TIDMROQ
RNS Number : 5727B
Roquefort Therapeutics PLC
05 June 2023
Roquefort Therapeutics plc
("Roquefort Therapeutics" or the "Company")
Annual Report & Financial Statements - 31 Dec 2022
Foundation & team in place to deliver key R&D and
commercial milestones
Roquefort Therapeutics plc (LSE:ROQ), the Main Market listed
biotech company focused on developing first in class medicines in
the high value and high growth oncology market , announces its
audited results for year ended 31 December 2022.
Copies of the Annual Report and Financial Statements will be
made available on the Company's website at:
https://www.roquefortplc.com/results-centre
Highlights
-- Acquisition of Oncogeni in September 2022 through the issue
of 50,000,000 new ordinary shares in the Company, together with
successful Placing raising gross proceeds of GBP1,015,000
-- Further strengthened Board and senior management team through
the appointment of Ajan Reginald as CEO, Professor Sir Martin Evans
as Chief Scientific Officer and Dr Darrin Disley as Non-Executive
Director
-- Reinforced the Company's foundation through Oncogeni's state of the art laboratory located in Stratford-upon-Avon which has the infrastructure required for the pre-clinical development of the Group's portfolio of antibodies, oligonucleotides and cell and gene therapies - significant cost advantages
-- Cash at year end 31 December 2022 of GBP2,322,974
Pre-clinical highlights
-- Acquisition of Oncogeni significantly increased pre-clinical
portfolio to four fully funded pre-clinical drug development
programs providing multiple opportunities for success
-- Highly synergistic programs focused on the pre-clinical
development of the Midkine antibodies, Midkine RNA, MK Cell
Therapies and STAT-6, siRNA
-- Signed partnership agreements and commenced pre-clinical
development programs with leading academic cancer research
centres
Post Period End Highlights
-- Key milestone achieved with ROQ-A1 and ROQ-A2 Midkine
antibody programs, targeting metastatic breast cancer, and lung and
liver metastasis, successfully demonstrated in vivo safety in
pre-clinical development programs and progressed into in vivo
efficacy studies
-- siRNA, MK cell therapy and Midkine oligonucleotide programs
progressing pre-clinical development
-- Signed exclusive worldwide license agreement (excluding
Japan) with Randox Laboratories for 10 years to utilise Midkine
antibodies in medical diagnostics
o Highly synergetic - deal will accelerate ability to diagnose
patients and therefore reduce time and costs when it reaches
clinical trials
-- Randox deal expected to strengthen balance sheet and
highlights the Company's deal making capabilities
-- Portfolio further enhanced to a total of five programmes with
the in-house development of a platform of novel mRNA cancer
medicines
-- Formation of Scientific Advisory Board
Outlook
-- On course with targets for clinical readiness for one of the
Company's development programs during H2 2023
-- Near-term IND and licensing opportunities from advanced stage
of development of Midkine portfolio products, MK cell and siRNA
products
-- Strategic goal to take advantage of the paradigm shift that
90% of successful biotech programs are acquired
-- Create value by identifying early innovation, developing it
either in-house or with a research partner towards clinical trials
and utilise experience to licence or sell to big pharma
Commenting on the Annual Results, Chief Executive Officer, Ajan
Reginald said: "In 2022 Roquefort Therapeutics made significant
progress, notably with the successful fundraise and completion of
the acquisition of Oncogeni in September 2022 which pivoted the
Company into a material oncology group. Post the acquisition of
Oncogeni, the Group's portfolio consisted of four highly
complementary fully funded programs with multiple novel
patent-protected pre-clinical anti-cancer medicines. Each lead
program is capable of becoming a first-in-class medicines targeting
some of the hardest to treat cancers."
"In 2023, the Midkine antibody program has successfully
demonstrated in vivo safety and progressed into in vivo efficacy
studies. In March 2023, the Company announced the successful
development of a fifth program, the mRNA Midkine cancer program,
the third in its Midkine family. Anti-cancer mRNA is a highly
attractive field with a relatively small number of highly
innovative companies able to develop mRNA cancer therapeutics."
"In H1 2023, the Group made significant strategic and commercial
progress by completing a licence and royalty agreement with Randox
Laboratories to utilise the Group's Midkine antibody portfolio for
clinical diagnostics. The transaction highlights the Group's
in-house deal making capabilities and strategic focus in
therapeutics. The partnership with Randox for cancer diagnostics
validates the Company's strategy to target Midkine and brings a
companion diagnostic, which increases the likelihood of clinical
trial success and reduces the associated time and cost."
"In summary, in the first 6 months of 2023, we have successfully
integrated Oncogeni to form a material oncology group, accelerated
the cancer programs to meet critical R&D milestones on-time and
on-budget and demonstrated our business model of realising value
through licensing transactions. This has established the strategic
and commercial foundation from which the Group will deliver
shareholder value in 2023-4."
Enquiries:
Roquefort Therapeutics plc
Stephen West (Chairman) / Ajan +44 (0)20 3290
Reginald (CEO) 9339
Hybridan LLP (Joint Broker)
Claire Louise Noyce
Optiva Securities Limited (Joint +44 (0)203 764
Broker) 2341
+44 (0)20 3411
Christian Dennis 1881
Buchanan (Public Relations)
Jamie Hooper / Ben Romney / George +44 (0)20 7466
Beale 5000
LEI: 254900P4SISIWOR9RH34
CHAIRMAN'S STATEMENT
I am pleased to report the audited financial statements to
shareholders for the year ended 31 December 2022. During the year
Roquefort Therapeutics (the "Company" and together with its
subsidiaries, the "Group") has made substantial progress towards
its corporate goals.
Most notably, in September 2022, Roquefort Therapeutics
successfully completed a fundraise via the issue of 7,249,998
ordinary shares raising total gross cash proceeds of GBP1,015,000
and the acquisition of Oncogeni for an aggregate equity
consideration fair value of GBP3.75 million through the issue of
50,000,000 new ordinary shares in the Company (the "Acquisition"),
transforming Roquefort Therapeutics into a material oncology
Group.
Roquefort Therapeutics completed the integration of the Oncogeni
portfolio and enhanced the Group's network of partnerships with
leading academic cancer research centres. These partners complement
the Group's own world-class in-house expertise and laboratory
infrastructure and enable Roquefort Therapeutics to implement a
broader and more effective development strategy. The Group believes
its distributed R&D model is highly scalable and cost
effective.
In parallel, business development activities were significantly
enhanced by meeting a number of leading pharmaceutical companies to
introduce Roquefort Therapeutics and present the novel portfolio.
This has enabled the Group to accelerate the out-licensing strategy
in both core and non-core applications.
Acquisition of Oncogeni
The acquisition of Oncogeni, diversified Roquefort Therapeutics
into a material oncology group with a pre-clinical anti-cancer
portfolio that is patent protected and fully funded to complete
pre-clinical development activities and submit applications to
commence clinical trials. In addition to significantly expanding
the portfolio, Roquefort Therapeutics now has a state-of-the-art
laboratory in the UK which provides the Group with major cost
saving and time advantages as the Group progresses through the
pre-clinical stage of development. The Acquisition also
strengthened the Roquefort Therapeutics Board and senior management
with complementary skills and expertise. The team in place has
exceptional experience in drug development and driving and
realising value in biotech. The Acquisition introduced new
shareholders into the Group, including Daiichi Sankyo, a global
pharmaceutical Group and CH Health, a specialist biotech venture
capital investor - validating the high potential of the Group's
investment proposition and growth strategy.
Oncogeni has developed two families of innovative cell and RNA
oncology medicines, both in pre-clinical development, which are
protected by nine patents and complement the existing Midkine
programs well:
-- Mesodermal Killer ("MK") cells: a new class of cellular
medicine engineered to kill cancer cells both directly and by
enhancing the activity of natural killer cells; and
-- Small interfering RNA ("siRNA") therapeutics: kill cancer
cells by inhibiting a novel cancer target STAT6 (signal transducer
and activator of transcription 6).
The MK and siRNA families consist of six and four drug
candidates each i.e., MK1-6 and siRNA 1-4. Each candidate is
protected by composition of matter patents and has the potential to
be a new medicine subject to the successful completion of
development.
The Board and senior management team was significantly expanded
with the acquisition of Oncogeni with Ajan Reginald joining as CEO
of Roquefort Therapeutics. Ajan has a strong track record in drug
development, biotech transactions and commercialisation. Over 20
years, he has served as the Global Head of Emerging Technologies
for Roche Group (SWX: ROG), Chief Operating Officer and Chief
Technology Officer of Novacyt S.A (LON: NCYT) and CEO of Celixir
Ltd.
In addition, Professor Sir Martin Evans was appointed as Chief
Scientific Officer. Sir Martin was the first scientist to identify
embryonic stem cells, which can be adapted for a wide variety of
medical purposes. His discoveries are now being applied in
virtually all areas of biomedicine - from basic research to the
development of new therapies. In 2007, he was awarded the Nobel
Prize for Medicine, the most prestigious honour in world science,
for these "ground-breaking discoveries concerning embryonic stem
cells and DNA recombination in mammals."
Further, Dr Darrin Disley was appointed Non-Executive Director,
and is a renowned scientist, entrepreneur, angel investor and
enterprise champion who has started, grown, or invested in over 40
start-up life science, technology and social enterprises, raising
US$600 million in business financing and closing US$700 million in
commercial deals. He was CEO of Horizon Discovery Group plc for 11
years, during which he led the company from start-up through a
US$113 million IPO, and rapid scale-up powered by multiple
acquisitions of US peer companies to become a global market leader
in gene editing and gene modulation technologies.
Since listing in March 2021, Roquefort Therapeutics has
established a quality team, underpinned by a proven collective
track record in the development, progression and commercialisation
of relevant medicines, a key aspect of Roquefort Therapeutics'
investment proposition and leaves the Group well placed, subject to
further funding, to deliver its growth objectives.
Pre-clinical development during 2022
During the period, the Group enhanced the portfolio
significantly, completed the integration of the Oncogeni portfolio.
Post the Acquisition, the Group's portfolio consisted of four fully
funded, novel patent-protected pre-clinical anti-cancer medicines.
The highly complementary profile of four best-in-class medicines
consists of:
-- Midkine antibodies with significant in vivo efficacy and toxicology studies;
-- Midkine RNA oligonucleotide therapeutics with novel anti-cancer gene editing action;
-- STAT-6 siRNA therapeutics targeting solid tumours with significant in vivo efficacy; and
-- MK cell therapy with direct and NK-mediated anti-cancer action.
The Group continued to progress its four novel patent-protected
pre-clinical anti-cancer medicines during the period through a
combination of partnerships with leading academic cancer research
centres and at the Group's state of the art laboratory.
With the programs focused on the pre-clinical development of the
Midkine antibodies, Midkine RNA oligonucleotide and STAT-6 siRNA,
the Group signed partnership agreements and commenced pre-clinical
development programs with the following leading academic cancer
research centres:
-- Olivia Newton-John Cancer Research Institute, La Trobe University, Melbourne
o Breast cancer metastasis, Midkine antibody program
-- Lowy Cancer Research Centre, University of New South Wales
o Liver and Colorectal cancer, Midkine RNA oligonucleotide and
STAT-6 siRNA programs
-- Hawkins Laboratory Biochemistry and Genetics, La Trobe University, Melbourne
o Lung cancer metastasis, Midkine antibody program
-- School of Medical Sciences, University of Sydney
o Midkine RNA oligonucleotide program
In addition, the Group is utilising its state of the art
laboratory in Stratford-upon-Avon to develop the MK cell therapy
program in-house. The laboratory includes a clean room, laminar
flow cabinets and cryopreservation infrastructure required for
pre-clinical development of innovative new medicines, particularly
cell and gene therapies.
Post Period End
2023 started with significant momentum, with the Group's Midkine
antibody program, targeting metastatic breast cancer and metastatic
lung cancer, successfully demonstrating in vivo safety in
pre-clinical development programs carried out by leading cancer
research groups (stated above), a key development milestone. ROQ-A1
and ROQ-A2 are the patented humanised antibody medicines designed
by Roquefort Therapeutics to target the novel Midkine target
prevalent in hard-to-treat cancers. These milestones were completed
on schedule and within budget. Both Midkine antibody candidates
will now progress into in vivo pre-clinical efficacy studies to
assess cancer killing ability in primary and metastatic breast
cancer and lung cancer. Both antibodies are valuable assets that
fit the established Big Pharma paradigm of treating cancer with
novel antibody therapeutics. The siRNA, MK cell therapy and Midkine
RNA oligonucleotide programs are also progressing well and are
expected to complete pre-clinical development milestones in Q2
2023.
The Group has always believed Midkine to be a truly novel target
and has been optimistic in the therapeutic potential of Midkine. In
February 2023 Roquefort Therapeutics validated Midkine as a target
by signing a Licence and Royalty agreement with leading diagnostics
group, Randox Laboratories in relation to the Group's Midkine
antibody portfolio. The Group is eligible to receive upfront and
potential marketing milestone receipts, as well as royalties on
diagnostics products sold. The Group received from Randox an
upfront amount of GBP200,000 and can earn further potential
milestone receipts of up to GBP150,000 for marketing approval in
certain jurisdictions. The Group will also receive royalties from
Randox on net sales of any commercialised diagnostic products.
