TIDMPYC
RNS Number : 9049N
Physiomics PLC
28 September 2023
28 September 2023
Physiomics plc
("Physiomics" or "the Company")
Final Results for the year ended 30 June 2023
Physiomics plc (AIM: PYC), the oncology consultancy using
mathematical models to support the development of cancer treatment
regimens and personalised medicine solutions, is pleased to
announce its audited results for its financial year ended 30 June
2023.
Highlights
Financial Highlights
-- Total income (revenue and grant income) decreased 33% to GBP605,734 (2022: GBP900,707)
-- The operating loss increased 60% to GBP573,733 (2022: GBP359,114)
-- The loss after taxation increased 89% to GBP477,257 (2022: GBP253,138)
-- At 30 June 2023, the surplus of shareholders' funds was
GBP531,720 (30 June 2022: GBP974,807)
-- Cash and cash equivalents at 30 June 2023 of GBP416,592 (30 June 2022: GBP687,674)
-- Order pipeline of potential projects that could start in the
current financial year ending 30 June 2024 of over GBP1m.
Operational highlights
-- Completion of a fundraise to raise gross proceeds GBP380,477
to fund further expansion and diversification of the Company's
client base, expansion of its consulting business into the adjacent
area of pharmaceutical biostatistics services and exploration of
opportunities around its personalised oncology software
offering
-- Successful completion of the NIHR-sponsored PARTNER study at
Portsmouth Hospitals University NHS Trust
-- Announcement of collaboration with Beyond Blood Diagnostics
for personalised cancer treatment
-- Announcement of collaboration with wholly owned ValiRx subsidiary Inaphaea Biolabs Ltd
-- Podium presentation at American Association for Cancer
Research (AACR) on project with client Merck KGaA
-- First contract directly with Cancer Research UK (relating to
the clinical development of Aleta Biotherapeutics ALETA-001)
-- Follow on contracts with existing clients Merck KGaA, Numab
Therapeutics, Ankyra Therapeutics and Bicycle Therapeutics
-- Appointment of a second highly experienced independent
Non-Executive Director, Shalabh Kumar
Post period end
-- Received GBP339k in net proceeds from the fundraise
-- Closed four deals with three existing and one new customer
-- Announced the recruitment of an experienced Chief Operating Officer, Dr Peter Sargent
Enquiries:
Physiomics plc
Dr Jim Millen, CEO
+44 (0)1865 784 980
Hybridan LLP (Broker)
Claire Louise Noyce
+44 (0) 203 764 2341
Strand Hanson Ltd (NOMAD)
James Dance & James Bellman
+44 (0)20 7409 3494
Notes to Editor
About Physiomics
Physiomics plc (AIM: PYC) is an oncology consultancy using
mathematical models to support the development of cancer treatment
regimens and personalised medicine solutions. The Company's Virtual
Tumour(TM) technology uses computer modelling to predict the
effects of cancer drugs and treatments to improve the success rate
of drug discovery and development projects while reducing time and
cost. The predictive capability of Physiomics' technologies have
been confirmed by over 100 projects, involving over 50 targets and
75 drugs, and has worked with clients such as Merck KGaA, Astellas,
Merck & Co and Bicycle Therapeutics.
Executive Chairman and Chief Executive Officer's Statement
Overview
In what was a difficult year for the Company, its total income
was significantly impacted by cost reduction measures carried out
by a major client, however these were partially mitigated by
Company initiatives (taken over several years and still ongoing) to
diversify its client base, with the proportion of revenues derived
from its largest customer falling from 85% in FY19 to less than 35%
in FY23. As a result of this diversification drive, the Company
took on a significant volume of repeat business (from clients that
have been with us for up to five years) as well as attracting new
clients including Aleta Biotherapeutics (through CRUK), Arjuna
Therapeutics and the University of Sheffield. For the first time
ever, the Company has felt in a position to quantify the value of
its pipeline of potential new contracts that could start in the
current financial year which remains at over GBP1m despite four
opportunities having been converted into signed projects during
August. This was facilitated through the implementation of a formal
CRM process to manage and track opportunities.
The Company completed its personalised dosing PARTNER trial in
Portsmouth and is actively exploring possible augmentation of the
tool to incorporate the effect of the use of the biological product
G-CSF, in preventing neutropenia, with a view to developing a risk
scoring algorithm for use by clinicians treating patients with this
drug. To complement its in-house activities in this area the
Company was further pleased to announce an important collaboration
with Beyond Blood Diagnostics.
Finally, the Company completed a fundraise to fuel continued
diversification of its client base, exploration of further
personalised dosing initiatives and expansion of its consulting
activities into the field of biostatistics.
Financial Review
The Company's total income for the year ended 30 June 2023 of
GBP605,734 represents a 33% decrease from the year ended 30 June
2022, due primarily to reduction in spend by the Company's largest
client but partially mitigated by increased revenues from a
diversified client base.
Largely as a result of lower revenues, the loss after taxation
increased 89% to GBP477,257 (2022: GBP253,138).
At 30 June 2023, the surplus of shareholders' funds was
GBP531,720 (30 June 2022: GBP974,807) of which cash and cash
equivalents were GBP416,592 (30 June 2022: GBP687,674). However,
this was just prior to receipt of funds from a fundraise completed
on 3rd July 2023 whose gross proceeds were GBP380,477.
Staff
The Company continued to build its technical team with the
addition of two highly qualified new scientists, chosen from among
a strong field of applicants. The Company continues to attract
significant interest from those who want to be involved at the
cutting edge of cancer care and data modelling.
Staff utilisation rates are regularly reviewed as part of the
Company's workforce planning process and the Company would like to
thank all its staff for their continuing hard work and commitment
during the year.
Outlook
The impact of the Company's strengthened Board is already being
felt through the implementation of new marketing activities,
collaborations such as with Inaphaea and Beyond Blood and through
the proposed expansion of its consulting business into the field of
biostatistics. The Company is looking forward to a successful
financial year 2024 during which it aims to achieve a new best ever
level of total income, generated from its current core business and
emerging biostatistics consulting offering.
Strategic Report
Principal activities
Physiomics is engaged in providing consulting services to
pharmaceutical companies in the areas of outsourced quantitative
pharmacology and computational biology, using a combination of
industry standard technologies and its own proprietary technology
platform, Virtual Tumour(TM). In simple terms, this means helping
companies to put the right drugs together, at the right dose, in
the right types of cancer to help achieve the best possible results
at the lowest cost.
Modelling and simulation using Virtual Tumour(TM) and other
tools
The Company's focus is almost exclusively on the provision of
modelling, simulation and data analysis services, covering the full
range of oncology R&D and with a focus on quantitative
pharmacology techniques. The Company generates fee for service
revenues by providing insights to clients based on its modelling.
The Company utilises its proprietary Virtual Tumour(TM) predictive
software, industry standard tools (such as NONMEM and MATLAB), as
well as developing bespoke models using the R programming language.
Extensions to Virtual Tumour(TM) have been developed over the last
few years to address specialist areas such as immuno-oncology, DNA
damage repair inhibitors, radiation therapy and other areas of
specialism. Projects often require a blend of several approaches to
deliver the optimal insights to clients. Client companies rely
heavily on the knowledge and experience of our team when evaluating
data and devising new programmes. The team's exposure to and
expanding expertise in a wide range of cancer treatment modalities
is attractive to new and existing clients.
The Company's expertise in the late discovery, preclinical and
clinical phases of pharmaceutical R&D, enables it to add value
by helping companies to efficiently derive insights from their
data. This is achieved in a variety of ways ranging from data
analysis, visualisation and interpretation, to mathematical
modelling of the performance of drugs. The end result is that our
clients are in a better position to optimise the treatments they
are developing by selecting the right targets, drugs, dosages,
timing and combinations. We believe that we add particular value in
early development during the transition from pre-clinical to
first-in-human studies. We believe our experience and capabilities
have been helpful in supporting clients in identifying optimal
clinical trial designs and justifying them to regulatory
authorities. In recent projects, the Company has been able to:
-- Work with one biotech company to support the selection of its
first human dose for its lead product
-- Work with another biotech company to model the PK of its
drug, confirming its potential advantages vs a competitor and
contributing to its eventual acquisition
-- Support a big pharma company in optimising the balance of
efficacy and toxicity for complex combination cancer regimens
-- Support another big pharma in exploring the mechanism of
action of a new immune-oncology drug targeting NK cells and
creating a model to predict its efficacy in preclinical and
clinical settings
Personalised Medicine
In addition to its core modelling and simulation business, the
Company has continued to develop its technology for use in the
field of personalised medicine. The term "personalised medicine" is
used in many ways but is most often associated with the use of
genetic markers in the selection of drugs to treat a particular
group of patients. Physiomics' approach has been to use its
expertise in interpreting pre-clinical and clinical cancer data to
help predict when to treat patients and with what dose of drug.
This approach relies on advanced analytical techniques, many of
which (such as machine learning and neural networks) are in the
field of artificial intelligence (AI). To date this work has been
funded by two Innovate UK Grants and one NIHR grant and has not
drawn materially on shareholder funds. The Company completed its
observational "PARTNER" study at Portsmouth University Hospitals
NHS Trust which validated the ability of the tool to predict levels
of neutropenia. Although this was felt to be of interest by
clinicians, it was determined that the tools use to guide the use
of the expensive biological drug GCSF (used to counteract
neutropenia) might have a higher commercial value and the Company
is currently actively exploring ways to further develop its tool to
facilitate this.
During the year, the Company's US partner DoseMeRx announced
that it had been divested by its owner Tabula Rasa Healthcare
(TRHC) and acquired by a private equity company. Since then, the
Company has re-established contact with DoseMeRx and discussions
are ongoing around how the Company's tool might be used in the
US.
In addition to this partnership, the Company also entered into a
collaboration with UK based start-up Beyond Blood Diagnostics which
is developing a miniature device to measure blood counts including
white cell levels which are required to calibrate our tool for
individual patients. Feedback from clinicians suggests that
enabling patients to undergo these diagnostic tests in a primary
care or home setting would facilitate use of our tool and as such
we are actively exploring opportunities to work with Beyond
Blood.
