IAS 8 Accounting estimates 1 January 2023
IAS 12 Deferred tax related to assets 1 January 2023
and liabilities arising from a
single transaction
IFRS 17 Insurance contracts 1 January 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
Going concern
The nancial statements have been prepared on the going concern
basis of preparation which, inter alia, is based on the Directors'
reasonable expectation that the Group and Parent Company has
adequate resources to continue to operate as a going concern for at
least twelve months from the date of approval of these financial
statements. In forming this assessment, the Directors have prepared
cash ow forecasts covering the period ending 31 March 2024 that
take into account the likely run rate on overheads and research and
development expenditure and the estimates of the possibilities of
raising funds through issues of equity and have considered
alternative strategies should projected income be delayed or fail
to materialise.
The Group is not in a position for self-financing and will
require further funding which has not yet been secured. Whilst the
Directors understand the risks and issues around raising further
funds through an equity raise, this will be carefully considered,
as and when appropriate.
These circumstances indicate the existence of an inherent
material uncertainty, which may cast a significant doubt on the
Group's and Parent Company's ability to continue as a going
concern, when in twelve - eighteen months' time a thorough review
of funding will be required. However, these scenarios have already
been considered and will continue to be closely monitored by the
Directors. The nancial statements do not include any adjustments
that would result if the company or Group was unable to continue as
a going concern.
The Directors have carried out a thorough review of costs and
are clear on the development work to be completed. Discretionary
costs have been carefully reviewed and reduced where reasonable to
do so while continuing to allow the prudent running of the
business.
After careful consideration, the Directors consider that they
have reasonable grounds to believe that the Group can be regarded
as a going concern and for this reason they continue to adopt the
going concern basis in preparing the Group's nancial
statements.
Critical Accounting Estimates and Judgements
The preparation of these nancial statements under UK-adopted
International Accounting Standards requires the use of estimates
and assumptions that affect the reported amounts of assets and
liabilities at the date of the nancial statements and the reported
amounts of revenues and expenses during the reporting year. These
estimates and assumptions are based upon management's knowledge and
experience of the amounts, events or actions. Actual results may
differ from such estimates.
The critical accounting estimates are considered to relate to
the following:
Intangible assets
The Group recognises intangible assets in respect of goodwill
arising on consolidation. This recognition requires the use of
estimates, judgements and assumptions in determining whether the
goodwill is impaired at each year end.
Share options
The Group's fair values equity-settled share-based payment
transactions using the Black-Scholes model. The use of the models
involves judgements and estimates including an assessment of
whether the shares will vest. Should actual future outcomes differ
from these assessments the amounts recognised on a straight-line
basis would vary from those currently recognised.
Basis of consolidation
The Group's financial statements consolidate those of the parent
company and its subsidiary as of 31 March 2022. Its subsidiary has
a reporting date of 31 March.
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.
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.
Revenue recognition
Revenue comprises the fair value of the consideration received
or receivable for the sale of goods and provision of services in
the ordinary course of the Group's activities. Revenue is shown net
of sales/value added tax, returns, rebates and discounts and after
eliminating sales within the Group.
The Group recognises revenue when:
-- the amount of revenue can be reliably measured;
-- it is probable that future economic bene ts will ow to the entity; and,
-- speci c criteria have been met for each of the Group
activities, such as the demonstration of milestone achievements in
research or acceptance by both parties.
Segmental information
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 year the Group
operated in the single business segment of the research and
development of pharmaceutical products using technology developed
by the Group.
Taxation
Taxation comprises current and deferred tax. Current tax is
based on taxable profit or loss for the period. Taxable pro t
differs from net pro t or loss as reported in the income statement
because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are
never taxable or deductible. The Group's current tax asset is
calculated using tax rates that have been enacted or substantively
enacted at 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.
Property, plant and equipment
Property, plant and equipment is stated in the statement of
nancial position at cost, less any subsequent accumulated
depreciation and subsequent accumulated impairment losses.
The cost of property, plant and equipment includes directly
attributable incremental costs incurred in their acquisition and
installation.
Depreciation
Depreciation is charged to write off the cost of assets over
their estimated useful lives, as follows:
Asset class Depreciation method and
rate
------------------- ------------------------
Computer equipment 33.33% straight line
Goodwill and Intangible assets
Goodwill arising on the acquisition of an entity represents the
excess of the cost of acquisition over the Group's interest in the
net fair value of the identi able assets, liabilities and
contingent liabilities of the entity recognised at the date of
acquisition. Goodwill is initially recognised as an asset at cost
and is subsequently measured at cost less any accumulated
impairment losses. Goodwill is held in the currency of the acquired
entity and revalued to the closing rate at each reporting year
date.