Randox is developing a diagnostic to identify patients with cancers
that overexpress Midkine which is highly synergistic with Roquefort
Therapeutics' development of first-in-class cancer medicines. The
Licence and Royalty agreement also benefits the Group's preparation
for clinical trial readiness because diagnosing patients early will
accelerate the ability to diagnose patients for clinical trials
which will dramatically reduce time and costs associated, and in
addition, clinical trials with companion diagnostics have a much
higher success rate - 15.9% vs 7.6% (BIO, QSL Advisors and Informa
UK 2021 Report).
Finally in March 2023, Roquefort Therapeutics announced the
successful development of a fifth program and a third in its
Midkine family. The Roquefort Therapeutics team led by Vice
President of Drug Discovery, Professor Graham Robertson, has
delivered a pioneering mRNA anti-cancer program. This new platform
of mRNA therapeutics was developed in-house and consists of four
mRNA pre-clinical therapeutics targeting Roquefort Therapeutics'
novel Midkine target. Developing the mRNA anti-cancer program is
highly synergistic with the Group's existing Midkine RNA
oligonucleotide program in development at the University of New
South Wales, ensuring development continues to remain on budget and
on schedule. The addition of the mRNA family expanded Roquefort
Therapeutics' portfolio to five highly innovative programs which
remain fully funded to the critical value inflection point of
clinical trial readiness. The Group is now working towards
demonstrating efficacy of the mRNA therapeutics in specific cancer
targets, alongside the Group's existing Midkine RNA oligonucleotide
program.
Strategy & Outlook
Roquefort Therapeutics' strategy is to identify the next
generation of medicines for the most difficult to treat cancers
which have a high mortality rate, and develop medicines in-house
and with academic partners through the pre-clinical phase to
clinical trial readiness and IND filings. The Group has the
necessary expertise and experience to package up the programs for
licence or sale to big pharma which is the Group's ultimate aim to
realise value. Through the material strategic progress delivered
over the course of the prior year, Roquefort Therapeutics is well
positioned with currently five pre-clinical programs, and a
considerably strengthened team to deliver significant progress in a
focused and cost-effective manner, through a combination of
partnerships with leading academic cancer research centres and a
high-quality in-house laboratory.
2023 has started with significant momentum and the Group has
laid the foundations to realise this strategy having expanded the
Group in September 2022 and by its pre-clinical and commercial
successes announced during Q1 2023. The Randox licensing agreement
has demonstrated the Group's ability to achieve deals, and out
licencing to strategic partners, both in diagnostics and
therapeutics, is a key priority for Roquefort Therapeutics during
2023. The pre-clinical progress is highly encouraging and the Group
will update shareholders as to its further progress in due
course.
The Chairman's statement should be read as part of the strategic
report.
Stephen West, Executive Chairman
4 June 2023
DIRECTORS' REPORT
The Directors present their report with the audited fi nancial
statements of Roquefort Therapeutics plc ("the Company") and its
subsidiaries Lyramid Pty Limited ("Lyramid"), Oncogeni Limited
("Oncogeni") and Tumorkine Pty Limited ("Tumorkine") (together "the
Group") for the year ended 31 December 2022. A commentary on the
business for the year is included in the Chairman's Statement. A
review of the business is also included in the Strategic
Report.
The Company's Ordinary Shares are listed on the London Stock
Exchange, on the Official List pursuant to Chapter 14 of the
Listing Rules, which sets out the requirements for Standard
Listings.
Directors
The Directors of the Company during the year and their
beneficial interest in the Ordinary shares of the Company at 31
December 2022 were as follows:
Ordinary
Director Position Appointed shares Warrants
--------------------- --------------------------- ----------- ----------- ---------
Stephen West(1) Executive Chairman 17/08/2020 5,313,264 7,500,000
Chief Executive
Ajan Reginald Officer 16/09/2022 11,627,786 -
Sir Martin Chief Scientific 16/09/2022 - -
Evans Officer
Dr Michael
Stein Non-Executive Director 22/03/2021 - 2,000,000
Ms Jean Duvall Non-Executive Director 05/04/2022 - 300,000
Dr Simon Sinclair(2) Non-Executive Director 20/04/2022 60,415 300,000
Dr Darrin Disley Non-Executive Director 16/09/2022 1,225,966 -
--------------------- --------------------------- ----------- ----------- ---------
(1) 4,628,485 Ordinary shares and 7,500,000 warrants held by
Cresthaven Investments Pty Ltd ATF The Bellini Trust; and 684,779
Ordinary shares were held by Stephen West direct
(2) 300,000 warrants held by Livingstone Investment Holdings Ltd
; and 60,415 Ordinary shares were held by Simon Sinclair direct
Qualifying Third Party Indemnity Provision
At the date of this report, the Company has a third-party
indemnity policy in place for all Directors.
Substantial shareholders
As at 31 December 2022, the total number of issued Ordinary
Shares with voting rights in the Company was 129,149,998. Details
of the Company's capital structure and voting rights are set out in
note 18 to the fi nancial statements.
The Company has been noti fi ed of the following interests of 3
per cent or more in its issued share capital as at the date of
approval of this report.
Number of Ordinary Shares % of
Party Name Share Capital
----------------- ---------------------------------------------------------------------------- --------------
Ajan Reginald 11,627,786 9.00%
Abdelatif Lachab 7,750,000 6.00%
Jane Whiddon(1) 7,300,000 5.65%
M Sheikh 5,744,870 4.45%
Stephen West(2) 5,313,264 4.11%
Provelmare SA 5,000,000 3.87%
Z Sheikh 4,018,910 3.11%
M Rollins 4,000,000 3.10%
K Fallon 3,905,215 3.02%
----------------- ---------------------------------------------------------------------------- --------------
(1) 2,500,000 shares held by MIMO Strategies Pty Ltd (ATF the
MIMO Trust); 4,100,000 shares held by 6466 Investments Pty Ltd;
700,000 shares held by Nautical Holdings WA Pty Ltd - all of which
are entities controlled by J Whiddon
(2) 4,628,484 shares held by Cresthaven Investments Pty Ltd (ATF
the Bellini Trust) - an entity associated with S West
Financial instruments
Details of the Company's financial risk management objectives
and policies as well as exposure to financial risk are contained in
the accounting policies and note 21 of the financial
statements.
Greenhouse Gas (GHG) Emissions
The Company is aware that it needs to measure its operational
carbon footprint in order to limit and control its environmental
impact. However, due to its operational footprint being limited to
a laboratory leased from August 2022, consuming less than 40,000
kWh of energy, the Company is currently exempt from GHG reporting
requirements.
In the future, the Company will only measure the impact of its
direct activities, as the full impact of the entire supply chain of
its suppliers cannot be measured practically.
TCFD Disclosure
The Group was incorporated in August 2020, and operated
virtually until its acquisition of Oncogeni Limited in September
2022, at which point the Group commenced a short-term lease of
laboratory and office facilities. The Group therefore will begin to
consider its impact on the environment and the risks it faces from
climate change, for the first time during 2023 and expects to
develop its sustainability plans over a 5 year period, commensurate
with the size of its operations. Climate change was not considered
a principal risk or uncertainty for the year ended 31 December
2022.
In line with the requirements of the Financial Conduct
Authority's Listing Rule 14.3.27R, and for the above reasons, we
note that we have not made the disclosures, in respect of the
financial year ended 31 December 2022, in line with the
recommendations and recommended disclosures of the TCFD.
Dividends
The Directors do not propose a dividend in respect of the year
ended 31 December 2022.
Research and development, Future developments and events
subsequent to the year end
Further details of the Company's research and development,
future developments and events subsequent to the year-end are set
out in the Strategic Report. Research and development costs
incurred for the year ended 31 December 2022 were GBP319,315 (2021
- GBP698).
Corporate Governance
The Governance report forms part of the Director's Report.
Going Concern
The Directors have prepared financial forecasts to estimate the
likely cash requirements of the Group over the period to 30 June
2024, given its stage of development and lack of recurring
revenues. In preparing these financial forecasts, the Directors
have made certain assumptions with regards to the timing and amount
of future expenditure over which they have control. The Directors
have considered the sensitivity of the financial forecasts to
changes in key assumptions, including, among others, potential cost
overruns within committed spend and changes in exchange rates.
The Group's available resources are sufficient to cover the
Group's plans to complete pre-clinical development activities and
submit applications to commence clinical trials during 2023,
however, they are not sufficient to cover existing committed costs
and the costs of planned activities for at least 12 months from the
date of signing these consolidated and company financial
statements.
The Directors plan to raise further funds during 2023 (either
through licencing deals and/or equity placements) and have
reasonable expectations that sufficient cash will be raised to fund
the planned operations of the Group for a period of at least 12
months from the date of approval of these financial statements. The
funding requirement indicates that a material uncertainty exists
which may cast significant doubt over the Group's and Company's
ability to continue as a going concern, and therefore its ability
to realise its assets and discharge its liabilities in the normal
course of business.
After due consideration of these forecasts, current cash
resources, including the sensitivity of key inputs, and plans to
raise further funds, the Directors consider that the Group will
have adequate financial resources to continue in operational
existence for the foreseeable future (being a period of at least 12
months from the date of this report) and, for this reason, the
financial statements have been prepared on a going concern basis.
The financial statements do not include the adjustments that would
be required should the going concern basis of preparation no longer
be appropriate.
Principal Activities
The Company's principal activity in the reporting period was the
preclinical development of next generation medicines focused on
hard to treat cancers.
Auditors
On 1 December 2022, Jeffreys Henry LLP resigned as the Company's
auditors and confirmed that there are no circumstances connected
with their resignation which they considered should be brought to
the attention of the Company's members or creditors in accordance
with Section 519 of the Companies Act 2006.
On 16 January 2023 it was announced that the Company had
appointed BDO LLP as its auditors with immediate effect. The
appointment of BDO LLP will be subject to approval by shareholders
at the next Annual General Meeting of the Company.
Statement of Directors' responsibilities
The Directors are responsible for preparing the Annual Report
alongside the financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the financial statements in accordance with UK
adopted International Accounting Standards.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Company and of the profit or
loss of the Company for that year. The Directors are also required
to prepare financial statements in accordance with the rules of the
London Stock Exchange for companies with a Standard Listing.
In preparing these financial statements, the Directors are
required to:
-- Select suitable accounting policies and then apply them consistently;
-- Make judgments and accounting estimates that are reasonable and prudent;
-- State whether applicable UK adopted International Accounting
Standards have been followed, subject to any material departures
disclosed and explained in the financial statements; and
-- Prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements and the Remuneration Committee Report
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities. They are also responsible to make a statement
that they consider that the annual report and accounts, taken as a
whole, is fair, balanced, and understandable and provides the
information necessary for the shareholders to assess the Company's
position and performance, business model and strategy.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of the financial statements may
differ from legislation in other jurisdictions.
Statement of Directors' responsibilities pursuant to Disclosure
and Transparency Rules
Each of the Directors confirm that, to the best of their
knowledge and belief:
-- the financial statements prepared in accordance with UK
adopted International Accounting Standards, give a true and fair
view of the assets, liabilities, financial position and loss of the
Group and Company; and
-- the Annual Report and financial statements, including the
Strategic Report, includes a fair review of the development and
performance of the business and the position of the Group and
Company, together with a description of the principal risks and
uncertainties that they face.
Disclosure of Information to Auditors
So far as the Directors are aware, there is no relevant audit
information of which the Company's auditors are unaware, and each
Director has taken all the steps that they ought to have taken as a
Director in order to make themselves aware of any relevant audit
information and to establish that the Company's auditors are aware
of that information.
This directors' report was approved by the Board of Directors on
4 June 2023 and is signed on its behalf by:
Stephen West, Executive Chairman
STRATEGIC REPORT
The Directors present the Strategic Report of the Company and
the Group for the year ended 31 December 2022.
Section 172(1) Statement - Promotion of the Company for the
benefit of the members as a whole
The Directors believe they have acted in the way most likely to
promote the success of the Company for the benefit of its members
as a whole, as required by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
-- Consider the likely consequences of any decision in the long term;
-- Act fairly between the members of the Company;
-- Maintain a reputation for high standards of business conduct;
-- Consider the interests of the Company's employees;
-- Foster the Company's relationships with suppliers, customers and others; and
-- Consider the impact of the Company's operations on the community and the environment.
The Company acquired Lyramid Pty Ltd in late 2021 and then
subsequently acquired Oncogeni Limited in September 2022. The
pre-revenue nature of the business is important to the
understanding of the Company by its members and suppliers, and the
Directors are as transparent about the cash position and funding
requirements as is allowed under LSE regulations.
We aim to work responsibly with our stakeholders, including
suppliers. The key Board decisions made in the year and post year
end are set out below:
Significant events / decisions Key s172 matter(s) affected Actions and Consequences
-------------------------------------- -------------------------------------- --------------------------------------
Entering into an agreement to purchase Shareholders and Business Completion of the acquisition and
the entire issued share capital of Relationships associated Placing, with the enlarged
Oncogeni Limited share capital listed
and the associated Share Placing on the London Stock Exchange, leading
to greater likely outcomes for
shareholders in the future.
Shareholders were communicated to and
decisions made by the Directors were
notified via the
Regulatory New Service.
-------------------------------------- -------------------------------------- --------------------------------------
Interests of Employees
The Company's Corporate Governance Statement of this Annual
Report sets out (under board responsibilities) the processes in
place to safeguard the interests of employees.