Business Model
The Company's main commercial business is the provision of
consulting services which rely substantially on our Virtual
Tumour(TM) pre-clinical and clinical models that are proprietary to
the Company. Physiomics works primarily on a fee for service basis,
although we are open to and continue to explore other approaches
including risk sharing and collaboration. An example of this
includes the risk-sharing deal with ValiRx plc announced in
February 2021 for which terms have been fully disclosed and which
would be triggered by the receipt by ValiRx of licensing revenues
related to VAL-201.
Although the Company continues to be open to alternative
approaches, it is envisaged that fee-for-service consulting will
continue to be the main driver of revenues in the short to medium
term .
Key strengths
The consulting business is the core of the Company's commercial
activity and we believe that it is unique in a number of
respects:
-- We focus almost exclusively on oncology . Our team has over
140 years of combined experience in the development of cancer drugs
and computational biology, and in particular of quantitative
pharmacology (essentially analysing how much drug to use and trying
to predict what effect it will have). Over the Company's lifetime
it has completed over 100 projects covering hundreds of targets,
cell lines, drugs, and cancer types;
-- We use a proprietary in-house platform called Virtual
Tumour(TM) . Although the team can take advantage of all commonly
used modelling, simulation and data analysis techniques in the
cancer field, we also have access to an internally developed
platform that is uniquely useful when considering combinations of
cancer drugs (and most anti-cancer regimes eventually involve using
multiple agents simultaneously);
-- We have particular expertise in the sourcing, curating and
analysis of healthcare data. Whether originating from clients or
within the public domain, our team comprises experts in data
analysis, coding and machine learning (AI) techniques that underpin
the modelling activities we carry out on behalf of our clients;
and
-- We provide a responsive and dedicated service . Many large
companies offer services in the cancer space though do not restrict
themselves to cancer nor to quantitative pharmacology. As a result,
we believe, many of these companies cannot offer the same level of
bespoke, responsive service that Physiomics can and does.
Our strategy
Physiomics' strategy is to grow its consulting business while
actively investigating other possible applications of our core
modelling and simulation capabilities such as in personalised
medicine. Our main strategic aims are as follows:
-- Continue to expand and diversify our core consulting business
both through repeat business and through the acquisition of new
clients;
-- Supplement our core consulting revenues through grant funded
projects, especially in the field of personalised medicine (CRUK,
Innovate UK, NIHR etc);
-- Expand our core consulting business into related fields,
starting with biostatistics. This will be the subject of further
announcements later this calendar year;
-- Develop new, complementary areas of business such as
personalised medicine and other service offerings in drug discovery
and development that can add long term value to the business.
Obligations under s172 of the Companies Act
The Directors are mindful of their obligations under s172(1) of
the Companies Act 2006 to act in good faith to promote the success
of the Company for the benefit of its members as a whole, and in
doing so have regard (amongst other matters) to the following:
Principle Company's actions
The likely consequences of any The Company has a long term vision
decision in the long term. as set out in this report.
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The interests of the company's The Company values its employees
employees. and implements training, offers
development opportunities and has
in place appropriate incentive
programs to support their retention.
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The need to foster the company's The Company spends significant
business relationships with suppliers, effort in reaching out to new and
customers and others. existing customers and in soliciting
their feedback following engagements.
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The impact of the company's operations The Company's operations have minimal
on the community and the environment. impact on the community and environment.
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The desirability of the company The Company maintains a high standard
maintaining a reputation for high of business ethics, complying with
standards of business conduct. the QCA code for corporate governance.
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The need to act fairly as between The Company treats all members
members of the company. equitably and attempts to ensure
a timely and accurate flow of information
to all members.
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Review of Business
The Company is principally engaged in providing consulting
services to pharmaceutical companies in the areas of outsourced
quantitative pharmacology and computational biology.
-- Total income (revenue and grant income) decreased 33% to GBP605,734 (2022: GBP900,707)
-- The operating loss increased 60% to GBP573,733 (2022: GBP359,114)
-- The loss after taxation increased 89% to GBP477,257 (2022: GBP253,138)
-- At 30 June 2023, the surplus of shareholders' funds was GBP531,720 (30 June 2022: GBP974,807)
-- Cash and cash equivalents at 30 June 2023 of GBP416,592 (30 June 2022: GBP687,674)
Consulting Business
Physiomics' consulting business is at the heart of its offering
to clients. The Company uses its proprietary Virtual Tumour(TM)
software platform but also develops mathematical models from
scratch and leverages models in the public domain. It is a
combination of our technology and the oncology experience of our
team that enables us to be able to deliver clients both a targeted
product offering that meets their needs whilst at the same time
delivering value for money. We believe that we are unique in
offering a combination of:
-- Deep experience and knowledge of oncology;
-- An exclusive focus on model-based approaches to supporting our clients' R&D projects; and
-- A level of flexibility and responsiveness that is not
typically found in larger organisations.
We have continued to develop our brand through a variety of
marketing and business development activities including:
-- Engagement of an external marketing lead to support
development and (working with our Head of BD) execution of a
marketing strategy
-- Continued use of social media to engage with current and potential new clients;
-- Attendance at key conferences such as this year at AACR where
our poster (in collaboration with Merck KGaA) was upgraded to a
podium presentation; and
-- Further development of our website to include case studies based on actual client projects.
The Company has been particularly successful in attracting
repeat business this year from clients such as Numab Therapeutics
and Bicycle Therapeutics which have helped to offset a reduction in
revenues from long-standing client Merck KGaA (although at the time
of writing Merck has just signed its first new project with us
since 2022).
The Company's clients in this financial year have been located
in the USA, UK, EU and Switzerland. In terms of the mix of work, we
continue to work across the full spectrum of R&D from discovery
to development, though we continue to focus increasingly on
translational projects involving assets entering clinical
development for the first time. This is particularly exciting, as
it raises our profile and can involve exposure to regulatory
authorities. The Company continues to work in the immuno-oncology
space with several of its clients, and it is anticipated that the
industry focus on this treatment approach is likely to continue for
some time.
Personalised Medicine
The personalised medicine and digital health space continues to
generate significant interest from both investors and healthcare
systems. Many start-ups in this area focus on the use of genetic
markers or the pattern-recognition capabilities of artificial
intelligence applications. However, we believe that there is a
significant opportunity in the analysis of existing clinical data
to identify better ways to treat patient using existing drugs and
procedures.
The Company has developed a tool for personalised dosing, funded
mainly by two Innovate UK and one NIHR grant as noted above.
Strategic and financial performance indicators
The Company is focused on the creation of long-term value for
its shareholders.
The Directors consider that the key performance indicators are
those that communicate the financial performance and strength of
the Company as a whole, these being revenue, profitability, and
shareholders' funds. As well as looking at annual performance, the
Board consider 3 year rolling figures that smooth variation in
individual years.
Total revenues during the last five financial years (year ended
June 2019 to year ended June 2023) exceed the total revenues of the
seventeen years prior to that.
Considering performance trends across periods, total income for
the past 3 financial years (year ended June 2021 to year ended June
2023) has averaged GBP746k annually, compared with GBP713k for the
3 years before that (year ended June 2018 to year ended June 2020).
The delayed client projects in FY23 have reduced the 3 year average
upward trend however it remains upward.
Similarly, loss after tax for the past 3 financial years (year
ended June 2021 to year ended June 2023) has averaged GBP320k,
compared with an average of GBP117k for the 3 years before that
(year ended June 2018 to year ended June 2020). These increases
result mainly from increased investment in technical and business
staff intended to drive the Company's key strategic initiatives and
increase revenues over time.
The Board anticipate improvements in both these annual 3 year
average trends
Year-end net assets at 30 June 2023 of GBP532k have fallen from
their year-end peak at June 2020 of GBP1,315k but remain higher
than all year ends prior to and including year end June 2017 .
Principal Risks
The Company faces a number of risks and maintains a risk
register that identifies specific risks, their potential impact,
their likelihood and mitigating actions. This register is updated
as required and on an annual basis as a minimum. Selected key risks
are addressed below.
Risk Description Mitigation
Loss of The business has a high Over the course of the financial
major customer dependence on a single large year ended 30 June 2023 Merck
customer (Merck KGaA). This did in fact take cost containment
leads to the risk that the measures affecting its US operations
customer could significantly which led to a significant reduction
reduce or cancel its contracts in Company revenues as noted
with the Company. in several Company press releases.
Fortunately the Company had already
taken steps to broaden its customer
base (and continued to do so)
such that the adverse effect
of the reduction in Merck revenue
was partially mitigated.
The Company continues to foster
a close relationship with its
main big pharma client Merck
KGaA and post the year end has
signed a further agreement with
this client.
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Competition Physiomics operates in a Our focus on oncology and the
competitive environment way in which we employ Virtual
which could lead to pricing Tumour(TM) requires a combination
pressure. Whilst the business of technology and specialised
uses its own proprietary skills, which we believe is hard
technology a competitor to replicate.
could attempt to replicate We continually develop our model
its Virtual Tumour(TM) technology. to improve the scope and applicability
of the technology, adding further
value to our clients and differentiating
our service from our competitors.
In addition, in the last three
years we have developed a personalised
medicine offering that we are
currently seeking to commercialise
and which would help reduce dependency
on our consulting business.
We are in parallel seeking other
ways in which to broaden the
base of activities of the Company
and in particular recently announced
a proposed expansion of its consulting
business into the field of biostatistics.
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Personnel The success and future growth The Company seeks to recruit,
& skills of the Company is in part develop, and manage talent on
dependent on the continued a continuous basis and has built
performance and delivery a network of contracted specialists
of certain Directors, managers, who can provide additional resource
key staff and contractors. when required.