Goodwill is not amortised, but it is tested for impairment
annually, or more frequently if events or changes in circumstances
indicate that it might be impaired and is carried at cost less
accumulated impairment losses. Gains and losses on the disposal of
an entity include the carrying amount of goodwill relating to the
entity sold.
Goodwill is allocated to cash-generating units ("CGUs") for the
purpose of impairment testing. The allocation is made to those CGUs
or groups of CGUs that are expected to bene t from the business
combination in which the goodwill arose. The Group currently has
only one CGU.
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.
Amortisation is provided on the Group's patents to write off the
cost, less any estimated residual value, over their expected useful
economic life on a 10% straight line basis.
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.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call
deposits, and other short-term highly liquid investments that are
readily convertible to a known amount of cash and are subject to an
insigni cant risk of changes in value.
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.
Financial liabilities
The Group's financial liabilities include other payables.
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.
Equity
Equity comprises the following:
-- "Share capital" represents the nominal value of equity shares.
-- "Share premium" represents the amount paid for equity shares over the nominal value.
-- "Reverse acquisition reserve" arises due to the elimination
of the Company's investment in Nuformix Technologies Limited.
-- "Merger relief reserve" represents the share premium arising
on issue of shares in respect of the reverse acquisition
takeover.
-- "Share option reserve" represents the fair value of options issued.
-- "Retained earnings" represents retained earnings/losses.
De ned contribution pension obligation
A de ned contribution plan is a pension plan under which xed
contributions are paid into a separate entity and has no legal or
constructive obligations to pay further contributions if the fund
does not hold suf cient assets to pay all employees the bene ts
relating to employee service in the current and prior years.
For de ned contribution plans contributions are paid into
publicly or privately administered pension insurance plans on a
mandatory or contractual basis. The contributions are recognised as
employee bene t expense when they are due. If contribution payments
exceed the contribution due for service, the excess is recognised
as an asset.
Share based payments
Equity-settled share-based payments to employees and others
providing similar services are measured at the fair value of the
equity instruments at the grant date. The fair value excludes the
effect of non-market-based vesting conditions. Details regarding
the determination of the fair value of equity-settled share-based
transactions are set out in note 18.
The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Group's estimate of the
number of equity instruments that will eventually vest. At each
reporting date, the Group revises its estimate of the number of
equity instruments expected to vest as a result of the effect of
non-market-based vesting conditions. The impact of the revision of
the original estimates, if any, is recognised in pro t or loss such
that the cumulative expense reflects the revised estimate, with a
corresponding adjustment to reserves.
Equity -- settled share -- based payment transactions with
parties other than employees are measured at the fair value of the
goods or services received, except where that fair value cannot be
estimated reliably, in which case they are measured at the fair
value of the equity instruments granted, measured at the date the
entity obtains the goods or the counterparty renders the
service.
For cash -- settled share -- based payments, a liability is
recognised for the goods or services acquired, measured initially
at the fair value of the liability. At each reporting date until
the liability is settled, and at the date of settlement, the fair
value of the liability is remeasured, with any changes in fair
value recognised in pro t or loss for the year.
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.
Investment in subsidiaries
Investments in subsidiaries are carried in the Company's balance
sheet at cost less accumulated impairment losses. On disposal of
investments in subsidiaries the difference between disposal
proceeds and the carrying amounts of the investments are recognised
in pro t or loss.
3. Revenue
The analysis of the Group's revenue for the year from continuing
operations is as follows:
2022 2021
GBP GBP
====================== ====== =======
Rendering of services - 195,550
Licensing Fees 50,000 50,000
------ -------
50,000 195,550
------ -------
4. Other operating income
The analysis of the Group's other operating income
for the year is as follows:
2022 2021
GBP GBP
=================================================== ==== =====
Miscellaneous other operating income - 1,300
5. Operating loss
Arrived at after charging
2022 2021
GBP GBP
==================================================== ======= =======
Depreciation expense (including lease depreciation) 519 32,058
Amortisation expense 36,457 60,994
Loss on disposal of tangible xed assets - 6,179
Research and development expenditure 572,921 362,878
Share option and warrant charge 20,712 191,399
Details of the share-based payments can be
found in Note 17.