Foster business relationships with suppliers, joint venture
partners and others
Potential suppliers and joint venture partners are considered in
the light of their suitability to comply with the Company's
policies.
Impact of operations on the community and environment
The Company will continue to monitor the impact of its research
facilities on the community and environment.
Maintain a reputation for high standards of business conduct
The Corporate Governance section of this Annual Report sets out
the Board and Committee structures and Board and Committee meetings
held during the year, together with the experience of executive
management and the Board and the Company's policies and
procedures.
Act fairly as between members of the Company
The Board takes feedback from a wide range of shareholders
(large and small) and endeavours at every opportunity to
pro-actively engage with all shareholders (via regulatory news
reporting-RNS) and engage with any specific shareholders in
response to particular queries they may have from time to time. The
Board considers that its key decisions during the year have
impacted equally on all members of the Company.
Review of Business in the Year
Operational Review
The Company's principal activity is set out in the Directors'
Report.
During the first nine months of the year under review the
Company was primarily focused on the pre-clinical development of
RNA oligonucleotide drugs targeting Midkine. These RNA
oligonucleotide drugs interfere with processing of the Midkine mRNA
ultimately leading to reduced active Midkine protein produced in
diseased tissues and tumours.
On 22 June 2022 the Company announced that it had entered into a
conditional sale and purchase agreement with the shareholders of
Oncogeni Limited ("Oncogeni") to acquire 100% of the total issued
equity in Oncogeni for an aggregate consideration of GBP3,750,000
to be satisfied by the issue of 50,000,000 new ordinary shares in
the Company.
Oncogeni was established in 2019 by Nobel Laureate Professor Sir
Martin Evans. It had an experienced leadership team developing
novel cell and RNA based cancer medicines, which the Board believed
were complementary to the Company's existing pre-clinical drug
development business.
To fund the future pre-clinical drug development work of
Oncogeni and the working capital requirements of the enlarged
Group, the Company also announced a placing of 7,249,998 new
ordinary shares to new and existing investors to raise funds of
GBP1.015 million.
The transaction and placing were successfully completed on 16
September 2022 with 57,249,998 new ordinary shares being issued and
admitted to the Official List of the UKLA by way of a standard
listing under Chapter 14 of the UKLA's Listing Rules and to trading
on the London Stock Exchange's main market for listed securities on
that date.
On completion of the transaction Professor Sir Martin Evans,
Ajan Reginald and Dr Darrin Disley (all directors of Oncogeni) were
appointed to the Board of the Company.
Post-acquisition of Oncogeni the Company was focused on
integrating the Oncogeni business into the existing business and
progressing development of the enlarged pre-clinical drug
portfolio.
Events since the year end
On 20 February 2023 the Company announced that it had signed an
exclusive licence and royalty agreement, for the field of medical
diagnostics only, with a leading international diagnostics company,
Randox Laboratories Ltd ("Randox"), in relation to its Midkine
antibody portfolio. Randox and Roquefort Therapeutics will now
engage in collaborative research programs to develop new cancer
diagnostics that will identify patients treatable with the
Company's Midkine therapeutics.
On 8 March 2023 the Company announced that it had successfully
developed a new novel platform of anti-cancer mRNA
therapeutics.
Financial review
Results for the year to 31 December 2022
The Consolidated Statement of Comprehensive Income for the year
shows a loss of GBP1,615,417 (2021: GBP917,433) and the
Consolidated Statement of Financial Position at 31 December 2022
shows net assets of GBP7,206,638 (2021: GBP4,082,606) for the
Group.
The total comprehensive loss for the year of GBP1,630,406 (2021:
loss of GBP916,809) occurred as a result of on-going research and
development costs, and administrative expenses required to operate
the Company, and costs in relation to the completion of the
acquisition of Oncogeni.
Administrative expenses increased to GBP1,306,561 (2021:
GBP252,392) mainly due to Directors' and employee costs increasing
to GBP365,564 (2021: GBP59,607), consulting and professional fees
increasing to GBP209,768 (2021: GBP125,807), the audit fee
increasing to GBP157,336 (2021: GBP22,000) and other expenditure
(excluding audit fees) increasing to GBP527,520 (2021: GBP13,818) -
reflecting an increase in staff and operational activities during
the year. Research and development expenditure increased to
GBP319,315 (2021: GBP698) as the Group carried out external studies
with Murdoch University for the Midkine RNA oligonucleotide
pre-clinical program in the first half of the year and commenced
internal and external studies on the other programs later in the
year.
The intangible assets of the Group increased to GBP5,343,506
(2021: GBP1,481,530) as a result of accounting for the fair value
of shares issued for the acquisition of Oncogeni Limited (Refer to
note 12).
Other receivables reduced significantly to GBP45,154 (2021:
GBP2,135,031) due to the receipt of outstanding placing proceeds of
GBP2,106,202 in January 2022.
Cash flow
Net cash inflow for the Group for 2022 was GBP1,421,258 (2021:
GBP900,335).
Net cash used in investing activities for 2022 decreased to
GBP122,468 (2021: GBP606,226) reflecting the acquisition of
Oncogeni Limited in 2022 for equity consideration and associated
costs, compared with the acquisition of Lyramid Pty Ltd in 2021 for
a mixture of cash consideration, equity consideration and
associated costs.
Net flows from financing activities for 2022 was GBP3,121,202
reflecting the receipt of proceeds from an equity placement
undertaken in December 2021 of GBP2,106,202 and an equity placement
in September 2022 raising GBP1,014,999. This compares to the net
flows from financing activities for 2021 of GBP2,023,393
reflecting, after costs of GBP159,405, pre-IPO equity placements in
2020 raising GBP124,000, the IPO equity placement in March 2021
raising GBP1,000,000, the exercise of broker warrants for
GBP15,000, an equity placement in August 2021 raising GBP150,000
and an equity placement in December 2021 raising GBP3,000,000 (less
proceeds outstanding and received in early 2022 of
GBP2,106,202).
Closing cash
As at 31 December 2022, the Group held GBP2,322,974 (2021:
GBP899,721) of cash.
Key Performance Indicators
The Company's non-financial KPIs are the development of new
novel anti-cancer therapeutics, the registration of new patents to
protect the clinical advancements in anti-cancer therapeutics being
achieved during the pre-clinical stages of drug discovery and
entering into licencing deals with other companies.
The Company's financial KPIs are the Company's cash runway and
budgeted R&D spend compared to actuals.
Position of Company's Business
At the year end
At the year end the Company's Statement of Financial Position
shows net assets totalling GBP7,481,382 (2021: GBP4,014,683). The
Company's current cash resources are sufficient to cover the
Company's plans to complete pre-clinical development activities and
submit applications to commence clinical trials for all of the
Company's pre-clinical programs. However, the ability of the
Company to continue as a going concern, for at least 12 months from
the date of signing this Annual Report, is dependent upon the
completion of licencing deals that include upfront consideration
and/or the successful future raising of further capital, which the
Directors are confident of achieving. There can be no assurance
that these plans will be successful and so there is a material
uncertainty over the Company's ability to continue as a going
concern.
Environmental matters
The Board contains personnel with a good history of running
businesses that have been compliant with all relevant laws and
regulations and there have been no instances of non-compliance in
respect of environmental matters.
Employee information
As at the date of this report, the Company has an Executive
Chairman, two Executive Directors and four Non-Executive Directors.
The Company is committed to gender equality and, as future roles
are identified, a wide-ranging search would be completed with the
most appropriate individual being appointed irrespective of
gender.
A split of our employees and directors by gender at the date of
this report, is shown below:
Male Female
Directors 6 1
Employees - 2
Total employees (including directors) 6 3
Social/Community/Human rights matters
The Company ensures that employment practices take into account
the necessary diversity requirements and compliance with all
employment laws. The Board has experience in dealing with such
issues and sufficient training and qualifications to ensure they
meet all requirements.
Anti-corruption and anti-bribery policy
The government of the United Kingdom has issued guidelines
setting out appropriate procedures for companies to follow to
ensure that they are compliant with the UK Bribery Act 2010. The
Company has conducted a review into its operational procedures to
consider the impact of the Bribery Act 2010 and the Board has
adopted an anti-corruption and anti-bribery policy.
Principal Risks and Uncertainties
The Group operates in an uncertain environment and is subject to
a number of risk factors. The Directors consider the following risk
factors are of particular relevance to the Group's activities
although it should be noted that this list is not exhaustive and
that other risk factors not presently known or currently deemed
immaterial may apply.
Issue Risk/Uncertainty Mitigation
The Group is a pre-revenue The generation of revenues The Directors have
business and there is dif fi cult to predict appointed a CEO to
is no guarantee that and there is no guarantee actively manage the
it will generate significant that the Group will commercial activities
or any revenue in the generate signi fi cant of the Group as it
near future or any revenues in develops.
the foreseeable future. The CEO and the Directors
The Group will face will oversee the progress
risks frequently encountered of the development
by pre-revenue businesses of the Group's research
looking to bring new programs and associated
products and devices technologies and will
to the market. There ensure funding is in
is also no guarantee place to support the
that the intellectual necessary trials and
property held will further development
ultimately result in steps as these come
a commercially viable on stream.
product. It is also
possible that technical
and/or regulatory hurdles
could lengthen the
time required for the
delivery of such a
testing product.
The Group's future
growth will also depend
on its ability to secure
commercialisation partnerships
on appropriate terms,
to manage growth and
to expand and improve
operational, fi nancial
and management information,
quality control systems
and its commercialisation
function on a timely
basis, whilst at the
same time maintaining
effective cost controls.
--------------------------------- ---------------------------------
Research and development All therapeutic research The Directors will
risks carry technical and development programs engage in continuous
risks, including the carry technical risks, dialogue with the Chief
programs undertaken including the programs Scienti fi c Of fi
by the Group and there undertaken by the Group. cer to critically review
is no guarantee that These risks include: the technical risks.
these technical risks those associated with The Board has established
can be effectively delays in development a Scientific Advisory
overcome, and a successful, of effective and potent Board to support them
approved product can drugs; failure of delivery in this review process.
be developed by third party suppliers
of research services
or materials essential
to the programs; and
outcomes of clinical
testing. There is no
guarantee that these
technical risks can
be effectively overcome,
and a successful, approved
product can be developed.
Furthermore, the Group
is pursuing relatively
new drug classes. Whilst
several examples of
approved drugs now
exist in these classes,
as yet no such drug
has been developed
for the Group's targets.
There is a risk that
these novel classes
of drugs may not be
an effective way of
modulating the target's
expression to exert
appropriate clinical
bene fi t in the target
conditions.
--------------------------------- ---------------------------------
Biotechnology programs Biotechnology programs The Scientific Advisory
are subject to the are subject to the Board will be critical
most stringent regulatory most stringent regulatory in supporting the Board
oversight by various oversight by various in understanding and
government agencies government agencies mitigating these risks.
and ethics committees and ethics committees. Even so, a sudden unforeseen
and there is no guarantee Key regulatory focus change in the regulations
that the proposed development areas are safety and could have a material
work will result in ef fi cacy, and future adverse impact on the
an efficacious treatment, clinical trials conducted development program.
or even if it does, by the Group may be The Group cannot guarantee
that the drug will suspended or abandoned that the proposed development
be approved by regulatory entirely in the event work will result in
authorities that regulatory agencies an ef fi cacious treatment,
consider that continuation or even if it does,
of these trials could that the drug will
expose participants be approved by regulatory
to undue risks. Before authorities.
obtaining regulatory
approval of a product
for a target indication,
substantial evidence
must be gathered in
controlled clinical
trials that the product
candidate is safe and
effective for use for
that clinical setting.
Similar approvals must
be obtained from the
relevant regulatory
authorities in each
country in which the
product may be made
available, including
Australia, US and the
EU.
--------------------------------- ---------------------------------
Even where the Group There may be other During 2022, the Board
is successful in terms companies developing appointed new Directors,
of technical and regulatory effective treatments senior management and
approvals, there is for the same conditions advisors with appropriate
no guarantee it will as the Group, which experience and expertise
be successful in securing could make commercialising to give the Group the
an appropriate licensing any drug more dif fi best chance of commercialising
deal or in achieving cult. The research any successful drug
alternative means of and development programs in the future.
commercialising its planned are expected
drugs to take several years
before any drug might
be ready and the market
for such drugs may
contract signi fi cantly
or become too competitive
for an economically
viable drug launch.
In addition, even post
regulatory approval,
any drug may need to
be withdrawn from the
market, as well as
expose the Group to
claims for compensation
as a result of serious
adverse events associated
with the treatment.
Historically, very
few drugs make it from
discovery to regulatory
approval and commercialisation.
--------------------------------- ---------------------------------
Existing patents and The Group's subsidiary The CEO has a good
licences are subject Lyramid Pty Ltd operates understanding of the
to the terms and conditions its Midkine antibody details of the licence
of the relevant licence research and development agreements and the
agreement which could programs under a worldwide, Group's obligations
be terminated for non-compliance licence agreement with under them. Should
with the terms of such Anagenics Ltd, the any areas of concern
licence agreement owner of the Midkine arise, legal counsel
patents. Similarly, will be sought before
the Group's subsidiary further steps are taken.
Oncogeni Ltd operates
its MK Cell and siRNA
programs under worldwide
licencing agreements
with Cell Therapy Limited
and Sirna Limited respectively.