The Company operates in In order to attract the best
a highly specialised field talent, the Company offers competitive
where there is strong competition packages to its staff which includes
for required skills and a share option scheme, private
talent. medical insurance and flexible
Key personnel leaving the working. A collegiate working
Company could lead to a environment and opportunities
short-term reduced capacity for personal and professional
to service client projects. development also help to maintain
staff satisfaction.
Over the course of this financial
year, the Company took on two
new technical team members from
a field of highly qualified applicants.
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Financial The financial risks faced The board addresses financial
by the Company include the uncertainties by monitoring actual
ability to cover working performance against internal
capital needs, raise sufficient projections and responding to
funds to support the Company significant variances. The Company
through to profitability also employs tight cost controls
and failure to secure further across the business and has from
contracts. time to time raised funds from
The process of winning major investors.
contracts is typically protracted The Company seeks to ensure cash
and the Company operates availability for working capital
in a competitive environment. purposes and to reduce credit
This means the Company often risk arising from cash and short-term
faces significant uncertainties deposits with banks and other
in its cash flow. financial institutions by holding
deposits with an institution
with a medium grade credit rating
or better.
In July 2023 the Company completed
a fundraise of GBP380k gross
to support expansion including
into the related biostatistics
field and for the purposes of
working capital.
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Regulation The Company's customers The Company regularly reviews
Changes are predominately pharmaceutical regulations changes through proactive
companies who require outsourced discussions with key industry
quantitative pharmacology officials, professional advisors
and computational biology and regulatory bodies where appropriate.
services. There is a risk Major agencies such as the FDA
that the business model are actively promoting the use
is impacted by future changes of modelling and simulation and
in regulations in the medical issue advisory papers which set
and pharmaceutical industry. out their thinking.
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Systems The Company is dependent Continuity of access to data
& infrastructure on its IT technical infrastructure and integrity of data is maintained
and systems for the management through the implementation of
of its core operations and a system of data storage, offsite
research and development backup and monitoring of key
programmes. coding and modelling data. The
company maintains CyberEssentials
accreditation of its systems
hardware and processes in order
to increase resilience vs cyber
related attacks and risks.
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Prevailing The biotech market has seen Several projects that were anticipated
economic a significant reduction to be signed in the financial
conditions in funding from both public year 2023 were cancelled or delayed.
and private sources since It is not possible to say for
the beginning of 2022. Publicly sure what combination of factors
listed biotech companies led to this however the Company
share prices have come under continues to invest in marketing
some pressure as a result activities to attract new customers
and our clients' ability and has been successful in generating
to raise capital may be repeat business. In addition,
impacted by this as well as noted above, the Company announced
as adverse sentiment related its intention to expand its consulting
to energy prices and the business into the related field
war in Ukraine. of biostatistics consulting which
further broadens the base of
activity and mitigates the risks
of being too narrowly focused.
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Directors' Report
The Directors submit their report and the audited financial
statements of Physiomics Plc for the year ended 30 June 2023.
Results
There was a loss for the year after taxation amounting to
GBP477,257 (2022 loss after tax: GBP253,138). In view of
accumulated losses, and given the stage of the Company's
development, the Directors are unable to recommend the payment of a
dividend.
Directors
The directors who served during the year were:
Dr James Millen
Dr C D Chassagnole
Dr T H Corn
Mr S Kumar (from 1 September 2022)
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. Under that law the Directors
have elected to prepare the financial statements in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the United Kingdom (UK). 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 the financial performance and cash flows of the Company
for that year.
The financial statements are required by law, and IFRS as
adopted by the UK, to give a true and fair view of the state of
affairs of the Company.
In preparing the Company financial statements, the Directors are
required to:
a. select suitable accounting policies and then apply them
consistently;
b. make judgements and estimates that are reasonable and
prudent;
c. state whether in preparation of the financial statements the
Company has complied with IFRS as adopted by the UK, subject to any
material departures disclosed and explained in the financial
statements; and
d. 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 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.
The Directors are also responsible for the maintenance and
integrity of the Physiomics Plc website. Legislation in the United
Kingdom governing the preparation and dissemination of the
financial statements may differ from legislation in other
jurisdictions.
Substantial shareholdings
The Company has been informed, based on a beneficial ownership
search carried out by its registrar, that as at 14 August 2023, the
following individual shareholders had over 3% interests in the
issued ordinary shares of the Company.
Shares (m) Holding
%
Mr Gary Marshall 4,500,000 3.32%
On 14 August 2023, Dr Jim Millen held 1,884,393 ordinary shares
and Dr Christophe Chassagnole held 1,102,723 ordinary shares. The
holding percentages were 1.39% and 0.81% respectively.
Directors' remuneration
Details of Directors' remuneration in the year ended 30 June
2023 is set out below:
Pension Total Total
Emoluments Bonus Benefits Contributions 2023 2022
GBP GBP GBP GBP GBP GBP
Dr J S Millen 125,970 - 2,028 10,608 138,606 138,442
Dr C D Chassagnole 75,555 - 1,655 10,267 87,477 80,681
Mr S Kumar 23,667 - - - 23,667 -
Dr T H Corn 20,000 - - - 20,000 5,000
Dr P B Harper - - - - - 34,595
Total 245,192 - 3,683 20,875 269,750 258,718
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Corporate governance
Physiomics Plc has chosen to comply with the Quoted Companies
Alliance ("QCA") Corporate Governance Code. High standards of
corporate governance are a priority for the board, and details of
how Physiomics addresses key governance principles defined in the
QCA code are set out below.
1. Establish a strategy and business model which promote
long-term value for shareholders
The Company's business model is focused on helping big pharma
and biotech clients to reduce costs and optimise outcomes of their
oncology R&D though modelling and analysis of client and other
data. In particular, the Company leverages its own in-house
technology, Virtual Tumour(TM), which is specifically focused on
predicting the effects of combination drug treatments. The Company
operates mainly on a fee for service basis but is also open to
other arrangements such as risk-based milestones and licensing
although these have not formed a material part of the Company's
revenues historically. In addition to its commercial business the
Company engages in grant driven projects which do not generate
profit but which provide valuable "paid for" R&D which can then
be leveraged through the Company's commercial activities. The
Company aims to deliver shareholder value by increasing the number
and value of its commercial clients and by increasing the amount
and value of grant projects and by investigating the commercial
potential of new areas such as personalised medicine. The Company
believes that its strategy will be effective in helping it to meet
challenges such as competitive pressure and the rapid pace of
technological change in the pharmaceutical industry.
2. Seek to understand and meet shareholder expectations
The Company maintains a dedicated email address which investors
can use to contact the Company which is prominently displayed on
its website together with the Company's address and phone number.
The Company holds an annual general meeting ("AGM") to which all
members are invited and during the AGM, time is set aside
specifically to allow questions from attending members to any board
member. As the Company is too small to have a dedicated investor
relations department, the CEO is responsible for reviewing all
communications received from members and determining the most
appropriate response. In addition to these passive measures, the
CEO typically engages with members through a roadshow once or twice
each year and the Company subscribes to the InvestorMeetCompany
online investor relations platform.
3. Take into account wider stakeholder and social
responsibilities and their implications for long-term success
In addition to members, the Company believes its main
stakeholder groups are its employees and clients. The Company
dedicates significant time to understanding and acting on the needs
and requirements of each of these groups via meetings dedicated to
obtaining feedback (see principle 2 above).
In addition, the Company has a close relationship with the
University of Oxford and the Oxford University Hospitals NHS
Foundation Trust. Prof Mark Middleton, who leads oncology research
at these institutions is an advisor to the Company and has been a
collaborator on several grant projects. The relationship with the
Company is mutually beneficial as the University and NHS Trust also
has a mandate to encourage and collaborate with local
businesses.
With regards corporate social responsibility, there is little
direct impact of the Company's day-to-day activities however the
Company is proud that its overarching goal is to support the
treatment of cancer, a disease that has a profound impact on
society.
4. Embed effective risk management, considering both
opportunities and threats, throughout the organisation
The Company maintains a register of risks across several
categories including personnel, clients, competition, finance,
technical and legal. For each risk we estimate the impact,
likelihood as well as identify mitigating strategies. This register
is reviewed periodically as the Company's situation changes and as
a minimum annually. During such reviews, each risk category is
considered by the Directors with a view to understanding (i)
whether the nature, impact or likelihood of any risks has changed,
(ii) whether the mitigating actions taken by the Company should
change as a result and (iii) whether any new risks or categories of
risk have arisen since the last review. The Company's risk register
is reviewed by its auditor as part of its annual audit process,
providing a degree of external assurance as to the suitability of
its risk management strategy.
5. Maintain the board as a well-functioning, balanced team led
by the Chairman
The board of Physiomics Plc currently comprises two Executive
Directors, two independent Non-Executive Directors and a secretary
(non-director). The board meets at least monthly for one day
(except August) and all current board members have attended all
board meetings in the current financial year (since their
appointment). Each Director is re-elected to the board on a
rotating basis by a vote of members at the Company's AGM.
Executive Directors are employees of the Company. Non-Executive
Directors' contracts require that directors dedicate a minimum of
one day per month. In addition, non-executive directors may provide
additional paid consulting services at rates specified in their
contracts.
The Company notes that, following the departure of the former
Chairman, Dr Paul Harper, in February 2022, Dr Jim Millen has
fulfilled the roles of both Executive Chairman and CEO. Since then,
however, the Company has taken on two new independent Non-Executive
Directors, providing a more balanced ratio of executive and
non-executives on its board. The Company's board composition, and
in particular the role of Chairman, will continue to be reviewed by
the new expanded board over the course of the current financial
year, and the Board is cognisant of the guidance in the QCA Code
regarding separation of the roles of Chairman and Chief Executive
Officer.
6. Ensure that between them the directors have the necessary
up-to-date experience, skills and capabilities
The current directors of the Company, together with their
experience, skills, and personal qualities relevant to the
Company's business are outlined below:
-- Dr Jim Millen (Executive Chairman & CEO) joined
Physiomics in April 2016, bringing over 15 years' experience in
pharmaceuticals and biotechnology gained at a number of blue-chip
global companies as well as smaller UK-based organisations. At
Allergan, Jim was responsible for corporate development in its
Europe, Africa and Middle East region where he was pivotal in
expanding the Company's geographical footprint before moving to a
senior role responsible for commercial strategy and market access.