6. Finance income and costs
2022 2021
GBP GBP
============================== ==== =====
Finance costs
Interest on lease liabilities - 3,054
Total nance costs - 3,054
==== =====
7. Staff costs
The aggregate payroll costs (including directors'
remuneration) were as follows:
2022 2021
GBP GBP
================================================== ======= =======
Wages and salaries 197,983 388,594
Social security costs 18,533 36,404
Pension costs, de ned contribution scheme 1,721 3,870
======= =======
218,237 428,868
======= =======
The average number of persons employed by the Group (including
directors) during the year and analysed by category was as
follows:
2022 2021
No. No.
---- ----
Research and development 2 3
Non-executive directors 2 2
---- ----
Total 4 5
8. Directors' remuneration
The Directors' remuneration for the year was as follows:
2022 2021
GBP GBP
============= ======= =======
Remuneration 197,983 311,096
Further information of warrants and options granted to the Directors
is set out in note 17.
During the year, the number of Directors who were receiving
pension bene ts was as follows:
2022 2021
No. No.
=========================================================== ===== =====
Accruing bene ts under money purchase pension
scheme 2 2
Details of the total remuneration paid for the services of the
directors are set out in the Remuneration Report.
In respect of the highest paid director:
2022 2021
GBP GBP
========================================== ========= =========
Remuneration 72,143 97,000
========= =========
9. Auditors' remuneration
2022 2021
GBP GBP
========================================== ========= =========
Audit of the nancial statements - Group 34,000 34,000
Audit of the nancial statements - Company 19,000 19,000
Audit related assurance service - 5,000
10. Income tax
Tax (credited) in the income statement
2022 2021
GBP GBP
========================================== ========= =========
Current taxation
UK corporation tax (161,279) (121,020)
Adjustment in respect of prior years - (1,215)
--------- ---------
(161,279) (122,235)
--------- ---------
The tax on loss before tax for the year is lower than (2021:
lower than) the standard rate of corporation tax in
the UK of 19% (2021: 19%).
The differences are reconciled below:
2022 2021
GBP GBP
=================================================== =========== ===========
Loss before tax (1,270,272) (1,375,732)
=========== ===========
Corporation tax at standard rate 19% (241,352) (261,389)
Excess of depreciation over capital allowances 6,932 7,036
Expenses not deductible 3,935 36,354
Tax losses for which no deferred tax asset
was recognized 138,601 149,052
Adjustment in respect of research and development
tax credit (69,396) (52,073)
Adjustment in respect of prior years - (1,215)
=========== ===========
Total tax credit (161,279) (122,235)
=========== ===========
No deferred tax asset has been recognised as the Directors
cannot be certain that future pro ts will be suf cient for this
asset to be realised. As at 31 March 2022 the Group has tax losses
carried forward of approximately GBP4,853,000 (2021:
GBP4,120,000).
11. Loss per share
Loss per share is calculated based on the weighted average
number of shares outstanding during the period. Diluted loss per
share is calculated based on the weighted average number of shares
outstanding and the number of shares issuable as a result of the
conversion of dilutive nancial instruments.
2022 2021
GBP GBP
----------- -----------
Loss after tax (1,108,993) (1,253,497)
Weighted average number of shares -
basic and diluted 598,447,724 580,629,372
Basic and diluted loss per share (0.19)p (0.22)p
There is no difference between the basic and diluted earnings
per share as the effect would be to decrease earnings per
share.
12. Property, plant and
equipment
Computer
equipment Total
GBP GBP
------------------------ --- ========== =======
Cost
At 1 April 2021 1,561 1,561
Additions - -
Disposals - -
========== =======
At 31 March 2022 1,561 1,561
========== =======
Depreciation
At 1 April 2021 604 604
Charge for the year 519 519
Eliminated on disposal - -
========== =======
At 31 March 2022 1,123 1,123
========== =======
Carrying amount
At 31 March 2022 438 438
========== =======
At 31 March 2021 957 957
========== =======
13. Intangible assets
Goodwill Patents Total
GBP GBP GBP
====================== ========= ======== =========
Cost
At 1 April 2021 4,023,484 449,611 4,473,095
Additions - - -
Written-off - (85,035) (85,035)
========= ======== =========
At 31 March 2022 4,023,484 364,576 4,388,060
========= ======== =========
Amortisation
At 1 April 2021 - 286,227 286,227
Amortisation charge - 36,457 36,457
On written-off - (85,035) (85,035)
========= ======== =========
At 31 March 2022 - 237,649 237,649
========= ======== =========
Net book value
At 31 March 2022 4,023,484 126,927 4,150,411
========= ======== =========
At 31 March 2021 4,023,484 163,384 4,186,868
========= ======== =========
For impairment testing purposes, management considers the
operations of the Group to represent a single cash generating unit
(CGU) focused on pharmaceutical development, targeting unmet
medical needs in fibrosis and oncology via drug repurposing. The
directors have assessed the recoverable amount of goodwill, which
in accordance with IAS36 is the higher of its value in use and its
fair value less cost to sell (fair value), in determining whether
there is evidence of impairment.