Whilst the Group is
currently compliant,
there is a risk that
the rights to these
patents, as de fi ned
by the relevant licence
agreement, will be
forfeited by virtue
of either party failing
to meet licence conditions.
--------------------------------- ---------------------------------
The Group's ability The Group's ability The Group seeks to
to compete will depend to compete will depend protect its intellectual
in part, upon the successful in part, upon the successful property through the
protection of its intellectual protection of its intellectual fi ling of patent applications,
property, in particular property, in particular as well as robust con
its patents and know-how its Patents Rights fi dentiality obligations
and Know-How. Filing, on its employees.
prosecuting and defending The Board intends to
patents in all countries defend the Group's
throughout the world intellectual property
would be prohibitively vigorously, where necessary
expensive. It is possible through litigation
that competitors will and other means.
use the technologies
in jurisdictions where
the Group has not registered
patents.
Any such claims are
likely to be expensive
to defend, and the
other litigating parties
may be able to sustain
the costs of complex
patent litigation more
effectively than the
Group can, because
they have substantially
greater resources.
Moreover, even if the
Group is successful
in defending any infringement
proceedings, it may
incur substantial costs
and divert management's
time and attention
in doing so, which
may have a material
adverse effect on the
Group's business, fi
nancial condition,
capital resources,
results and/or future
operations. Further,
disputes can often
last for a number of
years, and can be subject
to lengthy appeals
processes before any
fi nal resolution is
achieved through the
various different courts
and/or tribunals. Furthermore,
it cannot be guaranteed
that a court will not
rule against the Group
were such claims to
be defended.
Despite these precautions
that may be taken by
the Group to protect
its intellectual technology
and products, unauthorised
third parties may attempt
to copy, or obtain
and use its technology
and products. A third
party may infringe
upon the Group's intellectual
property, release information
considered confidential
about the Group's intellectual
property and/or claim
technology that is
registered to the Group.
In addition, the Group
may fail to discover
infringement of its
intellectual property,
and/or any steps taken
or that will be taken
by it may not be sufficient
to protect its intellectual
property rights or
prevent others from
seeking to invalidate
its intellectual property
(for example, in response
to a claim for infringement
or where an attempt
is made to "clear a
path" for a new competing
product) or block sales
of its products by
alleging a breach of
their intellectual
property. Third parties
can bring material
and arguments which
the patent office granting
the patent may not
have seen at the time
of granting the patent.
Therefore, whilst a
patent may be granted
to the Group it could
in the future be found
by a court of law or
by a patent office
to be invalid or unenforceable
or in need of further
restriction. As a result
of a validity challenge,
a patent may be amended
so as to narrow its
scope to an extent
that it may be more
difficult to restrict
activities of competitors.
Applications filed
by the Group in respect
of new patents and
trademarks may also
not be granted or,
if granted, may still
be subject to opposition.
In addition, there
can be no guarantee
that the patents or
trademarks will be
granted on a timely
basis. Subject to certain
time limits, there
may, in certain circumstances,
also be claims to entitlement,
and/or compensation
arising from contributions
made, to granted patents
by those who have assisted
with the relevant research
or project.
In the event that litigation
is necessary in the
future in order to
enforce the Group's
intellectual property
rights, determine the
scope and validity
of proprietary rights
of other companies,
and/or defend claims
of infringement or
invalidity, it could
require the Group to
commit signi fi cant
resource to pursue
the protection of its
intellectual property
and there is no guarantee
that the result of
such litigation would
result in a favourable
outcome to the Group,
or the damages or other
remedies awarded, if
any, may not be commercially
meaningful or represent
acceptable compensation
in respect to the infringement.
The Group is not currently
aware of any such active
or pending litigation
risk.
--------------------------------- ---------------------------------
Competition and the The Group operates The Board will be monitoring
pace of development within the biotechnology the speed and output
in the biotechnology sector, a complex area of the programs closely
sector could lead to of the healthcare industry. and challenging where
the market participants Rapid scienti fi c it believes things
creating and technological change could be done more
approaches, products within the biotechnology quickly.
and services equivalent sector could lead to The Board is aware
or superior to the other market participants of the potential need
diagnostic testing creating approaches, for further funding
products and services products and services as the programs develop.
than those to be offered equivalent or superior Being a listed company
by the Group to the diagnostic testing gives the Group the
products and services ability to raise more
than those to be offered funds in the future
by the Group, which should they be required.
could adversely affect
the Group's performance
and success. Better
resourced competitors
may be able to devote
more time and capital
towards the research
and development process,
which, in turn, could
lead to scienti fi
c and/or technological
breakthroughs that
may materially alter
the outlook or focus
for markets in which
the Group will operate.
If the Group is unable
to keep pace with the
changes in the biotechnology
sector and in the wider
healthcare industry,
the demand for its
platforms and associated
products and services
could fall, which may
have a material adverse
effect on the Group's
business, fi nancial
condition, capital
resources, results
and/or future operations.
In addition, certain
of the Group's competitors
may have signi fi cantly
greater fi nancial
and human resource
capacity and, as such,
better manufacturing
capability or sales
and marketing expertise.
New companies with
alternative technologies
and products may also
emerge.
--------------------------------- ---------------------------------
The successful operation The successful operation The Group offers incentives
of the Group will depend of the Group will depend to Directors and employees
partly upon the performance partly upon the performance through share warrants,
and expertise of its and expertise of its which makes them linked
current and future current and future to the long-term success
management and employees management and employees. of the business.
The loss of the services
of certain of these
members of the Group's
key management, including
Ajan Reginald, the
CEO, Professor Sir
Martin Evans, the Chief
Scientific Officer,
and Dr Graham Robertson,
the Vice President
of Drug Discovery or
the inability to identify,
attract and retain
a sufficient number
of suitably skilled
and qualified employees
may have a material
adverse effect on the
Group. Any future expansion
of the Group may require
considerable management
time which may in turn
inhibit management's
ability to conduct
the day to day business
of the Group.
--------------------------------- ---------------------------------
Composition of the Board
A full analysis of the Board, its function, composition and
policies, is included in the Governance Report.
Capital structure
The Company's capital consists of ordinary shares which rank
pari passu in all respects which are traded on the Standard segment
of the Main Market of the London Stock Exchange. There are no
restrictions on the transfer of securities in the Company or
restrictions on voting rights and none of the Company's shares are
owned or controlled by employee share schemes. There are no
arrangements in place between shareholders that are known to the
Company that may restrict voting rights, restrict the transfer of
securities, result in the appointment or replacement of Directors,
amend the Company's Articles of Association or restrict the powers
of the Company's Directors, including in relation to the issuing or
buying back by the Company of its shares or any significant
agreements to which the Company is a party that take effect after
or terminate upon, a change of control of the Company following a
takeover bid or arrangements between the Company and its Directors
or employees providing for compensation for loss of office or
employment (whether through resignation, purported redundancy or
otherwise) that may occur because of a takeover bid.
Approved by the Board on 4 June 2023
Stephen West, Executive Chairman
Consolidated Statement of Comprehensive Income
Year ended Period ended
31 December 31 December 2021
2022
Note
Revenue 7 - 719
Other income - 130
Cost of goods sold - (10,069)
Administrative expenses 9 (1,306,561) (252,392)
Costs associated with the IPO 9 - (182,053)
Share based payments - directors and senior managers 9 (8,427) (248,326)
Costs associated with acquisition of subsidiary 9 - (224,744)
Research and development expenditure 9 (319,315) (698)
Operating loss & loss before taxation (1,634,303) (917,433)
Taxation 10 18,886 -
Loss for the period (1,615,417) (917,433)
Other comprehensive (loss) income 8 (14,989) 624
------------- ------------------
Total comprehensive loss for the period attributable to equity
holders of the parent (1,630,406) (916,809)
------------- ------------------
Loss per share (basic and diluted) attributable to the equity holders
(pence) 11 (1.56) (3.71)
The notes to the financial statements form an integral part of
these financial statements.
Consolidated Statement of Financial Position
As at Restated As
31 December at 31 December
2022 2021
Note GBP GBP
Assets
Non-current assets
Intangible assets 12 5,343,505 1,481,530
------------- ----------------
Total non-current assets 5,343,505 1,481,530
Current assets
Trade and other receivables 14 101,738 2,178,783
------------- ----------------
Cash and cash equivalents 15 2,322,974 899,721
------------- ----------------
Total current assets 2,424,712 3,078,504
------------- ----------------
Total assets 7,768,217 4,560,034
============= ================
Equity and liabilities
Equity attributable to shareholders
Share capital 18 1,291,500 719,000
Share premium 18 4,403,094 3,460,595
Share based payments reserve 19 375,135 366,708
Merger relief reserve (1) 20 3,700,000 450,000
------------- ----------------
Retained deficit (2,548,728) (914,321)
------------- ----------------
Currency translation reserve (14,365) 624
------------- ----------------
Total equity 7,206,636 4,082,606
Liabilities
Non-Current liabilities
Deferred tax liabilities 17 281,911 281,911
Current liabilities
------------- ----------------
Trade and other payables 16 279,670 195,517
------------- ----------------
Total liabilities 561,581 477,428
------------- ----------------
Total equity and liabilities 7,768,217 4,560,034
------------- ----------------
(1) In the prior period Merger relief reserve was not applied
for the consideration shares issued for the acquisition of Lyramid,
in error. GBP450,000 previously recorded as share premium has been
reclassified into a merger relief reserve in accordance with the UK
Companies Act. There has been no impact to the prior period's
consolidated statement of comprehensive income or net asset
position.
The notes to the financial statements form an integral part of
these financial statements.
Statement of Financial Position
As at 31 Restated As at 31 December
December 2021
2022 GBP
Note GBP
Assets
Non-current assets
Investments 13 4,874,774 1,015,695
------------ ---------------------------
Intercompany receivables 451,622 132,800
------------ ---------------------------
Total non-current assets 5,326,396 1,148,495
Current assets
Trade and other receivables 14 64,309 2,136,224
------------ ---------------------------
Cash and cash equivalents 15 2,274,478 857,614
------------ ---------------------------
Total current assets 2,338,787 2,993,838
------------ ---------------------------
Total assets 7,665,183 4,142,333
============ ===========================
Equity and liabilities
Equity attributable to shareholders
Share capital 18 1,291,500 719,000
Share premium 18 4,403,094 3,460,595
Share based payments reserve 19 375,135 366,708
------------ ---------------------------
Merger relief reserve (1) 20 3,700,000 450,000
------------ ---------------------------
Retained deficit (2,288,350) (981,620)
------------ ---------------------------
Total equity 7,481,379 4,014,683
Liabilities
Current liabilities
------------ ---------------------------
Trade and other payables 16 183,804 127,650
------------ ---------------------------
Total liabilities 183,804 127,650
------------ ---------------------------
Total equity and liabilities 7,665,183 4,142,333
============ ===========================
1- In the prior period Merger relief reserve was not applied for
the consideration shares issued for the acquisition of Lyramid, in
error. GBP450,000 previously recorded as share premium has been
reclassified into a merger relief reserve in accordance with the UK
Companies Act. There has been no impact to the prior period's
consolidated statement of comprehensive income or net asset
position.
The notes to the financial statements form an integral part of
these financial statements.
Consolidated Statement of Changes in Equity
Share
Ordinary Based Merger
Share Share Payment relief Retained Translation Total
capital Premium Reserve reserve earnings Reserve equity
GBP GBP GBP GBP GBP GBP GBP
On
Incorporation - - - - 3,112 - 3,112
--------------- ----------- ---------------- ------------ ---------- ------------- -------------- --------------------
Loss for the
period - - - - (917,433) - (917,433)
--------------- ----------- ---------------- ------------ ---------- ------------- -------------- --------------------
Exchange
differences - - - - - 624 624
--------------- ----------- ---------------- ------------ ---------- ------------- -------------- --------------------
Total
comprehensive
income /
(loss)
for the
period - - - - (914,321) 624 (913,697)
----------- ---------------- ------------ ---------- ------------- -------------- --------------------
Transactions
with owners
Ordinary
Shares
issued
(restated)
(1) 719,000 3,620,000 - 450,000 - - 4,789,000
--------------- ----------- ---------------- ------------ ---------- ------------- -------------- --------------------
Share issue
costs - (159,405) - - - - (159,405)
Warrants
charge - - 366,708 - - - 366,708
----------- ---------------- ------------ ---------- ------------- -------------- --------------------
Total
transactions
with owners
(restated) 719,000 3,460,595 366,708 450,000 - - 4,996,303
----------- ---------------- ------------ ---------- ------------- -------------- --------------------
As at 31
December
2021
(restated) 719,000 3,460,595 366,708 450,000 (914,321) 624 4,082,606
--------------- =========== ================ ============ ========== ============= ============== ====================
Loss for the
period - - - - (1,615,417) - (1,615,417)
--------------- ----------- ---------------- ------------ ---------- ------------- -------------- --------------------
Exchange
differences - - - - - (14,989) (14,989)
--------------- ----------- ---------------- ------------ ---------- ------------- -------------- --------------------
Total
comprehensive
income /
(loss)
for the year - - - (1,615,417) (14,989) (1,630,406)
--------------- ----------- ---------------- ------------ ---------- ------------- -------------- --------------------
Transactions
with owners
Ordinary
shares
issued 572,500 942,499 - 3,250,000 - - 4,764,999
--------------- ----------- ---------------- ------------ ---------- ------------- -------------- --------------------
Stamp duty on
share issue (18,990) (18,990)
--------------- ----------- ---------------- ------------ ---------- ------------- -------------- --------------------
Warrants
charge - - 8,427 - - - 8,427
--------------- ----------- ---------------- ------------ ---------- ------------- -------------- --------------------
Total
transactions
with owners 572,500 942,499 8,427 3,250,000 (18,990) - 4,754,436
--------------- ----------- ---------------- ------------ ---------- ------------- -------------- --------------------
As at 31
December
2022 1,291,500 4,403,094 375,135 3,700,000 (2,548,728) (14,365) 7,206,636
--------------- =========== ================ ============ ========== ============= ============== ====================
(1) In the prior period Merger relief reserve was not applied
for the consideration shares issued for the acquisition of Lyramid,
in error. GBP450,000 previously recorded as share premium has been
reclassified into a merger relief reserve in accordance with the UK
Companies Act. There has been no impact to the prior period's
consolidated statement of comprehensive income or net asset
position.