Prior to that, at GSK, Jim held business development roles of
increasing responsibility including within the Company's innovative
Centre of Excellence for External Drug Discovery. Jim has also
supported a number of smaller companies in fund raising and
strategic partnering activities. Over the course of his career he
has completed an array of deals worth many hundreds of millions of
dollars, spanning licencing, acquisition, divestment, development
and commercialisation. Jim studied medicine at Queens' College,
Cambridge University and qualified as a doctor from the London
Medical School. He holds an MBA from INSEAD. Jim's ability to
develop and grow businesses and drive towards ambitious goals is of
great value in his role as CEO.
-- Dr Christophe Chassagnole (COO) has been involved in systems
biology and bio-computing projects since the mid-nineties, with
experience in both academic and industrial environments. His
Doctorate was achieved at the Victor Segalen-Bordeaux II
University, and then he held a post doctorate position with IBVT at
Stuttgart University. Before Joining Physiomics Dr Chassagnole
worked in France as a senior researcher for CRITT Bio-Industries
(Toulouse) for 3 years. He joined Physiomics in May 2004 as project
leader to develop the technology portfolio of the Company. He was
appointed Chief Operating Officer of Physiomics in May 2007, in
this capacity he has initiated and supervised the development of
the Virtual Tumour(TM) technology. Christophe remains the main
source of scientific knowledge on the biology of cancer and
modelling/ simulation as it relates to drug development. Christophe
maintains his knowledge through regular literature reviews and is
highly valued by clients for this reason. Christophe is also
responsible for managing the Company's R&D activities and in
particular of our initiatives in personalised medicine.
-- Dr Tim Corn (NED) qualified in medicine at King's College
Hospital and, after becoming honorary Consultant and Senior
Lecturer, joined the pharmaceutical industry in 1983. He has held
senior positions in both big and small pharma as well as at the
MHRA and became CMO of several small but highly successful
venture-backed companies, such as EUSA Pharma and Zeneus Pharma. He
has played a key role in more than twenty regulatory approvals in
the USA and Europe, is the author of more than forty scientific
publications, and was elected Fellow of both the Faculty of
Pharmaceutical Medicine and the Royal College of Psychiatrists.
-- Mr Shalabh Kumar (NED) is a proven business executive with
over 30 years of experience within the life sciences consulting and
services industry. Shalabh co-founded, and subsequently was the
Chief Executive Officer of Kinapse, a life sciences consulting and
outsourcing service provider. The company was later acquired by
Syneos Health(R) (Nasdaq: SYNH) after growing to employ over 600
people across UK, India and US. Prior to that he has worked in
Accenture, Gillette (Procter & Gamble) and Unilever. More
recently, Shalabh has been working as an independent strategy
consultant and angel investor in the life sciences industry,
working with biopharmaceutical companies, life sciences services
and technology companies and private equity firms. Recent roles
include Chairman of the board of Clustermarket Ltd, a lab software
start-up; independent strategy consultant to the life sciences
R&D group of Accenture plc (NYSE: ACN); and Global Head of
Services at Navitas Life Sciences, a technology-backed life
sciences contract research organisation. Shalabh is also Chairman
of Pharmalancers Ltd, a UK-based life sciences services tech
start-up.
-- Anthony Clayden, of Strategic Finance Director Ltd
(Secretary) is Head of Finance and Company Secretary with over 24
years' experience directing or advising over 50 high growth
potential businesses of differing size and complexity and brings
broad experience of strategic, operational, and financial matters.
His career encompasses numerous businesses in the life sciences and
healthcare sector including 6 years as Chief Financial Officer of
AIM quoted Futura Medical Plc where he was involved in its IPO and
a series of placings. Previously, Anthony worked with KPMG and PwC
on a range of corporate finance matters including fundraisings,
company sales and acquisition advice. Anthony has a B.Sc. (Hons) in
Natural Sciences from Durham University and is a Qualified
Chartered Accountant. Although Anthony is not a Director of the
Company, he provides invaluable advice on all matters
financial.
The Company holds annual briefings for the board covering
regulations that are relevant to their role as directors of an
AIM-quoted company.
The Company has not to date sought external advice on keeping
Director's skills up to date but believes that their blend of past
and ongoing experience provides them with the relevant up to date
skills needed to act as board members for a small company. The
Company keeps close contact with its NOMAD and nominated broker on
all such issues
7. Evaluate board performance based on clear and relevant
objectives, seeking continuous improvement
Evaluation of the performance of the board has historically been
implemented in an informal manner. The board will formally review
and consider the performance of each director at or around the time
of the Company's annual general meeting.
On an ongoing basis, board members maintain a watching brief to
identify relevant internal and external candidates who may be
suitable additions to or backup for current board members, however,
the directors consider that the Company is too small to have either
an internal succession plan and that it would not be cost effective
to maintain an external candidate list prior to the need
arising.
8. Promote a corporate culture that is based on ethical values
and behaviours
The board believes that the promotion of a corporate culture
based on sound ethical values and behaviours is essential to
maximise shareholder value. The Company maintains and annually
reviews a handbook that includes clear guidance on what is expected
of every employee and officer of the Company. Adherence of these
standards is a key factor in the evaluation of performance within
the Company, including during annual performance reviews. In
addition, staff matters are a standing topic at every board meeting
and the CEO reports on any notable examples of behaviours that
either align with or are at odds with the Company's stated values.
The directors believe that the Company culture encourages
collaborative, ethical behaviour which benefits employees, clients
and shareholders. The directors further believe that all employees
and consultants have worked in line with the Company's values
during this financial year.
9. Maintain governance structures and processes that are fit for
purpose and support good decision-making by the board
The board of the Company, together with its sub-committees, is
responsible for the following:
-- The setting of and execution of the overall strategy of the Company;
-- The setting of financial targets and monitoring of the
Company's performance vs these targets on a monthly basis;
-- The preparation and approval of interim and final results for the Company;
-- The commissioning and oversight of the audit of the Company's full year results;
-- The preparation and approval of the Company's annual report;
-- The preparation of resolutions to be voted upon in the Company's Annual General Meeting;
-- Approval of regulatory communications;
-- The setting of guidelines for remuneration of employees,
Directors and consultants, including where appropriate long-term
incentives such as share option schemes;
-- The approval and oversight of any changes to the capital
structure of the Company such as the raising of capital through
placings;
-- The identification, evaluation and monitoring of key
strategic risks to the Company's business; and
-- The employment of key officers and Directors of the Company
(the latter as recommendations to be voted on at the Company's
AGM).
The key board roles are as follows:
-- Chairman: The primary responsibility of the chair is to lead
the board effectively and to oversee the adoption, delivery and
communication of the Company's corporate governance model. The
chair is also responsible for making sure that the board agenda
concentrates on the key issues, both operational and financial,
with regular reviews of the Company's strategy and its overall
implementation
-- CEO: Charged with the delivery of the business model within
the strategy set by the board. Works with the other directors in an
open and transparent way. Keeps the board up-to-date with
operational performance, risks and other issues to ensure that the
business remains aligned with the strategy
The board has two sub-committees appointed by the board of
directors. They are as follows:
-- Audit Committee: The Committee meets to consider matters
relating to the Company's financial position and financial
reporting. The Committee reviews the independence and objectivity
of the external auditors, Shipleys LLP, as well as the amount of
non-audit work undertaken by them, to satisfy itself that this will
not compromise their independence. Details of the fees paid to
Shipleys LLP during the current accounting period are given in the
notes to the accounts. The Audit Committee currently comprises Dr
Tim Corn and Dr Christophe Chassagnole, with Strategic Finance
Director Ltd (Company Secretary) attending as secretary
-- Remuneration Committee: The Remuneration Committee has been
established primarily to determine the remuneration, terms and
conditions of employment of the Executive Directors of the Company.
Any remuneration issues concerning Non-Executive Directors are
resolved by this Committee and no Director participates in
decisions that concern his own remuneration. The Remuneration
Committee comprises Mr Shalabh Kumar and Dr Jim Millen, with
Strategic Finance Director Ltd (Company Secretary) attending as
secretary
Finally, the Company gives regular consideration to how best to
evolve its governance framework as it grows. It currently does not
have a nominations committee .
10. Communicate how the Company is governed and is performing by
maintaining a dialogue with shareholders and other relevant
stakeholders
On the Company's website shareholders can find all historical
RNS announcements, interim reports and annual reports. Annual
Reports and Annual General Meeting Circulars are made available to
all registered shareholders or nominees via electronic shareholder
communication system managed by the Company's registrar and results
of Annual General Meeting votes are also published on the Company's
website. The Company's website allows shareholders and other
interested parties to sign up to a mailing list to enable them to
directly receive regulatory and other company releases. As
described earlier, the Company also maintains email and phone
contacts which shareholders can use to make enquiries or
requests.
Environmental and Social Governance
The Company has a relatively small environmental footprint and
implements various policies to ensure it is kept to a minimum,
including:
-- Use of modular office space with services shared with other occupiers
-- Adoption of flexible "hot-desking", especially in light of
new more flexible home/ office working models post-COVID
-- Recycling of office waste where possible
The activities of the company are targeted at supporting
companies developing drugs and therapies to fight cancer and in
addition, the computer-based modelling we undertake serves to
reduce the volume of animal testing needed in developing such
therapies.
Finally, in terms of diversity and inclusion, of eight
employees, four are women and three are non-UK nationals.
Post balance sheet events
On 3 July 2023, a date which is after the reporting date but
prior to the signing of these financial statements, the Board
allotted 38,047,700 ordinary shares.
34,500,000 of these shares were placed through the Company's
broker Hybridan LLC at GBP0.01 per share. 1,000,000 shares were
issued via a direct subscription to the Directors of the Company
and 2,547,700 shares were placed via a retail subscription offer.