As at 31 March 2022, the Group assessed the recoverable amount
of the CGU with reference to a value-in-use calculation based on
cash flow projection of the subsidiary. The calculations uses cash
flow projection based on financial budgets approved by the
Directors covering a 30-year period with discount rate of 15%
assumed. The recoverable amount of the CGU based on the
value-in-use calculation exceeded its carrying amount. The
Directors also assessed the market capitalisation of the Group with
reference to the share price of the Company and supported the view
that goodwill is not impaired.
14. Trade and other receivables
31 March 31 March
2022 2021
GBP GBP
================================== ======== ========
Prepayments 27,941 14,742
Other receivables 171,659 17,518
======== ========
199,600 32,260
======== ========
The fair value of trade and other receivables is considered by
the Directors not to be materially different to the carrying
amounts.
15. Cash and cash equivalents
31 March 31 March
2022 2021
GBP GBP
============================== ======== =========
Cash at bank 464,095 1,669,780
The Directors consider that the carrying value of cash and cash
equivalents represents their fair value.
16. Share capital
Allotted, called up and
fully paid shares
31 March 31 March
2022 2021
=========== ======= =========== =======
No. GBP No. GBP
============================ =========== ======= =========== =======
Ordinary shares of GBP0.001
each 615,609,368 615,609 591,609,368 591,609
No.
================================================== =========== =======
As at 1 April 2021 591,609,366
Placement of new shares on the stock market 24,000,000
===========
As at 31 March 2022 615,609,368
===========
On 17 December 2021, the company completed a capital increase
through the issue of 24,000,000 shares of GBP0.001 each in a share
placement at a price of GBP0.015 per share, with a share premium of
GBP115,982.
17. Share options and warrants
The Group operates share-based payment arrangements to
remunerate Directors and key employees in the form of a share
option scheme. Equity-settled share-based payments are measured at
fair value (excluding the effect of non-market based vesting
conditions) at the date of grant. The fair value is determined at
the grant date of the equity-settled share-based payments and is
expensed on a straight-line basis over the vesting period, based on
the Group's estimate of shares that will eventually vest and
adjusted for the effect of non- market based vesting
conditions.
The following share-based payments were made in the year to 31
March 2022:
On 31 January 2022, the directors, A. Riddell. J. Gilbert and M.
Kennedy were granted warrants to subscribe for 3,000,000 new
Ordinary shares of GBP0.001 at an exercise price of 1.45p each. The
warrants are exercisable up until 31 January 2023. The fair value
of the warrants was determined using the Black-Scholes option
pricing model at 1.45p per warrant.
The fair value of the options and warrants issued in 2022 were
determined using the Black-Scholes option pricing model, where
appropriate, and had a weighted average of 2.46p per option (2021:
2.46p).