The notes to the financial statements form an integral part of
these financial statements.
Statement of Changes in Equity
Merger Share
Ordinary relief Based Retained Total
Share Share reserve Payment earnings equity
capital Premium Reserves
GBP GBP GBP GBP GBP GBP
On Incorporation - - - - -
----------------------- ----------- -------------- ------------ ------------- ------------ ---------------------
Loss for the
period - - - (981,620) (981,620)
----------------------- ----------- -------------- ------------ ------------- ------------ ---------------------
Total comprehensive
loss for the
period - - - (981,620) (981,620)
----------- -------------- ------------ ------------- ------------ ---------------------
Transactions
with owners
Ordinary Shares
issued (restated)(1) 719,000 3,620,000 450,000 - - 4,789,000
Share issue
costs - (159,405) - - - (159,405)
Warrants issued - - - 366,708 - 366,708
Total transactions
with owners
(restated) 719,000 3,460,595 450,000 366,708 - 4,996,303
----------------------- ----------- -------------- ------------ ------------- ------------ ---------------------
As at 31
December 2021
(restated) 719,000 3,460,595 450,000 366,708 (981,620) 4,014,683
----------------------- =========== ============== ============ ============= ============ =====================
Loss for the
year - - - - (1,287,740) (1,287,740)
----------------------- ----------- -------------- ------------ ------------- ------------ ---------------------
Total loss
for the year - - - - (1,287,740) (1,287,740)
----------------------- ----------- -------------- ------------ ------------- ------------ ---------------------
Transactions
with owners
Ordinary Shares
issued 572,500 942,499 3,250,000 - - 4,764,999
----------------------- ----------- -------------- ------------ ------------- ------------ ---------------------
Stamp duty
on share issue (18,990) (18,990)
----------------------- ----------- -------------- ------------ ------------- ------------ ---------------------
Warrants issued - - - 8,427 - 8,427
----------------------- ----------- -------------- ------------ ------------- ------------ ---------------------
Total transactions
with owners 572,500 942,499 3,250,000 8,427 (18,990) 4,754,436
----------------------- ----------- -------------- ------------ ------------- ------------ ---------------------
As at 31
December 2022 1,291,500 4,403,094 3,700,000 375,135 (2,288,350) 7,481,379
----------------------- =========== ============== ============ ============= ============ =====================
(1) In the prior period Merger relief reserve was not applied
for the consideration shares issued for the acquisition of Lyramid,
in error. GBP450,000 previously recorded as share premium has been
reclassified into a merger relief reserve in accordance with the UK
Companies Act. There has been no impact to the prior period's
consolidated statement of comprehensive income or net asset
position.
The notes to the financial statements form an integral part of
these financial statements.
Consolidated Statement of Cash Flow
Year ended 31 Restated Period
December 2022 ended 31 December
Note 2021
GBP GBP
Cash flow from operating
activities
Loss before income tax (1,634,303) (996,068)
Adjustments for:
Amortisation - -
Foreign Exchange (9,918) 765
Non-cash adjustment - (2,602)
Share based payment 19 8,427 366,708
Taxation 18,886 -
Changes in working capital:
Increase in trade and other
receivables(2) (20,318) (24,434)
Increase in trade and other
payables 59,750 129,525
--------------- -------------------------
Decrease in Inventory - 9,273
--------------- -------------------------
Net cash used in operating
activities (1,577,476) (516,833)
Cash flow from Investing
activities
Acquisition of subsidiary,
net of cash acquired(1) (103,478) (606,226)
--------------- -------------------------
Net Cash used in investing
activities (103,478) (606,226)
Cash flows from financing
activities
Proceeds from the issue of
ordinary shares (1,2) 18 3,121,202 2,182,798
Share issue costs 18 (18,990) (159,405)
--------------- -------------------------
Net cash from financing activities 3,102,212 2,023,393
Net increase in cash and
cash equivalents 1,421,258 900,335
Cash and cash equivalents
at the beginning of the period 899,721 -
Foreign exchange impact on
cash 1,995 (614)
--------------- -------------------------
Cash and cash equivalents
at the end of the period 15 2,322,974 899,721
=============== =========================
(1) An error was identified in the prior year's cash flow
statement. The error pertains to GBP500,000 of consideration shares
issued for the acquisition of Lyramid Pty Ltd, with no cashflow,
that was incorrectly included in these line items. This was
incorrectly considered as cash inflow from 'Proceeds from the issue
of ordinary shares' and cash outflow for 'Acquisition of
subsidiary, net of cash acquired'. There is no impact on the
company and consolidated statement of comprehensive income or
statement of financial position.
(2) An error was identified in the prior year's cash flow
statement. The error pertains to GBP2,106,202 of proceeds from
share issues which was recorded in 2021 but not received until
after period end. As a result, the Group has restated the cash flow
from 'Proceeds from the issue of ordinary shares' and 'Increase in
trade and other receivables'. The impact of the correction on the
prior year's financial results is a decrease in the cash used in
operating activities of GBP2,106,202 and a decrease in cash from
financing activities for the same amount. There is no impact on the
consolidated and company statements of comprehensive income or
statements of financial position.
Statement of Cash Flow
Year ended 31 Unaudited period
December 2022 ended 31 December
Note 2021 (1)
GBP GBP
Cash flow from operating
activities
Loss before income tax (1,287,740) (981,620)
Adjustments for:
Non-cash adjustment
Share based payment 19 8,427 366,708
Changes in working capital:
Increase in trade and other
receivables (34,288) (30,222)
Increase in trade and other
payables 56,153 127,649
--------------- -------------------
Net cash used in operating
activities (1,257,448) (517,485)
Cash flow from Investing
activities
--------------- -------------------
Acquisition of subsidiary (109,079) (648,496)
--------------- -------------------
Borrowings to subsidiaries (318,822) -
--------------- -------------------
Net Cash used in investing
activities (427,901) (648,496)
Cash flows from financing
activities
Proceeds from the issue of
ordinary shares 18 3,121,202 2,183,000
Share issue costs 18 (18,990) (159,405)
--------------- -------------------
Net Cash from financing activities 3,102,212 2,023,595
Net increase in cash and
cash equivalents 1,416,863 857,614
Cash and cash equivalents
at the beginning of the period 857,614 -
Foreign exchange impact on
cash - -
--------------- -------------------
Cash and cash equivalents
at the end of the period 15 2,274,477 857,614
=============== ===================
(1) The Company Statement of Cashflow was incorrectly excluded
from the 2021 Annual Report and as such the 2021 comparative
amounts presented above have not been audited .
The notes to the financial statements form an integral part of
these financial statements.
Notes to the Financial Statements
1. General Information
Roquefort Therapeutics plc, the Group's ultimate parent company,
was incorporated on 17 August 2020 as a public company in England
and Wales with company number 12819145 under the Companies Act.
The address of its registered office is 85 Great Portland
Street, First Floor, London W1W 7LT, United Kingdom.
The principal activity of the Company is to develop pre-clinical
next generation medicines focused on hard to treat cancers.
The Company listed on the London Stock Exchange ("LSE") on 22
March 2021.
The consolidated financial statements of the Group have been
prepared in accordance with UK adopted International Accounting
Standards as issued by the UK Accounting Standards Board (ASB).
They have been prepared under the assumption that the Group
operates on a going concern basis.
The financial information set out in this announcement does not
constitute the Group's statutory accounts for the year ended 31
December 2022 or 31 December 2021. The auditors reported on those
accounts and their report (i) was unqualified; (ii) included
references to the following two matters to which the auditors drew
attention by way of emphasis without qualifying their report -
material uncertainty over going concern, as disclosed by the
Directors in note 3b; and that the Parent Company statement of
cashflow for the year ended 31 December 2021 is unaudited; and
(iii) did not contain statements under section 498 (2) or (3) of
the Companies Act 2006. The statutory accounts for the year ended
31 December 2022 have not yet been delivered to the Registrar of
Companies.
2. New Standards and Interpretations
New and revised accounting standards adopted for the year ended
31 December 2022 did not have any material impact on the Group's
accounting policies. There are a number of standards, amendments to
standards, and interpretations which have been issued by the IASB
that are effective in future accounting periods that the Group has
decided not to adopt early. The following amendments are effective
for the period beginning 1 January 2023:
- Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);
- Definition of Accounting Estimates (Amendments to IAS 8); and
- Deferred Tax Related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12).
The following amendments are effective for the period beginning
1 January 2024:
- FRS 16 Leases (Amendment - Liability in a Sale and Leaseback);
- IAS 1 Presentation of Financial Statements (Amendment -
Classification of Liabilities as Current or Non-current); and
- IAS 1 Presentation of Financial Statements (Amendment -
Non-current Liabilities with Covenants)
The Group is currently assessing the impact of these new
accounting standards and amendments. The Group does not believe
that the amendments to IAS 1 will have a significant impact on the
classification of its liabilities. The Group does not expect any
other standards issued by the IASB, but not yet effective, to have
a material impact on the Group.
3. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all the period presented, unless
otherwise stated.
a) Basis of Preparation
The financial statements of Roquefort Therapeutics plc have been
prepared in accordance with UK adopted International Accounting
Standards, and the Companies Act 2006.
The financial statements have been prepared on an accrual basis
and under the historical cost convention.
b) Going Concern
The Directors have prepared financial forecasts to estimate the
likely cash requirements of the Group over the period to 30 June
2024, given its stage of development and lack of recurring
revenues. In preparing these financial forecasts, the Directors
have made certain assumptions with regards to the timing and amount
of future expenditure over which they have control. The Directors
have considered the sensitivity of the financial forecasts to
changes in key assumptions, including, among others, potential cost
overruns within committed spend and changes in exchange rates.
The Group's available resources are sufficient to cover the
Group's plans to complete pre-clinical development activities and
submit applications to commence clinical trials during 2023,
however, they are not sufficient to cover existing committed costs
and the costs of planned activities for at least 12 months from the
date of signing these consolidated and company financial
statements.
The Directors plan to raise further funds during 2023 (either
through licencing deals and/or equity placements) and have
reasonable expectations that sufficient cash will be raised to fund
the planned operations of the Group for a period of at least 12
months from the date of approval of these financial statements. The
funding requirement indicates that a material uncertainty exists
which may cast significant doubt over the Group's and Company's
ability to continue as a going concern, and therefore its ability
to realise its assets and discharge its liabilities in the normal
course of business.
After due consideration of these forecasts, current cash
resources, including the sensitivity of key inputs, and plans to
raise further funds, the Directors consider that the Group will
have adequate financial resources to continue in operational
existence for the foreseeable future (being a period of at least 12
months from the date of this report) and, for this reason, the
financial statements have been prepared on a going concern basis.
The financial statements do not include the adjustments that would
be required should the going concern basis of preparation no longer
be appropriate.
c) Basis of Consolidation
The Group's financial statements consolidate those of the parent
company and its subsidiaries as of 31 December 2022. Lyramid and
Oncogeni have a reporting date at 31 December and 31 May
respectively.
All transactions and balances between Group companies are
eliminated on consolidation, including unrealised gains and losses
on transactions between Group companies. Where unrealised losses on
intra-group asset sales are reversed on consolidation, the
underlying asset is also tested for impairment from a Group
perspective. Amounts reported in the financial statements of its
subsidiary have been adjusted where necessary to ensure consistency
with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries
acquired or disposed of during the year are recognised from the
effective date of acquisition, or up to the effective date of
disposal, as applicable.
The Group attributes total comprehensive income or loss of
subsidiaries between the owners of the parent and the
non-controlling interests based on their respective ownership
interests.
d) Business combinations
The Group applies the acquisition method in accounting for
business combinations. The consideration transferred by the Group
to obtain control of a subsidiary is calculated as the sum of the
acquisition-date fair values of assets transferred, liabilities
incurred and the equity interests issued by the Group, which
includes the fair value of any asset or liability arising from a
contingent consideration arrangement. Acquisition costs are
expensed as incurred.
Assets acquired and liabilities assumed are generally measured
at their acquisition-date fair values.
e) Foreign Currency Translation
i) Functional and Presentation Currency
The financial statements are presented in Pounds Sterling (GBP),
which is the Group's functional and presentation currency.
ii) Transactions and Balances
Foreign currency monetary assets and liabilities are translated
at the rates ruling at the reporting date. Exchange differences
arising on the retranslation of assets and liabilities are
recognised immediately in profit or loss.
iii) Foreign operations
In the Group's financial statements, all assets, liabilities and
transactions of Group entities with a functional currency other
than GBP are translated into GBP upon consolidation. The functional
currencies of entities within the Group have remained unchanged
during the reporting period.