All shares were placed at GBP0.01 per share.
There were no additional post reporting events to note.
Statement as to disclosure of information to auditors
The Directors in office on 27 September 2023 have confirmed
that, as far as they are aware, there is no relevant audit
information of which the auditors are unaware. Each of the
Directors have confirmed that they have taken all the steps that
they ought to have taken as Directors in order to make themselves
aware of any relevant audit information and to establish that it
has been communicated to the auditors.
Going concern, responsibilities and disclosure
After making appropriate enquiries, the Directors have a
reasonable expectation that the Company has adequate resources to
continue in operational existence for the foreseeable future. For
this reason, they continue to adopt the going concern basis in
preparing the financial statements.
Internal controls and risk management
The board is responsible for the Company's system of internal
control and risk management and for reviewing its effectiveness.
The Directors have a reasonable expectation that the Company will
safeguard the Company's assets. The risk management process and
internal control systems are designed to manage rather than
eliminate the risk of failing to achieve business objectives and
can only provide reasonable, but not absolute, assurance against
material misstatement or loss. The key features of the Company's
system of internal control are as follows:
-- a clearly defined organisational structure and set of objectives;
-- the executive Directors play a significant role in the day to
day operation of the business; and
-- detailed monthly management accounts are produced for the
board to review and take appropriate action.
Annual General Meeting
The Company values the views of its shareholders and recognises
their interest in the Company's strategy, performance and the
ability of the board. The AGM provides an opportunity for two-way
communication and all shareholders are encouraged to attend and
participate. Separate resolutions will be put to shareholders at
the AGM, giving them the opportunity to discuss matters of
interest. The Company counts all proxy votes and will indicate the
level of proxies lodged on each resolution, after each has been
dealt with on a show of hands.
The Company intends to hold an in-person (rather than online)
AGM this year, further details of which will be announced
shortly.
Independent Auditors' Report to the Members of Physiomics
Plc
Opinion
We have audited the financial statements of Physiomics Plc for
the year ended 30 June 2023 which comprise the income statement,
the statement of comprehensive income, the statement of financial
position, the cash flow statement, the statement of changes in
equity and the related notes. The financial reporting framework
that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the United Kingdom.
In our opinion:
-- the financial statements give a true and fair view of the
state of the Company's affairs as at 30 June 2023 and of its loss
for the year then ended;
-- the financial statements have been properly prepared in
accordance with IFRSs as adopted by the United Kingdom; and
-- the financial statements 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 Company
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.
Conclusions relating to going concern
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.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
company's ability to continue as a going concern for a period of at
least twelve months from when the financial statements are
authorised for issue.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Our assessment of risks of material misstatement
The assessed risks of material misstatement described below are
those that had the greatest effect on our audit strategy, the
allocation of resources in the audit and directing the efforts of
the engagement team.
In our opinion the financial statements:
-- give a true and fair view of the state of the company's
affairs as at 30 June 2023 and of its 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.
Risk How the Scope of our audit responded
to the risk
Management override of controls
Journals can be posted that
significantly alter the Financial We examined journals posted around
Statements and potential give the year end, specifically focusing
rise to the risk of fraud on areas which are more easily manipulated
such as accruals, prepayments, investment
valuation and the bank reconciliation.
-----------------------------------------------
Going Concern We reviewed the Directors' assessment
There is a risk that the Company of the business remaining a Going
is not a going concern. Concern. We compared this assessment
to our own understanding of the risks,
and the nature of the Company's operations
and customer base. We then conducted
a review of going concern in respect
of reviewing forecasts and current
trading performance, and carrying
out stress testing. The work undertaken
considered a period of at least 12
months from the date of approving
these financial statements.
The disclosures in the financial statements
adequately reflect the Directors'
conclusions around the going concern
assumption remains appropriate .
-----------------------------------------------
Fraud in Revenue Recognition
There is a risk that revenue Income was tested on a sample basis
is materially understated due from contracts. No evidence of fraud
to fraud. or other understatement was identified.
-----------------------------------------------
Accounting Estimates
Potential risk of inappropriate All areas were examined to identify
accounting estimates giving any potential accounting estimates.
rise to misstatement in the These estimates were then reviewed
accounts. and tested for adequacy.
-----------------------------------------------
Overstatement of Administrative
Expenses A proof in total calculation and substantive
There is a risk that the Company's testing were both undertaken and no
administrative expenses are evidence of overstatement was identified.
overstated.
-----------------------------------------------
Grant Income
There is a risk that grant income Grant income was reviewed and a sample
may be materially misstated. basis from contracts. No evidence
of misstatement was identified.
-----------------------------------------------
Our audit procedures relating to these matters were designed 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.
Our application of materiality
We define materiality as the magnitude of misstatement in the
Financial Statements that of materiality makes it probable that the
economic decisions of a reasonably knowledgeable person would be
changed or influenced. We use materiality both in planning and in
the scope of our audit work and in evaluating the results of our
work.
We determined materiality for the Company to be GBP18,172. We
agreed with the Audit Committee that we would report to them all
audit differences in excess of 5% of materiality, as well as
differences below that which would, in our view, warrant reporting
on a qualitative basis. We also report to the Audit Committee on
disclosure matters that we identified when assessing the overall
presentation of the Financial Statements.
An overview of the scope of our audit
An audit involves obtaining evidence about the amounts and
disclosures in the Financial Statements sufficient to give
reasonable assurance that the Financial Statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies are
appropriate to the Company's circumstances and have been
consistently applied and adequately disclosed; the reasonableness
of significant accounting estimates made by the Directors; and the
overall presentation of the Financial Statements. In addition we
read all the financial and non-financial information in the Annual
Report to identify material inconsistencies with the audited
Financial Statements and to identify any information that is
apparently materially incorrect based on, or materially
inconsistent with, the knowledge acquired by us in the course of
performing the audit. If we become aware of any apparent material
misstatement or inconsistencies we consider the implications for
our report.
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, 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 Company
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, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements 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 set out on page 16, 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 Company'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 Company or to cease
operations, or have no realistic alternative but to do so.
Our 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, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
-- We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Company and determined the
most significant are those that relate to the reporting framework
(IFRS, the Companies Act 2006)) and the relevant tax compliance
regulations in which the Company operates.
-- We understood how the Company is complying with those
frameworks by making enquiries on the management and those
responsible for legal and compliance procedures. We corroborated
our enquiries through our review of board minutes and any
correspondence received from regulatory bodies.
-- We assessed the susceptibility of the Company's financial
statements to material misstatement, including how fraud might
occur by enquiring with management during the planning, fieldwork
and completion phase of our audit. We considered the controls that
the Company has established to address risks identified, or that
otherwise prevent, deter and detect fraud and how management
monitors those controls. Where the risk was considered to be
higher, we performed audit procedures to address each identified
fraud risk including revenue recognition. These procedures included
testing manual journals and were designed to provide reasonable
assurance that the financial statements were free from fraud or
error.
-- Based on this understanding we designed our audit procedures
to identify non-compliance with such laws and regulations. Our
procedures involved journal entry testing, with a focus on manual
journals and journals indicating large or unusual transactions
based on our understanding of the business; enquiries of the
management and focus testing.
An auditor conducting an audit in accordance with ISAs (UK) is
responsible for obtaining reasonable assurance that the financial
statements taken as a whole are free from material misstatement,
whether caused by fraud or error and in our audit procedures
described above. Owing to the inherent limitations of an audit,
there is an unavoidable risk that some material misstatements of
the financial statements may not be detected, even though the audit
is properly planned and performed in accordance with the ISAs
(UK).
In our opinion, based on the work undertaken in the course of
our audit:
-- The information given in the strategic report and the
director's 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.
As part of an audit in accordance with ISAs (UK), we exercise
professional judgment and maintain professional scepticism
throughout the audit. We also:
-- Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal
control.
-- Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the internal control.
-- Evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related disclosures
made by the director.
-- Conclude on the appropriateness of the director's use of the
going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the company's
ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in
our auditor's report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor's report. However, future events or
conditions may cause the company to cease to continue as a going
concern.