The signi cant inputs into the model in respect of the options
and warrants granted in the years ended 31 March 2021 and 31 March
2022 were as follows:
2022 2021
Existing director warrants Existing
director
warrants
======================= =========================== =========
Grant date share price 1.45-4.15p 2.5-4.15p
Exercise price 1.45-2.80p 2.8p
No. of share options 13,746,943 1,160,713
Risk free rate 0.153-0.44% 0.44%
Expected volatility 50-97% 95%
Expected option life 1-5 years 5 years
The following table sets out details of the granted warrants and
options movements:
Warrant/ option Number Issued Lapsed Number Issued Lapsed Number Exercise Expiry
holder of in year in year of in year in year of price date
warrants/ warrants warrants/
options / options options
at 1 April at 31 at 31
2020 March March
2021 2022
------------------ ----------- ---------- ------------ ----------- ---------- ------------ ----------- --------- -----------
Directors during
year
J Holland 36,860,000 - - 36,860,000 - - 36,860,000 4-10p 16/10/2022
K Keegan 3,000,000 - - 3,000,000 - (3,000,000) - 6.75p 10/05/2021
J Gilbert - - - - 3,000,000 - 3,000,000 1.45p 31/01/2023
M Kennedy - - - - 3,000,000 - 3,000,000 1.45p 31/01/2023
A Riddell - - - - 3,000,000 - 3,000,000 1.45p 31/01/2023
------------------ ----------- ---------- ------------ ----------- ---------- ------------ ----------- --------- -----------
Previous
directors
Pascal Hughes 1,625,000 - (1,625,000) 0 - - - 4p 16/10/2020
D Gooding 36,860,000 - - 36,860,000 - - 36,860,000 4-10p 16/10/2022
C Blackwell 3,000,000 - - 3,000,000 - (3,000,000) - 4p 10/05/2021
------------------ ----------- ---------- ------------ ----------- ---------- ------------ ----------- --------- -----------
Other
warrants/options
Novum Securities
Limited - 580,357 - 580,357 - - 580,357 2.8p 21/10/2025
Other warrants 580,356 - 580,356 - - 580,356 2.8p 21/10/2025
Alex Eberlin - 586,229 - 586,229 - - 586,229 4.691p 18/12/2023
------------------ ----------- ---------- ------------ ----------- ---------- ------------ ----------- --------- -----------
81,345,000 1,746,942 (1,625,000) 81,466,942 9,000,000 (6,000,000) 84,466,942
18. Pension and other schemes
De ned contribution pension sheme
The Group operates a de ned contribution pension scheme. The
pension cost charge for the year represents contributions payable
by the Group to the scheme and amounted to GBP1,721 (2021:
GBP3,870).
Contributions totaling GBPNil (2021: GBP292) were payable to the
scheme at the end of the year and are included in creditors.
19. Trade and other payables
31 March 31 March
2022 2021
GBP
============================================== ======== ========
Trade payables 12,351 98,955
Accrued expenses 218,202 197,436
Social security and other taxes 7,308 2,941
Outstanding de ned contribution pension costs - 292
Other payables - -
-------- --------
237,861 299,624
-------- --------
The fair value of trade and other payables is considered by the
Directors not to be materially different to the carrying amounts.
All payables are due within one year.
20. Financial instruments
Credit risk
The main credit risk relates to liquid funds held at banks. The
credit risk in respect of these bank balances is limited because
the counterparties are banks with high credit ratings assigned by
international credit rating agencies.
Liquidity risk
The Group seeks to manage nancial risk, to ensure suf cient
liquidity is available to meet foreseeable needs. An analysis of
trade and other payables is given in note 19.
Capital risk management
The Group's objectives when managing capital are:
-- to safeguard the Group's ability to continue as a going
concern, so that it continues to provide returns and bene ts for
shareholders;
-- to support the Group's growth; and
-- to provide capital for the purpose of strengthening the Group's risk management capability.
The Group actively and regularly reviews and manages its capital
structure to ensure an optimal capital structure and equity holder
returns, taking into consideration the future capital requirements
of the Group and capital ef ciency, prevailing and projected pro
tability, projected operating cash ows, projected capital
expenditures and projected strategic investment opportunities.
Management regards total equity as capital and reserves, for
capital management purposes.
21. Related party transactions
All transactions with related parties are conducted on an arm's
length basis.
The remuneration of the key management personnel of the Group,
who are de ned as the directors, is set out in the directors'
remuneration report.
Ultimate controlling party
The Directors do not consider there to be a single ultimate
controlling party.
22. Post Balance Sheet Events
In December 2021 the Company entered into a Sharing Agreement
with Lanstead Capital Partners LP ("Lanstead"), split into two
tranches of new shares issued with payments to be received over a
20-month period from March 2022 to October 2023. Tranche 1 covers
the period March 2022 to June 2022 and Tranche 2 runs from July
2022 to October 2023
The agreement is structured in such a way that the proceeds
received by the Company are linked to the market price for the
Company's shares. The proceeds are calculated based on the
volume-weighted average share price in the month preceding the
payment from Lanstead, compared to a target price of 2p per share.
The total proceeds based on the 2p share price are GBP1,650,000,
with Tranche 1 representing GBP330,000 of this amount.
At the time of signing the accounts the Company has received the
full proceeds from Tranche 1 at a value of GBP139,982 net. This is
considered to be an adjusting post balance sheet event and
therefore the share issue in the year to March 2022 has been
adjusted to reflect the known proceeds.
Tranche 2 of the share issue completed in April 2022 and the
proceeds are yet to be determined as they relate to the future
share price. As stated above this will vary in accordance with the
share's performance against the target price of 2p. The issue of
shares post year end is considered to be a post balance sheet
event.
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END
FR EAEXXAEEAEAA
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July 28, 2022 02:00 ET (06:00 GMT)
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