On consolidation, assets and liabilities have been translated
into GBP at the closing rate at the reporting date. Goodwill and
fair value adjustments arising on the acquisition of a foreign
entity have been treated as assets and liabilities of the foreign
entity and translated into GBP at the closing rate on the
acquisition date. Income and expenses have been translated into GBP
at the average rate of over the reporting period. Exchange
differences are charged or credited to other comprehensive income
and recognised in the currency translation reserve in equity. On
disposal of a foreign operation, the related cumulative translation
differences recognised in equity are reclassified to profit or loss
and are recognised as part of the gain or loss on disposal.
f) Segment Reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-makers.
The chief operating decision-makers, who are responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the executive Board of
Directors.
All operations and information are reviewed together so that at
present there is only one reportable operating segment.
In the opinion of the Directors, during the period the Group
operated in the single business segment of biotechnology.
g) Goodwill and Intangible assets
Goodwill represents the future economic benefits arising from a
business combination that are not individually identified and
separately recognised. Goodwill is carried at cost less accumulated
impairment losses. Refer to Note (h) for a description of
impairment testing procedures.
Transactions where the definition of a business combination, per
IFRS 3, is not met due to the asset or group of assets not meeting
the definition of a business, or where the concentration test
affords the Directors the option not to treat as a business, are
recognised as an asset acquisition. The Group identifies and
recognises the individual identifiable assets acquired and
liabilities assumed and allocates the cost of the group of assets
and liabilities (including directly attributable costs of making
the acquisition) to the individual identifiable assets and
liabilities on the basis of their relative fair values at the date
of purchase.
Other intangible assets, including licences and patents, that
are acquired by the Group and have finite useful lives are measured
at cost less accumulated amortisation and any accumulated
impairment losses. Refer to Note (h) for amortisation
procedures.
h) Impairment testing of goodwill, other intangible assets and property, plant and equipment
For impairment assessment purposes, assets are grouped at the
lowest levels for which there are largely independent cash inflows
(cash-generating units). As a result, some assets are tested
individually for impairment, and some are tested at cash-generating
unit level. Goodwill is allocated to those cash-generating units
that are expected to benefit from synergies of a related business
combination and represent the lowest level within the Group at
which management monitors goodwill.
Cash-generating units to which goodwill has been allocated are
tested for impairment at least annually. All other individual
assets or cash-generating units are tested for impairment whenever
events or changes in circumstances indicate that the carrying
amount may not be recoverable.
An impairment loss is recognised for the amount by which the
asset's (or cash-generating unit's) carrying amount exceeds its
recoverable amount, which is the higher of fair value less costs of
disposal and value-in-use. To determine the value-in-use,
management estimates expected future cash flows from each
cash-generating unit and determines a suitable discount rate in
order to calculate the present value of those cash flows. The data
used for impairment testing procedures are directly linked to the
Group's latest approved budget, adjusted as necessary to exclude
the effects of future reorganisations and asset enhancements.
Discount factors are determined individually for each
cash-generating unit and reflect current market assessments of the
time value of money and asset-specific risk factors.
Impairment losses for cash-generating units reduce first the
carrying amount of any goodwill allocated to that cash-generating
unit. Any remaining impairment loss is charged pro rata to the
other assets in the cash-generating unit.
Amortisation is calculated to write off the cost of intangible
assets less their estimated residual values using the
straight--line method over their estimated useful lives, from the
date the assets are available for use and is recognised in profit
or loss. The available for use date is determined as the date from
which a product is commercialised - this had yet to occur, for all
intangible assets, at 31 December 2022 and 2021. Goodwill is not
amortised.
i) Financial Instruments
IFRS 9 requires an entity to address the classification,
measurement and recognition of financial assets and
liabilities.
i) Classification
The Group classifies its financial assets in the following
measurement categories:
-- those to be measured at amortised cost.
The classification depends on the Group's business model for
managing the financial assets and the contractual terms of the cash
flows.
The Group classifies financial assets as at amortised cost only
if both of the following criteria are met:
-- the asset is held within a business model whose objective is
to collect contractual cash flows; and
-- the contractual terms give rise to cash flows that are solely
payment of principal and interest.
ii) Recognition
Purchases and sales of financial assets are recognised on trade
date (that is, the date on which the Group commits to purchase or
sell the asset). Financial assets are derecognised when the rights
to receive cash flows from the financial assets have expired or
have been transferred and the Group has transferred substantially
all the risks and rewards of ownership.
iii) Measurement
At initial recognition, the Group measures a financial asset at
its fair value plus, in the case of a financial asset not at fair
value through profit or loss (FVPL), transaction costs that are
directly attributable to the acquisition of the financial
asset.
Transaction costs of financial assets carried at FVPL are
expensed in profit or loss.
Receivables
Amortised cost: Assets that are held for collection of
contractual cash flows, where those cash flows represent solely
payments of principal and interest, are measured at amortised cost.
Interest income from these financial assets is included in finance
income using the effective interest rate method. Any gain or loss
arising on derecognition is recognised directly in profit or loss
and presented in other gains/(losses) together with foreign
exchange gains and losses. Impairment losses are presented as a
separate line item in the statement of profit or loss.
iv) Impairment
The Group assesses, on a forward-looking basis, the expected
credit losses associated with any debt instruments carried at
amortised cost. For trade receivables, the Group applies the
simplified approach permitted by IFRS 9, which requires expected
lifetime losses to be recognised from initial recognition of the
receivables.
j) Taxation
Taxation comprises current and deferred tax.
Current tax is based on taxable profit or loss for the period.
Taxable profit or loss differs from profit or loss as reported in
the income statement because it excludes items of income and
expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The
asset or liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax is recognised on differences between the carrying
amounts of assets and liabilities in the financial information and
the corresponding tax bases used in the computation of taxable
profit and is accounted for using the balance sheet liability
method. Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits
will be available against which deductible temporary differences
can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from initial recognition of
goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates,
and interests in joint ventures, except where the Group is able to
control the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable
future.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled, or the asset
realised. Deferred tax is charged or credited to profit or loss,
except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also dealt with in
equity.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
R&D tax rebate receivable represents refundable tax offsets,
in cash, from the Australian Taxation Office ("ATO") in relation to
expenditure incurred in the current year for eligible research and
development activities. Research and development activities are
refundable at a rate of 43.5% for each dollar spent, subject to
meeting certain eligibility criteria. Funds are expected to be
received subsequent to the lodgement of the income tax return and
research and development tax incentive schedule for the current
financial year. The Group recognises a taxation credit, in the year
the cash is received, which generally relates to expenses during
the prior period. In future periods (which will include UK R&D
tax credits), once an established pattern of successful claims is
recorded, the Group will consider an accruals basis, recording the
tax credit and a receivable in the period the eligible expenditure
was incurred.
k) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and
demand deposits with banks and other financial institutions, that
are readily convertible into known amounts of cash, and which are
subject to an insignificant risk of changes in value.
l) Equity, reserves and dividend payments
Share capital represents the nominal (par) value of shares that
have been issued.
Share premium includes any premiums received on issue of share
capital. Any transaction costs directly associated with the issuing
of shares are deducted from share premium, net of any related
income tax benefits.
Share based payments represents the value of equity settled
share-based payments provided to employees, including key
management personnel, and third parties for services provided.
Translation reserve comprises foreign currency translation
differences arising from the translation of financial statements of
the Group's foreign entities into GBP on consolidation.
Retained losses represent the cumulative retained losses of the
Group at the reporting date.
All transactions with owners of the parent are recorded
separately within equity.
No dividends are proposed for the period.
m) Earnings per Ordinary Share
The Company presents basic and diluted earnings per share data
for its Ordinary Shares.
Basic earnings per Ordinary Share is calculated by dividing the
profit or loss attributable to Shareholders by the weighted average
number of Ordinary Shares outstanding during the period.
Diluted earnings per Ordinary Share is calculated by adjusting
the earnings and number of Ordinary Shares for the effects of
dilutive potential Ordinary Shares.
n) Employee benefits
Provision is made for Lyramid's liability for employee benefits
arising from services rendered by employees up to the end of the
reporting period. In determining the liability, consideration is
given to employee wage increases and the probability that the
employee may satisfy vesting requirements.
Short term obligations
Liability for wages and salaries, including non-monetary
benefits, annual leave, long service leave and accumulating sick
leave expected to be settled within 12 months of the reporting date
are recognised in other payables in respect of employees' services
up to the reporting date and are measured at the amounts expected
to be paid when the liabilities are settled.
Other long-term employee benefit obligations
Liability for annual leave and long service leave not expected
to be settled within 12 months from the reporting date is
recognised in the provision for employee benefits and measured as
the present value of expected future payments to be made in respect
of services provided by employees up to the reporting date, using
the projected unit credit method. Consideration is given to
expected future wage and salary levels, of employee departures and
period of service.
Retirement benefit obligations
Contributions for retirement benefit obligations are recognised
as an expense as they become payable. Prepaid contributions are
recognised as an asset to the extent that a cash refund or a
reduction in the future payment is available. Contributions are
paid into the fund nominated by the employee.
Employee benefits provision
The liability for employee benefits expected to be settled more
than 12 months from the reporting date are recognised and measured
at the present value of the estimated future cash flows to be made
in respect of all employees at the reporting date. In determining
the present value of the liability, estimates of attrition rates
and pay increases through promotion and inflation have been taken
into account.
o) Leases
Leases are accounted for by recognising a right-of-use asset and
a lease liability, except for leases of low value assets and leases
with a duration of 12 months or less, for which the lease cost is
expensed in the period to which it relates.
A lease liability is recognised at the commencement date of a
lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease,
discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the consolidated entity's
incremental borrowing rate.
Lease payments comprise of fixed payments less any lease
incentives receivable, variable lease payments that depend on an
index or a rate, amounts expected to be paid under residual value
guarantees, exercise price of a purchase option when the exercise
of the option is reasonably certain to occur, and any anticipated
termination penalties.
The variable lease payments that do not depend on an index or a
rate are expensed in the period in which they are incurred. Lease
liabilities are measured at amortised cost using the effective
interest method. The carrying amounts are remeasured if there is a
change in the following: future lease payments arising from a
change in an index or a rate used; residual guarantee; lease term;
certainty of a purchase option and termination penalties. When a
lease liability is remeasured, an adjustment is made to the
corresponding right-of use asset, or to profit or loss if the
carrying amount of the right-of-use asset is fully written
down.
Right-of-use assets are initially measured at the amount of the
lease liability, reduced for any lease incentives received, and
increased for: lease payments made at or before commencement of the
lease; initial direct costs incurred; and the amount of any
provision recognised where the Group is contractually required to
dismantle, remove or restore the leased asset.
For contracts that both convey a right to the Group to use an
identified asset and require services to be provided to the Group
by the lessor, the Group has elected to account for the entire
contract as a lease, i.e. it does not allocate any amount of the
contractual payments to, and account separately for, any services
provided by the supplier as part of the contract.
p) Share-based payments
The Company has applied the requirements of IFRS 2 Share-based
payments.
The Company issues equity settled share-based payments to the
Directors and to third parties for the provision of services
provided for assistance in raising private equity. Equity settled
share-based payments are measured at fair value at the date of
grant, or the date of the service provided. The fair value
determined at the grant date or service date of the equity settled
share-based payment is recognised as an expense, or recognised
against share premium where the service received relates to
assistance in raising equity, with a corresponding credit to the
share based payment reserve. The fair value determined at the grant
date of equity settled share based payment is expensed on a
straight-line basis over the life of the vesting period, based on
the Company's estimate of shares that will eventually vest. Once an
option or warrant vests, no further adjustment is made to the
aggregate expensed.
The fair value Is measured by use of the Black Scholes model as
the Directors view this as providing the most reliable measure of
valuation. The expected life used in the model has been adjusted,
based on management's best estimates, for the effects of
non-transferability, exercise restrictions and behavioural
considerations. The market price used in the model is the quoted
LSE closing price. The fair value calculated is inherently
subjective and uncertain due to the assumptions made and the
limitation of the calculation used.
q) Financial Risk Management Objectives and Policies
The Group does not enter into any forward exchange rate
contracts.
The main financial risks arising from the Group's activities are
market risk, interest rate risk, foreign exchange risk, credit
risk, liquidity risk and capital risk management. Further details
on the risk disclosures can be found in Note 21.
r) Significant accounting judgements, estimates and assumptions
The preparation of the financial statements in conformity with
International Financial Reporting Standards requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group's
accounting policies.
Estimates and judgements are continually evaluated, and are
based on historical experience and other factors, including
expectations of future events that are believed to be reasonable
under the circumstances. The Directors consider the significant
accounting judgements, estimates and assumptions used within the
financial statements to be:
Impairment of non-financial assets and goodwill
In assessing impairment, management estimates the recoverable
amount of each asset or cash-generating unit based on estimated
cashflows from similar market transactions.
Business combinations
Management uses valuation techniques when determining the fair
values of certain assets and liabilities acquired in a business
combination (see Notes 1d and 4.2). In particular, the fair value
of contingent consideration is dependent on the market
capitalisation of the Group exceeding a threshold amount.