-- Evaluate the overall presentation, structure and content of
the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
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
Company'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 Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Income Statement for the year ended 30 June 2023
Year Year
ended ended
30 June 30 June
2023 2022
Notes GBP GBP
Revenue 3 597,354 830,266
Other operating income 3 8,380 70,441
Total income 605,734 900,707
Net operating expenses (1,179,467) (1,259,821)
Operating loss 4 (573,733) (359,114)
Finance income 7 1,724 142
Loss before taxation (572,009) (358,972)
Income tax income 9 94,752 105,384
----------- -----------
Loss for the year attributable
to equity shareholders 25 (477,257) (253,138)
=========== ===========
Earnings per share (shown
in pence) 10
Basic and diluted (0.49)p (0.26)p
Statement of Comprehensive Income
Year ended Year ended
30 June 30 June
2023 2022
GBP GBP
Loss for the year (477,257) (253,138)
Other comprehensive income - -
Total comprehensive income/ (expense) for the
year (477,257) (253,138)
Attributable to:
---------- ----------
Equity holders (477,257) (253,138)
========== ==========
Statement of Financial Position as at 30 June 2023
2023 2022
Non-current assets Notes GBP GBP
Intangible assets 12 5,479 3,005
Property, plant and equipment 13 7,757 14,365
Other receivables 14 180 395
13,416 17,765
----------- -----------
Current assets
Trade and other receivables 14 244,385 409,977
Cash and cash equivalents 416,592 687,674
----------- -----------
660,977 1,097,651
----------- -----------
Total assets 674,393 1,115,416
----------- -----------
Current liabilities
Trade and other payables 18 122,656 126,347
Deferred revenue 19 20,017 14,262
----------- -----------
Total liabilities 142,673 140,609
----------- -----------
Net current assets 518,304 957,042
----------- -----------
Net assets 531,720 974,807
=========== ===========
Equity
Called up share capital 22 1,283,096 1,283,096
Share premium account 23 5,936,478 5,936,478
Other reserves 24 147,651 281,660
Retained earnings 25 (6,835,505) (6,526,427)
----------- -----------
Total equity 531,720 974,807
=========== ===========
Statement of Changes in Equity for the year ended 30 June
2023
Share Share Other Profit Total
capital premium Reserves and loss
account reserves
Notes GBP GBP GBP GBP GBP
Balance at 1 July 2021 1,282,736 5,993,993 222,274 (6,273,289) 1,165,714
Year ended 30 June 2022:
Loss and total
comprehensive
income for the year - - - (253,138) (253,138)
Issue of share capital 23 360 2,485 - - 2,845
Transfer to other reserves - - 59,386 - 59,386
---------- ---------- --------- ------------ ---------------------
Balance at 30 June 2022 1,283,096 5,936,478 281,660 (6,526,427) 974,807
---------- ---------- --------- ------------ ---------------------
Year ended 30 June 2023:
Loss and total
comprehensive
income for the year - - - (477,257) (477,257)
Issue of share capital 23 - - - - -
Transfer to other reserves - - 34,170 - 34,170
Other movements - - (168,179) 168,179 -
---------- ---------- --------- ------------ ---------------------
Balance at 30 June 2023 1,283,096 5,936,478 147,651 (6,835,505) 531,720
========== ========== ========= ============ =====================
Cash Flow Statement for the year ended 30 June 2023
2023 2022
Notes GBP GBP GBP GBP
Cash flows from operating
activities
Cash absorbed by operations 32 (372,422) (468,767)
Tax refunded 105,835 119,374
------------- -----------
Net cash outflow from operating
activities (266,587) (349,393)
Investing activities
Purchase of intangible assets (3,350) -
Purchase of tangible fixed
assets (3,285) (9,370)
Proceeds on disposal of tangible 416 -
fixed assets
Interest received 1,724 142
------------ ---------
Net cash used in investing
activities (4,495) (9,228)
Financing activities
Proceeds from issue of shares - 2,845
Net cash generated from
financing activities - 2,845
------------- -----------
Net decrease in cash and
cash equivalents (271,082) (355,776)
Cash and cash equivalents
at beginning of year 687,674 1,043,450
------------- -----------
Cash and cash equivalents
at end of year 416,592 687,674
============= ===========
Notes to the Financial Statements
1 Accounting policies
Company information
Physiomics Plc is a company limited by shares incorporated in
England and Wales. The registered office is The Magdalen Centre,
Oxford Science Park, Robert Robinson Avenue, Oxford, OX4 4GA. The
Company's ordinary shares of 0.4p each are admitted to trading on
the AIM market of the London Stock Exchange plc.
1.1 Accounting convention
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted for
use in the United Kingdom and with those parts of the Companies Act
2006 applicable to companies reporting under IFRS, except as
otherwise stated.
The financial statements have been prepared on the historical
cost basis. The principal accounting policies adopted are set out
below.
1.2 Going concern
The accounts have been prepared on the going concern basis. The
Company primarily operates in the relatively defensive
pharmaceutical industry.
The Company had GBP416,592 of cash and cash equivalents as at 30
June 2023 (2022: GBP687,674).
The board operates an investment policy under which the primary
objective is to invest in low-risk cash or cash equivalent
investments to safeguard the principal.
The Company's projections, taking into account anticipated
revenue streams, show that the Company has sufficient funds to
operate for the next twelve months. In coming to this conclusion,
the Company notes that current cash and currently contracted
projects are projected to cover budgeted expenses for the majority
of this period. In addition to currently contracted projects the
Company anticipates a number of new clients as well as repeat
business from some existing clients.
After reviewing the Company's projections, the Directors believe
that the Company is adequately placed to manage its business and
financing risks for the next twelve months. Accordingly, they
continue to adopt the going concern basis in preparing the annual
report and accounts.
1.3 Revenue recognition
The revenue shown in the income statement relates to amounts
received or receivable from the provision of services associated
with outsourced systems and computational biology services to
pharmaceutical companies.
Revenue from the provision of the principal activities is
recognised by reference to the stage of completion of the
transaction at the balance sheet date where the amount of revenue
can be measured reliably and sufficient work has been completed
with certainty to ensure that the economic benefit will flow to the
Company.
1.4 Intangible assets other than goodwill
Intangible assets acquired separately from third parties are
recognised as assets and measured at cost.
Following initial recognition, intangible assets are measured at
cost or fair value at the date of acquisition less any amortisation
and any impairment losses. Amortisation costs are included within
the net operating expenses disclosed in the income statement.
Intangible assets are amortised over their useful lives as
follows:
Useful life Method
Trademarks 10 years Straight line
Licenses 5 years Straight line
Useful lives are also examined on an annual basis and
adjustments, where applicable are made on a prospective basis. The
Company does not have any intangible assets with indefinite
lives.
1.5 Tangible fixed assets
Tangible fixed assets are initially measured at cost and
subsequently measured at cost or valuation, net of depreciation and
any impairment losses.
Depreciation is recognised so as to write off the cost or
valuation of assets less their residual values over their useful
lives on the following bases:
Fixtures and fittings 3 years straight line
IT Equipment 3 years straight line
The gain or loss arising on the disposal of an asset is
determined as the difference between the sale proceeds and the
carrying value of the asset and is recognised in the profit and
loss account.
1.6 Research and development expenditure
Expenditure on research activity is recognised as an expense in
the period in which it is incurred.
1.7 Impairment of tangible and intangible assets
Property, plant and equipment and intangible assets are reviewed
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 carrying amount
exceeds its recoverable amount. The recoverable amount is the
higher of an asset's fair value less costs to sell and value in
use. For purposes of assessing impairment, assets that do not
individually generate cash flows are assessed as part of the cash
generating unit to which they belong. Cash generating units are the
lowest levels for which there are cash flows that are largely
independent of the cash flows from other assets or groups of
assets.
1.8 Fair value measurement
IFRS 13 establishes a single source of guidance for all fair
value measurements. IFRS 13 does not change when an entity is
required to use fair value, but rather provides guidance on how to
measure fair value under IFRS when fair value is required or
permitted. The resulting calculations under IFRS 13 affected the
principles that the company uses to assess the fair value, but the
assessment of fair value under IFRS 13 has not materially changed
the fair values recognised or disclosed. IFRS 13 mainly impacts the
disclosures of the company. It requires specific disclosures about
fair value measurements and disclosures of fair values, some of
which replace existing disclosure requirements in other
standards.
1.9 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at
call with banks, other short-term liquid investments with original
maturities of three months or less.
1.10 Financial assets
Financial assets are recognised in the Company's statement of
financial position when the Company becomes party to the
contractual provisions of the instrument.
Financial assets are classified into specified categories. The
classification depends on the nature and purpose of the financial
assets and is determined at the time of recognition.
Financial assets are initially measured at fair value plus
transaction costs, other than those classified as fair value
through the income statement, which are measured at fair value.
Trade and other receivables
Trade receivables are recognised and carried at the lower of
their original invoiced value and recoverable amount. Balances are
written off when the probability of recovery is considered to be
remote.
Impairment of financial assets
Financial assets, other than those at fair value through the
income statement, are assessed for indicators of impairment at each
reporting end date.
Financial assets are impaired where there is objective evidence
that, as a result of one or more events that occurred after the
initial recognition of the financial asset, the estimated future
cash flows of the investment have been affected.
Derecognition of financial assets
Financial assets are derecognised only when the contractual
rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and
rewards of ownership to another entity.
1.11 Financial liabilities
Financial liabilities are classified as either financial
liabilities at fair value through the income statement or other
financial liabilities.
Financial liabilities are classified according to the substance
of the contractual arrangements entered into.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the
Company's obligations are discharged, cancelled, or they
expire.
1.12 Equity instruments
Equity instruments issued by the company are recorded at the
proceeds received, net of direct issue costs. An equity instrument
is any contract that evidences a residual interest in the assets of
the Company after deducting all of its liabilities.
1.13 Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit 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 company's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the reporting end
date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements 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 goodwill or from the initial recognition of other assets and
liabilities in a transaction that affects neither the tax profit
nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each
reporting end 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 is realised.
Deferred tax is charged or credited in the income statement, 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 the company has a
legally enforceable right to offset current tax assets and
liabilities and the deferred tax assets and liabilities relate to
taxes levied by the same tax authority.
1.14 Employee benefits
The costs of short-term employee benefits are recognised as a
liability and an expense.
The cost of any unused holiday entitlement is recognised in the
period in which the employee's services are received.
Termination benefits are recognised immediately as an expense
when the company is demonstrably committed to terminate the
employment of an employee or to provide termination benefits.
1.15 Retirement benefits
Payments to defined contribution retirement benefit schemes are
charged as an expense as they fall due.
1.16 Share-based payments
The Company issues equity settled share based payments to
certain employees. Equity settled share based payments are measured
at fair value at the date of grant. The fair value determined at
the grant date is expensed on a straight-line basis over the
vesting period. Fair value is measured by use of a Black-Scholes
model.
1.17 Leases
At inception, the company assesses whether a contract is, or
contains, a lease within the scope of IFRS 16. A contract is, or
contains, a lease if the contract conveys the right to control the
use of an identified asset for a period of time in exchange for
consideration. Where a tangible asset is acquired through a lease,
the company recognises a right-of-use asset and a lease liability
at the lease commencement date. Right-of-use assets are included
within tangible fixed assets, apart from those that meet the
definition of investment property.
The right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability adjusted for
any lease payments made at or before the commencement date plus any
initial direct costs and an estimate of the cost of obligations to
dismantle, remove, refurbish or restore the underlying asset and
the site on which it is located, less any lease incentives
received.
The right-of-use asset is subsequently depreciated using the
straight-line method from the commencement date to the earlier of
the end of the useful life of the right-of-use asset or the end of
the lease term. The estimated useful lives of right-of-use assets
are determined on the same basis as those of other tangible fixed
assets. The right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements
of the lease liability.
The lease liability is initially measured at the present value
of the lease payments that are unpaid at the commencement date,
discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the company's incremental
borrowing rate. Lease payments included in the measurement of the
lease liability comprise fixed payments, variable lease payments
that depend on an index or a rate, amounts expected to be payable
under a residual value guarantee, and the cost of any options that
the company is reasonably certain to exercise, such as the exercise
price under a purchase option, lease payments in an optional
renewal period, or penalties for early termination of a lease.
The company has elected not to recognise right-of-use assets and
lease liabilities for short-term leases of machinery that have a
lease term of 12 months or less, or for leases of low-value assets
including IT equipment. The payments associated with these leases
are recognised in profit or loss on a straight-line basis over the
lease term.
1.18 Government grants
Government grants are recognised when there is reasonable
assurance that the grant conditions will be met and the grants will
be received.
Government grants of a revenue nature are credited to the profit
and loss account in the same period as the related expenditure.
1.19 Foreign exchange
Transactions in currencies other than pounds sterling are
recorded at the rates of exchange prevailing at the dates of the
transactions. At each reporting end date, monetary assets and
liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the reporting end date.
Gains and losses arising on translation are included in the income
statement for the period.
1.20 Segment reporting
A business segment is a group of assets and operations engaged
in providing products or services that are subject to risks and
returns that are different from those of other business segments. A
geographical segment is engaged in providing products or services
within a particular economic environment that are subject to risks
and return that are different from those of segments operating in
other economic environments.
2 Critical accounting estimates and judgements
Revenue for projects started and completed during the financial
year is recognised in full during the year. Revenue from a project
which commences in one financial year and is completed in a
subsequent financial year is recognised over the life of the
project based on the expected period to completion as anticipated
at each balance sheet date less what has already been recognised
during a previous financial period or periods.
There were no other material accounting estimates or areas of
judgements required.
3 Revenue & segmental reporting
An analysis of the Company's revenue is as follows:
2023 2022
GBP GBP
Revenue 597,354 830,266
======== ========
Other operating
income
Grant income 8,380 70,441
======== ========
The principal activities are the provision of outsourced systems
and computational biology services to pharmaceutical companies.
This activity comprises a single segment of operation of a sole
UK base and entirely UK based assets. Revenue was derived in the
UK, European Union Switzerland and USA (2022: UK, European Union
Switzerland and USA) from its principal activity.
4 Operating loss
2023 2022
GBP GBP
Operating loss for the period is stated after charging/(crediting):
Net foreign exchange losses/(gains) 491 548
Government grants (8,380) (70,441)
Fees paid to the Company's auditor, refer to below 11,025 10,500
Depreciation of property, plant and equipment 9,563 10,705
Profit on disposal of property, plant and equipment (85) - -
Amortisation of intangible assets 876 430
Share-based payments 34,170 59,386
======= ========
5 Auditors remuneration
2023 2022
Fees payable to the Company's auditor and associates: GBP GBP
For audit services
Audit of the Company's financial statements 11,025 10,500
======== ========
6 Employees
The average monthly number of persons (including directors)
employed by the Company during the year was:
2023 2022
Number Number
10 8
=========== ============
Their aggregate remuneration comprised: 2023 2022
GBP GBP
Wages and salaries 514,836 484,570
Social security costs 55,419 52,026
Other pension and insurance benefit costs 47,312 44,528
----------- ------------
617,567 581,124
=========== ============
Details of the remuneration of Directors are included in the
Directors Report on page 17.
7 Finance income
2023 2022
GBP GBP
Interest income
Bank deposits 1,724 142
================ =================
8 Finance costs
Interest rate risk
The Company finances its operations by cash and short-term
deposits. The Company's policy on interest rate management is
agreed at board level and is reviewed on an ongoing basis. Other
creditors, accruals and deferred revenue values do not bear
interest.
Interest rate profile
The Company had no bank borrowings at the 30 June 2023 and 30
June 2022.
9 Income tax expense
Continuing operations
2023 2022
GBP GBP
Current tax
Research and development tax credit: current year (94,752) (105,834)
(94,752) (105,834)
================= ============
From 1st April 2023 the main rate in corporation tax increased
from 19% to 25%. The expected effective rate of tax applicable
to the company for the year is a hybrid rate of 20.5%.
The charge for the year can be reconciled to the loss per the
income statement as follows:
2023 2022
GBP GBP
Loss before taxation (572,009) (358,972)
================= ============
Expected tax charge based on a corporation tax
rate of 20.5% (2022: 19.00%) (117,262) (68,205)
Expenses not deductible in determining taxable
profit 9,645 10,964
Unutilised tax losses carried forward 45,198 786
Research and development expenditure tax credit (94,752) (105,834)
Deferred / (accelerated) capital allowances (667) (315)
Research and development enhancement (72,462) (68,125)
Loss surrendered for tax credits 135,548 124,895
----------------- ------------
Tax charge for the year (94,752) (105,834)
================= ============
At 30 June 2023 tax losses of GBP4,112,999, (2022: GBP3,892,521)
remained available to carry forward against future taxable trading
profits. These amounts are in addition to any amounts surrendered
for Research and Developments tax credits. There is an unrecognised
deferred tax asset of GBP1,028,250, (2022: GBP737,640).
Deferred tax is calculated at 25%, the rate enacted at the
balance sheet date (2022: 19%. Which was the rate expected to apply
when the asset became realised).
10 Earnings per share
2023 2022
GBP GBP
Number of shares
Weighted average number of ordinary shares for
basic earnings per share 97,424,778 97,372,997
------------ ------------
Earnings - Continuing operations
Loss for the period from continued operations (477,257) (253,138)
------------ ------------
Earnings for basic and diluted earnings per share
being net profit attributable to equity shareholders
of the Company for continued operations (477,257) (253,138)
============ ============
Earnings per share for continuing operations
Basic and diluted earnings per share (shown in
pence) (0.49) (0.26)
Basic and diluted earnings per share
Loss from continuing operations (shown in pence) (0.49) (0.26)
-------- --------
The loss attributable to equity holders (holders of ordinary
shares) of the Company for the purpose of calculating the fully
diluted loss per share is identical to that used for calculating
the loss per share. The exercise of share options would have the
effect of reducing the loss per share and is therefore anti-
dilutive under the terms of IAS 33 'Earnings per Share'.
11 Financial instruments recognised in the statement of financial position
2023 2022
Held for trading: GBP GBP
Current financial assets
Trade and other receivables 48,328 83,903
Cash and cash equivalents 416,592 687,674
-------- ---------
464,920 771,577
======== =========
Current financial liabilities Trade and other
payables 91,986 108,014
Deferred revenue 20,017 14,262
-------- ---------
112,003 122,276
======== =========
The Company's financial instruments comprise cash and short-term
deposits. The Company has various other financial instruments, such
as trade debtors and creditors that arise directly from its
operations.
The main risks arising from the Company's financial instruments
are interest rate risk, liquidity risk and foreign currency risk.
The policies for managing these are regularly reviewed and agreed
by the board.
It is and has been throughout the year under review, the
Company's policy that no trading in financial instruments shall be
undertaken.
12 Intangible assets
Licenses Trademarks Total
GBP GBP GBP
Cost
At 1 July 2021 - 4,298 4,298
-------- ------------------ -----
At 30 June 2022 - 4,298 4,298
Additions- purchased 3,350 4,298 4,298
At 30 June 2023 3,350 4,298 7,648
-------- ------------------ -----
Amortisation and impairment
At 1 July 2021 - 863 863
Charge for the year - 430 430
-------- ------------------ -----
At 30 June 2022 - 1,293 1,293
Charge for the year 447 429 876
At 30 June 2023 447 1,722 2,169
-------- ------------------ -----
Carrying amount
At 30 June 2023 2,903 2,576 5,479
======== ================== =====
At 30 June 2022 - 3,005 3,005
======== ================== =====
13 Tangible fixed assets
Fixtures IT equipment Total
and fittings
Cost GBP GBP GBP
At 1 July 2021 3,028 74,793 77,822
Additions - 9,370 9,370
Disposals (179) (3,182) (3,362)
At 30 June 2022 2,849 80,981 83,830
-------------- ------------- --------
Additions - 3,286 3,286
Disposals - (2,539) (2,539)
At 30 June 2023 2,849 81,728 84,577
-------------- ------------- --------
Accumulated depreciation and impairment
At 1 July 2021 2,711 59,410 62,121
Charge for the year 316 10,389 10,705
Eliminated on disposal (179) (3,182) (3,361)
At 30 June 2022 2,848 66,617 69,465
Charge for the year 1 9,5619 9,562
Eliminated on disposal - (2,207) (2,207)
At 30 June 2023 2,849 73,971 76,280
-------------- ------------- --------
Carrying amount
At 30 June 2023 - 7,757 7,757
-------------- ------------- --------
At 30 June 2022 1 14,364 14,365
-------------- ------------- --------
At 30 June 2021 317 15,383 15,700
-------------- ------------- --------
14 Trade and other receivables
Due within one year
2023 2022
GBP GBP
Trade debtors 32,320 80,125
Other receivables 16,008 3,778
Corporation tax recoverable 94,751 105,834
VAT recoverable 1,853 32,988
Prepayments and accrued income 99,453 187,252
244,385 409,977
================= ================
Due after one year
2023 2022
GBP GBP
Prepayments and accrued income 180 395
180 395
================= ==============
15 Fair value of trade receivables
There are no material differences between the fair value of
financial assets and the amount at which they are stated in the
financial statements.
16 Fair value of financial liabilities
There are no material differences between the fair value of
financial liabilities and the amount at which they are stated in
the financial statements.
17 Liquidity risk
The Company seeks to manage financial risk by ensuring that
sufficient liquidity is available to meet foreseeable needs and to
invest cash assets safely and profitably.