Management has performed the optional concentration test
available under IFRS3, in order to determine that the acquisition
of Oncogeni Ltd can be treated as an asset acquisition. Judgement
is required to determine whether 'substantially all' the fair value
is concentrated in a single asset or group of assets, and when
considering a group of assets, assessing whether those assets are
similar. In determining whether assets are similar, judgement is
required to consider the nature of each single identifiable asset
and the risks associated with managing and creating outputs from
the assets (that is, the risk characteristics). Management has
considered that the two separate in-progress research and
development programs, MK cell therapy and STAT-6 siRNA
therapeutics, are similar as they are both pre-clinical stage
oncology treatments.
Share Based Payments
In the year to 31 December 2022, 900,000 (31 December 2021:
35,875,000) warrants were granted. When accounting for the
share-based payment expense in respect of those warrants granted,
management must calculate the fair value of the share warrants
issued. Management have done so using the Black Scholes model,
however, a number of the inputs in this model are subjective and
thus management must make estimates.
4. Acquisitions
4.1. Acquisition of Oncogeni Limited
On 16 September 2022, the Group acquired 100% of the equity
instruments of Oncogeni Limited, a UK based business, thereby
obtaining control. The acquisition was assessed as being
complementary to the Group's existing pre-clinical drug development
business. The Group applied the concentration test under IFRS3 and
considered it as an asset acquisition.
The details of the asset acquisition are as follows:
Fair value of consideration transferred GBP
Equity consideration 3,750,000
Costs directly attributable to acquisition 109,079
Total 3,859,079
-------------------------------------------------------------- ----------
Recognised amounts of identifiable net assets at book values
Trade and other receivables 7,294
Cash and cash equivalents 5,601
-------------------------------------------------------------- ----------
Total current assets 12,895
-------------------------------------------------------------- ----------
Trade and other payables 15,792
-------------------------------------------------------------- ----------
Total current liabilities 15,792
-------------------------------------------------------------- ----------
Identifiable net liabilities 2,897
-------------------------------------------------------------- ----------
Intangible asset at cost 3,861,975
-------------------------------------------------------------- ----------
Consideration transferred settled in cash -
Cash and cash equivalents acquired 5,601
-------------------------------------------------------------- ----------
Net cash inflow on acquisition 5,601
-------------------------------------------------------------- ----------
Consideration transferred
The acquisition of Oncogeni was settled for a consideration of
GBP3,750,000, all of which was payable in shares. GBP109,079 of
costs directly attributable to the acquisition have been included
in the consideration of the transaction.
Identifiable net assets
The carrying value of the trade and other receivables acquired
as part of the business combination amounted to GBP7,294. As of the
acquisition date, the Group's best estimate of the contractual cash
flow not expected to be collected amounted to zero.
4.2. Acquisition of Lyramid Pty Limited
On 21 December 2021, Roquefort Therapeutics acquired 100% of the
equity instruments of Lyramid Pty Limited, an Australian based
business, thereby obtaining control. The acquisition was made in
line with the Group's stated strategic objective to pursue
investments in the global biotechnology sector.
The details of the business combination as follows:
Fair value of consideration transferred GBP
Amount settled in cash 648,495
Equity consideration 500,000
Loans assigned at acquisition (132,800)
Fair value of contingent consideration -
-------------------------------------------------------------- ----------
Total 1,015,695
-------------------------------------------------------------- ----------
Recognised amounts of identifiable net assets at book values
Inventories 9,273
Trade and other receivables 42,674
Cash and cash equivalents 42,270
-------------------------------------------------------------- ----------
Total current assets 94,217
-------------------------------------------------------------- ----------
Borrowings 212,065
Deferred tax liabilities 281,911
-------------------------------------------------------------- ----------
Total non-current liabilities 493,976
-------------------------------------------------------------- ----------
Other liabilities 28,195
Trade and other payables 37,881
-------------------------------------------------------------- ----------
Total current liabilities 66,076
-------------------------------------------------------------- ----------
Identifiable net liabilities 465,835
-------------------------------------------------------------- ----------
Intangible asset at fair value 1,481,530
-------------------------------------------------------------- ----------
Consideration transferred settled in cash 648,496
Cash and cash equivalents acquired (42,270)
-------------------------------------------------------------- ----------
Net cash outflow on acquisition 606,226
-------------------------------------------------------------- ----------
Acquisition costs charged to expenses 224,744
-------------------------------------------------------------- ----------
Consideration transferred
The acquisition of Lyramid was settled for a consideration of
GBP1,148,495; GBP648,495 being payable in cash and GBP500,000
payable in shares. On acquisition, loans of GBP132,800 were
assigned from the previous owner to the Company.
The purchase agreement included an additional contingent
deferred consideration to the Seller to be satisfied in the form of
Ordinary Shares as follows:
(a) if prior to fifth anniversary of Admission (on 21 December
2021), the Company's market capitalisation exceeds GBP25,000,000
for a period of 5 or more consecutive trading days the Company
shall issue to the Seller (or its nominee) 5,000,000 Ordinary
Shares; and
(b) if prior to fifth anniversary of Admission (on 21 December
2021) the Company's market capitalisation exceeds GBP50,000,000 for
a period of 5 or more consecutive trading days the Company shall
issue to the Seller (or its nominee) a further 5,000,000 Ordinary
Shares.
The fair value of contingent deferred consideration was
estimated to be nil at acquisition, at 31 December 2021 and at 31
December 2022.
Acquisition-related costs amounting to GBP224,744 are not
included as part of consideration transferred and have been
recognised as an expense in the consolidated statement of profit or
loss, as part of other expenses.
Identifiable net assets
The fair value of the trade and other receivables acquired as
part of the business combination amounted to GBP42,674. As of the
acquisition date, the Group's best estimate of the contractual cash
flow not expected to be collected amounted to zero.
Lyramid's contribution to the Group results
Lyramid incurred a loss of GBP14,449, for the eleven days from
21 December 2021 to the reporting date. Revenue for this period was
GBP719.
If Lyramid had been acquired on 17 August 2020, revenue of the
Group for the period would have been GBP23,857, and loss for the
period would have increased by GBP193,881.
5. Investments in subsidiaries
The parent company has investments in the following subsidiary
undertakings which are unlisted:
NName Country of Holding Proportion Principal activity
incorporation of voting rights
Subsidiary undertakings
------------------------------------- -------- ----------------- ----------------------
Oncogeni Limited England Ordinary 100% Biotechnology research
shares company
-------------- -------- ----------------- ----------------------
Lyramid Pty Limited Australia Ordinary 100% Biotechnology research
shares company
-------------- -------- ----------------- ----------------------
Tumorkine Pty Limited Australia Ordinary 100% Dormant
shares
-------------- -------- ----------------- ----------------------
6. Directors' and Employees' Remuneration
Directors' Remuneration
Year ended Period ended
31 December 31 December
2022 2021
GBP GBP
Fees to directors 308,692 47,301
Bonus - 10,000
Post-employment benefits 12,162 -
Share based payment charge 5,616 178,053
------------- -------------
326,470 235,354
============= =============
The total remuneration of the highest paid director was
GBP118,305 (2021: GBP160,825), including pension contributions of
GBP4,054 (2021: GBPNil).
Further information about the remuneration of individual
directors are provided in the Directors' Remuneration Report.
Remuneration of Key Management Personnel
Year ended 31 Restated
December 2022 Period ended
GBP 31 December
2021
GBP
Salaries and short-term employee benefits 308,692 49,200
Long term benefits - 10,221
Post-employment benefits 12,162 186
Share based payment charge 5,616 240,517
--------------------------------- --------------
326,470 300,124
================================= ==============
2021 Remuneration of key management personnel has been restated
to include all directors and Graham Robertson; it was previously
disclosed incorrectly as Graham Robertson only, which does not meet
the IAS24 definition of key management personnel as requiring the
inclusion of directors. Total key management personnel remuneration
was therefore restated from GBP64,770 to GBP300,124.
For 2022, upon the appointment of Ajan Reginald as director and
Chief Executive Officer, key management personnel has been
re-defined as the directors of Roquefort Therapeutics plc only.
Average number of employees during the year (including Directors
full time equivalent)
Year ended Period ended
31 December 31 December
2022 2021
GBP GBP
Continuing operations 5 1
============= =============
At 31 December 2022 the Company had nine (9) employees in total;
seven (7) Directors: Stephen West, Ajan Reginald, Martin Evans,
Michael Stein, Simon Sinclair, Darrin Disley, Jean Duvall and two
(2) laboratory staff: Sabena Sultan and Emma Morris.
Lyramid's sole employee is Graham Robertson.
Oncogeni has no employees.
7. Revenue
Revenue in the period was GBPNIL (2021: GBP716).
8. Other comprehensive income
Items credited/(charged) to the other comprehensive income line
of the statement of comprehensive income relate to the impact of
foreign exchange movements on cash and cash equivalents balances.
The corresponding movement is offset against the foreign exchange
reserve in the statement of financial position :
31 December 2022 31December 2021
GBP GBP
--------------------------- ----------------- ----------------
Opening Balance 624 -
Foreign exchange impact (14,989) 624
---------------------------- ----------------- ----------------
Closing Balance (14,365) 624
---------------------------- ----------------- ----------------
9. Operating Loss
The following items have been charged/(credited) to the
statement of comprehensive income in arriving at the Group's
operating loss from continuing operations:
Year ended Period ended
31 December 31 December
2022 2021
GBP GBP
Directors' and employee costs 365,564 59,607
Legal fees 46,373 31,165
Consulting and professional fees 209,768 125,807
Other expenditure 684,854 35,818
------------- -------------
Administrative expenses 1,306,561 252,392
Costs associated with the IPO - 182,053
Share based payments to directors and senior management 8,427 248,326
Costs associated with acquisition of subsidiary - 224,744
Research and development expenditure(1) 319,315 698
------------- -------------
Total operating expenditure 1,634,303 908,213
============= =============
(1) Includes short term lease expense of GBP81,250 for rental of
laboratory during the year (2021: GBPNil).
During the year the Group obtained the following services from
its auditor:
Year ended Period ended
31 December 31 December
2022 2021
GBP GBP
Audit Services
Statutory audit - Group and Company 157,336 22,000
============= =============
The Group incurred no finance costs during the year ended 31
December 2022 (2021: GBPnil).
10. Taxation
Year ended Period ended
31 December 31 December
2022 2021
GBP GBP
Current tax - -
Deferred tax - -
Australian R&D rebate (1) 18,886 -
------------- -------------
Income tax credit 18,886 -
============= =============
(1) R&D tax rebate receivable represents refundable tax
offsets, in cash, from the Australian Taxation Office ("ATO") in
relation to expenditure incurred in the prior year for eligible
research and development activities
Income tax can be reconciled to the loss in the statement of
comprehensive income as follows:
Restated
Year ended Period ended
31 December 31 December
2022 2021
GBP GBP
Loss (1,615,417) (917,433)
R&D tax rebate 18,886 -
-------------- --------------
(1,634,303) (917,433)
Tax at the UK Corporation rate of 19% 310,517 174,312
Effect of overseas tax rates 21,642 -
Expenditure disallowable for taxation (82,705) (75,850)
Share based payment temporary difference
on which no deferred tax asset has been
recognised (1,067) (47,181)
Remeasurement of deferred tax for changes
in tax rates 74,363 12,377
-------------- --------------
Tax losses on which no deferred tax
asset has been recognised (322,750) (63,658)
-------------- --------------
Total tax (charge)/credit - -
-------------- --------------
UK - -
Overseas - -
-------------- --------------
Total tax (charge)/credit) - -
============== ==============
The above tax reconciliation and unrecognised deferred tax
disclosure in the 2021 Annual Report was incorrectly calculated
based on the 2021 financial year tax rate of 19% applied to the
consolidated accounting loss of GBP917,433, rather than the
substantively enacted expected future tax rate when the differences
reverse, applied to the taxable loss, and incorrectly disclosed all
such deferred tax (GBP175,000) as relating to losses. The 2021
deferred tax disclosures have been restated to reflect the
expenditure disallowable for taxation to derive the taxable losses
and share-based payment timing differences, the substantively
enacted expected future tax rate when the differences reverse of
25%, and to disclose tax losses separately from other timing
differences such as share-based payments, and deferred tax thereon.
Disclosures have been expanded to separate UK from Australian tax
losses and deferred tax thereon.
The Group has accumulated tax losses of approximately
GBP1,557,117 (Restated 2021: GBP254,638) that are available, under
current legislation, to be carried forward indefinitely against
future profits. An error was identified in the prior year's
accumulated tax losses and the amount has been restated.
The tax losses can be broken down to the following:
Year ended Restated
31 December Period ended
2022 31 December
GBP 2021
GBP
AU (125,138) (62,784)
UK (1,431,979) (191,854)
Carried forward tax losses (1,557,117) (254,638)
============= ==============
A deferred tax asset has not been recognised in respect of these
losses due to the uncertainty of future profits. The amount of the
deferred tax asset not recognised is approximately GBP389,279
(2021: GBP63,660). An error was identified in the prior year's
deferred tax asset amount and the amount has been restated.