18 Trade and other payables
Due within one
year
2023 2022
GBP GBP
Trade creditors 18,130 26,847
Accruals 57,793 78,197
Social security and other taxation 30,670 18,333
Other creditors 16,063 2,970
122,656 126,347
============== =============
19 Deferred revenue
2023 2022
GBP GBP
Arising from invoices in advance 20,017 14,262
====== ======
Analysis of deferred revenue
Deferred revenues are classified based on the amounts that are
expected to be settled within the next 12 months and after more
than 12 months from the reporting date, as follows:
2023 2022
GBP GBP
Current liabilities 20,017 14,262
====== ======
20 Retirement benefit schemes
Defined contribution schemes
The Company operates a defined contribution pension scheme for
all qualifying employees. The assets of the scheme are held
separately from those of the Company in an independently
administered fund.
The total costs charged to income in respect of defined
contribution plans is GBP38,421 (2022: GBP36,012).
As at the statement of financial position date the Company had
unpaid pension contributions totalling GBP6,063 (2022:
GBP2,970.
21 Share-based payment transactions
The Company operates two share option schemes: (1) under the
Enterprise Management Initiative Scheme ("EMI") and (2) an
unapproved share option scheme. Both are equity settled. Options
are granted with a fixed exercise price equal to the market price
of the shares under option at the date of grant. Some options are
subject to performance criteria relating to either share price
performance or the achievement of certain corporate milestones. The
contractual life of the options is 10 years from the date of
issue.
A summary of the options at the start and end of period for
directors and all other employees is presented in the following
table:
Holder Outstanding Granted Forfeited Exercised Outstanding Exercisable Exercise Date Date of
at start during during during at end at end price of expiry
of period period period period of period of period (p) grant
Dr. C.
Chassagnole 129,381 - 129,381 - - - 13.20 11-Feb-13 11-Feb-23
Dr. C.
Chassagnole 322,615 - - - 322,615 322,615 6.17 24-Mar-15 24-Mar-25
Dr. C.
Chassagnole 659,641 - - - 659,641 659,641 2.50 28-Feb-17 28-Feb-27
Dr. C.
Chassagnole 350,000 - - - 350,000 350,000 5.35 26-Mar-18 26-Mar-28
Dr. C.
Chassagnole 267,000 - - - 267,000 267,000 3.16 26-Mar-19 26-Mar-29
Dr. C.
Chassagnole 694,287 - - - 694,287 694,287 7.55 02-Mar-21 01-Mar-31
Dr. J.
Millen 520,000 - - - 520,000 520,000 5.35 26-Mar-18 26-Mar-28
Dr. J.
Millen 400,000 - - - 400,000 400,000 3.16 26-Mar-19 26-Mar-29
Dr. J.
Millen 985,454 - - - 985,454 985,454 7.55 02-Mar-21 01-Mar-31
Dr. P.
Harper,
former
director 51,752 - 51,572 - - - 13.20 11-Feb-13 11-Feb-23
Dr. P.
Harper,
former
director 129,046 - - - 129,046 129,046 6.17 24-Mar-15 24-Mar-25
Dr. P.
Harper,
former
director 258,092 - - - 258,092 258,092 3.50 21-Dec-15 21-Dec-25
Dr. P.
Harper,
former
director 140,000 - - - 140,000 140,000 5.35 26-Mar-18 27-Mar-28
Dr. P.
Harper,
former
director 448,760 - - - 448,760 448,760 7.55 02-Mar-21 01-Mar-31
Other staff 77,628 - 77,628 - - - 13.20 11-Feb-13 11-Feb-23
Other staff 188,605 - - - 188,605 188,605 6.17 24-Mar-15 24-Mar-25
Other staff 54,596 - - - 54,596 54,596 3.50 21-Dec-15 21-Dec-25
Other staff 201,891 - - - 201,891 201,891 2.50 28-Feb-17 28-Feb-27
Other staff 490,000 - 250,000 - 240,000 240,000 5.35 26-Mar-18 26-Mar-28
Other staff 353,000 - 160,000 - 193,000 193,000 3.16 26-Mar-19 26-Mar-29
Other staff 1,371,499 - 789,166 - 582,333 582,333 7.55 02-Mar-21 01-Mar-31
Other staff 850,000 - 214,812 - 635,188 - 4.38 29-Apr-22 29-Apr-32
Total 8,943,247 - 1,672,739 - 7,270,508 6,635,320
----------------------------------------- ---------------------------------- ---------------------------------- ---------------------------- ------------------------------ -------------------------------
There were no share options granted in the year. The weighted
average share price at the date of the grant in the prior year was
GBP0.0438.
The options outstanding at 30 June 2023 had an exercise price
ranging from GBP0.025 to GBP0.0755, and a remaining contractual
life ranging between 9 months and 9 years.
During the prior year, 850,000 options were granted on 29 April
2022. The weighted average fair value of the options on the
measurement date was GBP0.0438. Options vest according to time and
performance based criteria.
Fair value was measured using Black-Scholes share option pricing
model.
Inputs were as follows:
2023 2022
Expected volatility - 56.70%
Expected life - 2.47 years
Risk free rate - 1.614%
The expected volatility is based on the sixty day average
historical volatility of the Company over 3 years.
The expected life of options is now based on the share option
exercise history with the Company. The risk free rate of return is
derived from UK treasury yields at 2 and 3 years.
Total expenses of GBP34,170 related to equity settled share
based payment transactions were recognised in the year. (2022:
GBP59,386).
22 Share capital
2023 2022
GBP GBP
Ordinary share capital, issued and fully paid
97,424,778 Ordinary of 0.4p each 389,699 389,699
2,481,657,918 Deferred of 0.036p each 893,397 893,397
--------- ---------
1,283,096 1,283,096
========= =========
The ordinary shares carry no rights to fixed income. The
deferred shares have no voting rights and have no rights to receive
dividends or other income.
23 Share premium account
GBP
At 30 June 2022 & at 30 June 2023 5,936,478
==========================
The share premium account consists of proceeds from the issue of
shares in excess of their par value (which is included in the share
capital account).
24 Other reserves: share-based compensation reserve
GBP
At 30 June 2021 222,274
Additions 59,386
--------------
At 30 June 2022 281,660
Additions 34,170
Other movements (168,179)
--------------
At 30 June 2023 147,651
==============
The share-based compensation reserve represents the credit
arising on the charge for share options calculated in accordance
with IFRS 2.
In respect of cancelled and exercised options that had vested,
GBP168,179 (2022: GBPNil) was transferred from the share-based
payment reserve to retained earnings.
25 Retained earnings
GBP
At 1 July 2021 (6,273,289)
Loss for the period (253,138)
--------------
At 30 June 2022 (6,526,427)
Loss for the period (477,257)
Other movements (168,179
--------------
At 30 June 2023 (6,835,505)
==============
Retained earnings includes an amount of GBP237,889 (2022:
GBP237,889) in relation to the Equity Swap Agreement in 2014 which
under the Companies Act is not distributable.
In respect of cancelled and exercised options that had vested,
GBP168,179 (2022: GBPNil) was transferred from the share-based
payment reserve to retained losses reserve.
26 Operating lease commitments
Lessee
Amounts recognised in the income statement as an expense during
the period in respect of operating lease arrangements are as
follows:
2023 2022
GBP GBP
Minimum lease payments under operating leases 70,248 64,012
============= =============
At the reporting end date, the Company had outstanding
commitments for future minimum lease payments under non-cancellable
operating leases, which fall due as follows:
2023 2022
GBP GBP
Within one year 7,354 6,588
------------ ------------
7,354 6,588
============ ============
Capital commitments
At 30 June 2023 and 30 June 2022 the Company had no capital
commitments.
27 Capital risk management
The capital structure of the Company consists of cash and cash
equivalents and equity attributable to equity holders of the
Company, comprising issued capital, reserves and retained earnings
as disclosed in notes 22 to 25.
The board's policy is to maintain an appropriate capital base so
as to maintain investor and creditor confidence and to sustain
future development of the business. The Company's objectives when
managing capital are to safeguard the Company's ability to continue
as a going concern in order to provide returns for shareholders and
benefits for stakeholders and to maintain an optimal capital
structure to reduce the cost of capital. The Company has a record
of managing the timing and extent of discretionary expenditure in
the business.
In order to maintain or adjust the capital structure the Company
may issue new shares.
28 Events after the reporting date
On 3 July 2023, a date which is after the reporting date but
prior to the signing of these financial statements, the Board
allotted 38,047,700 ordinary shares.
34,500,000 of these shares were placed through the Company's
broker Hybridan LLC at GBP0.01 per share. 1,000,000 shares were
issued via a direct subscription to the Directors of the Company
and 2,547,700 shares were placed via a retail subscription offer.
All shares were placed at GBP0.01 per share.
There were no additional post reporting events to note.
29 Related party transactions
Remuneration of key management personnel
The remuneration of the Directors, who are the key management
personnel of the Company, is set out on page 17.
Included in other debtors is GBP10,000 received from Directors
which was received in advance for an equity issue in July 2023.
30 Controlling party
The Company does not currently have an ultimate controlling
party and did not have one in this reporting year or the preceding
reporting year.
31 Cash absorbed by operations
2023 2022
GBP GBP
Loss for the year after tax (477,257) (253,138)
Adjustments for:
Taxation credited (94,752) (105,834)
Investment income (1,724) (142)
Gain on disposal of tangible fixed assets (85 -
Amortisation and impairment of intangible assets 876 430
Depreciation and impairment of tangible fixed assets 9,563 10,705
Equity settled share-based payment expense 34,170 59,386
Movements in working capital:
(Increase)/decrease in debtors 154,724) (163,213)
Increase/(decrease) in creditors (3,692) 12,305
(Decrease)/increase in deferred revenue outstanding 5,755 (29,266)
------------- -------------
Cash absorbed by operations (372,422) (468,767)
============= =============
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FR ZZGZLNNLGFZM
(END) Dow Jones Newswires
September 28, 2023 02:00 ET (06:00 GMT)
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