Restated
Year ended Period ended
31 December 31 December 2021
2022 GBP
GBP
UK AU UK AU
Tax effect of
temporary
differences:
Accumulated losses (357,995) (31,285) (47,964) (15,696)
Deductible
temporary
differences (14,181) - (53,502) -
-------------------------------- ----------------------------------- ---------------- --------------------------------
Deferred tax
(asset)/liability
not recognised (372,176) (31,285) (101,466) (15,696)
================================ =================================== ================ ================================
On 3 March 2021, the Chancellor announced that the corporation
tax rate would be increasing to 25% from 1 April 2023 for Companies
with profits over GBP250,000. The Company calculated the UK
deferred tax balances at 25% and the Australian deferred tax
balances at the current small company tax rate of 25%, which is
expected to continue in future periods.
11. Earnings per share
Year ended 31 Period ended
December 2022 31 December
GBP 2021
GBP
Loss attributable to equity shareholders (1,615,417) (917,433)
--------------- -------------
Weighted average number of ordinary
shares 103,479,476 24,701,793
Loss per share in pence
Basic (1.56) (3.71)
Diluted (1.56) (3.71)
There is no difference between the basic and diluted earnings
per share as the effect would be to decrease earnings per
share.
As at the end of the financial period there were 35,272,000
(2021: 34,375,000) warrants in issue, which could potentially have
an anti-dilutive impact depending on the results of the
Company.
12. Intangible Assets
In-progress Goodwill Total
R&D GBP GBP
GBP
Cost
At 1 January 2022 1,199,619 281,911 1,481,530
Acquired through asset acquisition 3,861,975 - 3,861,975
At 31 December 2022 5,061,594 281,911 5,343,505
------------ --------- ----------
Amortisation
At 1 January 2022 - -
Amortisation - - -
Impairment Charge - - -
At 31 December 2022 - - -
------------ --------- ----------
Carrying value
------------
At 31 December 2022 5,061,594 281,911 5,343,505
------------ --------- ----------
The Directors have concluded that there has been no impairment
of the goodwill associated with the acquisition of Lyramid Pty
Limited at 31 December 2022. The Goodwill represents the offsetting
balance to the deferred tax liability for the acquisition of
Lyramid.
In-progress Goodwill Total
R&D GBP GBP
GBP
Cost
At 17 August 2020 - - -
Acquisition through business
combination 1,119,619 281,911 1,481,530
At 31 December 2021 1,119,619 281,911 1,481,530
------------ --------- ----------
Amortisation
At 17 August 2020 - - -
Impairment Charge - - -
At 31 December 2021 - - --
------------ --------- ----------
Carrying value
At 17 August 2020 -
------------ --------- ----------
At 31 December 2021 1,119,619 281,911 1,481,530
------------ --------- ----------
At 31 December 2022, the Group performed its annual impairment
test in relation to intangible assets not yet available for use and
identified no indicators of impairment in line with IAS 36
Impairment of Assets, as all acquired in-progress R&D programs
are in active development and progressing as planned. At the test
date, it was determined that due to the ongoing pre-clinical
research and development using in-progress R&D acquired, there
was too much uncertainty to estimate a value-in-use, based on
discounted future cash flows from the assets. The Group estimated
fair value less costs to sell, by referring to market transactions
for pre-clinical and clinical oncology drug candidates. Due to the
nature of oncology drug development, the fair value is not
considered to be particularly sensitive to any one underlying
valuation assumption other than the ultimate outcome of drug
development and commercialisation, which is binary.
Accordingly, the Group has concluded that the estimated
recoverable amount of the assets did exceed the carrying amount and
therefore no impairment was identified.
13. Investments
Investment Investment Shares in subsidiary
in Lyramid in Oncogeni undertakings
Ltd Ltd
Company GBP GBP
GBP
Cost at 1 January
2022 1,015,695 - 1,015,695
Additions - 3,859,079 3,859,079
Cost at 31 December
2022 1,015,695 3,859,079 4,874,774
------------ ------------- ---------------------
Impairment
At 1 January 2022 - - -
Charge for the period - - -
At 31 December 2022 - - -
Net book value at
31 December 2022 1,015,695 3,859,079 4,874,774
------------ ------------- ---------------------
Investment
in Lyramid
Ltd
Company
GBP
Cost at 17 August 2020 -
Additions 1,015,695
Cost at 31 December 2021 1,015,695
------------
Impairment
At 17 August 2020 -
Charge for the period -
At 31 December 2021 -
------------
Net book value at 17 August 2020 -
------------
Net book value at 31 December 2021 1,015,695
------------
In the period the Company acquired 100% of the issued shares of
Oncogeni Limited. The Directors have concluded that there has been
no impairment to the investment in Oncogeni Limited at 31 December
2022.
In 2021 the Company acquired 100% of the issued shares of
Lyramid Pty Limited. The Directors have concluded that there has
been no impairment to the investment in Lyramid Pty Limited at 31
December 2022 or 31 December 2021.
Impairment review disclosures required by IAS36 are included in
note 12 to the financial statements.
14. Trade and other receivables
Group Group Company Company
31 December 31 December 31 December 31 December
2022 2021 2022 2021
GBP GBP GBP GBP
Trade receivables - 17,825 - -
Other receivables 45,124 2,135,031 - 2,130,875
Prepayments and accrued income 56,614 25,927 64,309 5,349
101,738 2,178,783 64,309 2,136,224
============ ============ ============ ============
There are no material differences between the fair value of
trade and other receivables and their carrying value at the year
end.
The other receivables balance in the prior year relates
primarily to shares issued in December 2021 as part of the
acquisition of Lyramid. These monies were collected in full in
January 2022.
No receivables were past due or impaired at the year end.
15. Cash and cash equivalents
Group Group Company Company
31 December 31 December 31 December 31 December
2022 2021 2022 2021
GBP GBP GBP GBP
Cash at bank and in hand 2,322,974 899,721 2,274,478 857,614
============ ============ ============ ============
The Directors consider the carrying amount of cash and cash
equivalents approximates to their fair value.
16. Trade and other payables
Group Group Company Company
31 December 31 December 31 December 31 December
2022 2021 2022 2021
GBP GBP GBP GBP
Trade creditors 68,379 40,718 26,209 962
Accruals and other creditors 211,291 154,799 157,593 126,688
279,670 195,517 183,802 127,650
============ ============ ============ ============
The fair value of trade and other payables approximates their
current book values.
17. Deferred tax assets and liabilities
Group Company
GBP GBP
At 1 January 2022 281,911 -
Released in year - -
Deferred tax liability recognised in business combination - -
At 31 December 2022 281,911 -
======== ========
At 17 August 2020 - -
Deferred tax liability recognised in business combination 281,911 -
At 31 December 2021 281,911 -
======== ========
See note 4.2 - Acquisition of Lyramid Pty Limited.
18. Share capital
Group and Company Ordinary Share Share Premium Total
Shares Capital
No. GBP GBP GBP
Issue of ordinary
shares on incorporation(1) 5,000,000 50,000 - 50,000
Issue of ordinary
shares (2) 7,400,000 74,000 - 74,000
Issue of ordinary
shares (3) 20,000,000 200,000 800,000 1,000,000
Exercise of broker
warrants (4) 1,500,000 15,000 - 15,000
Issue of ordinary
shares (5) 3,000,000 30,000 120,000 150,000
Issue of ordinary
shares (6) 30,000,000 300,000 2,700,000 3,000,000
Issue of ordinary
shares (7) 5,000,000 50,000 - 50,000
Share issue costs - - (159,405) (159,405)
-------------- ------------- ---------------- -----------------
At 31 December
2021 (restated) 71,900,000 719,000 3,460,595 4,179,595
-------------- ------------- ---------------- -----------------
Issue of ordinary
shares(8) 50,000,000 500,000 - 500,000
Issue of ordinary
shares(9) 7,249,998 72,500 942,499 1,014,999
-------------- ------------- ---------------- -----------------
At 31 December
2022 129,149,998 1,291,500 4,403,094 5,694,594
============== ============= ================ =================
The share premium account balance for the year ended 31 December
2021 has been restated due to an amount of GBP450,000 previously
recognised in 2021 as being credited to the share premium account,
reclassified as being credited to the merger reserve (refer to the
consolidated and company statements of financial position, and to
Note 20).
(1) On incorporation on 17 August 2020, the Company issued
5,000,000 ordinary shares of GBP0.01 at their nominal value of
GBP0.01 per share.
(2) On 20 November 2020, the Company issued 7,400,000 ordinary
shares at their nominal value of GBP0.01 per share.
(3) On admission to the Standard List of the LSE on 22 March
2021, 20,000,000 shares were issued at a placing price of GBP0.05
per share.
(4) On 19 April 2021 1,500,000 brokers warrants were exercised
at the exercise price of GBP0.01 per share, resulting in the issue
of 1,500,000 ordinary shares.
(5) On 18 August 2021, the Company issued 3,000,000 ordinary
shares of GBP0.01 at an issue price of GBP0.05 per share.
(6) On 21 December 2021, the Company issued 30,000,000 ordinary
shares of GBP0.01 at an issue price of GBP0.10 per share.
(7) On 21 December 2021, the Company issued 5,000,000 ordinary
shares of GBP0.01 at an issue price of GBP0.10 per share.
(8) On 16 September 2022, the Company issued 50,000,000 ordinary
shares of GBP0.01 to acquire Oncogeni Limited, recorded at the
market price of GBP0.075 per share.
(9) On 16 September 2022, the Company issued 7,249,998 ordinary
shares of GBP0.01 for cash at a placing price of GBP0.14 per
share.
19. Share Based Payment Reserves
2022 2021
Group and Company GBP GBP
Opening balance 366,708 -
Directors warrants issued (1) - 6,833
Broker seed warrants issued (2) - 60,002
Broker placing warrants issued (3) - 8,076
Completion warrants issued (4) - 100,947
Senior management warrants issued (5) - 140,544
Optiva warrants issued (6) - 44,417
-------- -----------
Orana warrants issued (7) - 5,889
-------- -----------
NED and Advisor warrants issued(8) 8,427 -
-------- -----------
At 31 December 375,135 366,708
-------- -----------
(1) On admission to LSE on 22 March 2021 750,000 directors'
warrants were issued that entitle the warrant holder to subscribe
for one Ordinary Share at GBP0.05 per ordinary share and a further
750,000 directors warrants were issued that entitle the warrant
holder to subscribe for one ordinary share at GBP0.10 per ordinary
share. Upon issue all warrants vested on the earlier of 12 months
or the Company completing the acquisition of a company or business.
All warrants vested on 21 December 2021 when the Company completed
the acquisition of Lyramid Pty Ltd.
(2) On admission to LSE on 22 March 2021 1,500,000 brokers
warrants were issued that entitle the warrant holder to subscribe
for one Ordinary Share at GBP0.01 per ordinary share. The warrants
vested immediately upon grant.
(3) On admission to LSE on 22 March 2021, 480,000 Broker Placing
Warrants were issued that entitle the warrant holder to subscribe
for one ordinary share at the placing price of GBP0.05 per ordinary
share. The warrants vested immediately upon grant.
(4) On readmission to LSE on 21 December 2021, 3,000,000
Completion Warrants were issued that entitle, Stephen West (the
warrant holder) to subscribe for one ordinary share at GBP0.10 per
ordinary share. The warrants vested immediately upon grant.
(5) On readmission to LSE on 21 December 2021, 4,500,000 Senior
Management Warrants were issued that entitle the warrant holder to
subscribe for one ordinary share at GBP0.15 per ordinary share. One
third of the warrants vest on 21 December 2022, 21 December 2023
and 21 December 2024.
(6) On readmission to LSE on 21 December 2021, 1,320,000 Optiva
Warrants were issued that entitle the warrant holder to subscribe
for one ordinary share at GBP0.10 per ordinary share. The warrants
vested immediately upon grant.
(7) On re-admission to LSE on 21 December 2021, 175,000 Orana
Warrants were issued that entitle the warrant holder to subscribe
for one ordinary share at GBP0.10 per ordinary share. The warrants
vested immediately upon grant.
(8) On 26 June 2022, Ms Jean Duvall, Dr Simon Sinclair and
Professor Trevor Jones were awarded 300,000 NED and Advisor
warrants each. These warrants entitle the warrant holder to
subscribe for one ordinary share at GBP0.15 per ordinary share. 50%
Warrants are exercisable one year after grant date with the
remaining balance exercisable two years after grant date.
The fair value of the services received in return for the
warrants granted are measured by reference to the fair value of the
warrants granted. The estimate of the fair value of the warrants
granted is measured based on the Black-Scholes valuations model.
Measurement inputs and assumptions are as follows:
Warrant Risk
Number Share Exercise Expected Expected free Expected
of warrants Price Price volatility life rate* dividends
----------------- ------------- -------- --------- ------------ --------- ------- -----------
Director 750,000 GBP0.05 GBP0.05 50.00% 5 0.15% 0.00%
----------------- ------------- -------- --------- ------------ --------- ------- -----------
Director 750,000 GBP0.05 GBP0.10 50.00% 5 0.15% 0.00%
----------------- ------------- -------- --------- ------------ --------- ------- -----------
Broker 1,500,000 GBP0.05 GBP0.01 50.00% 0.08 0.15% 0.00%
----------------- ------------- -------- --------- ------------ --------- ------- -----------
Broker Placing 480,000 GBP0.05 GBP0.05 50.00% 3 0.15% 0.00%
----------------- ------------- -------- --------- ------------ --------- ------- -----------
Completion 3,000,000 GBP0.10 GBP0.10 50.00% 3 0.15% 0.00%
----------------- ------------- -------- --------- ------------ --------- ------- -----------
Senior Mgt 4,500,000 GBP0.10 GBP0.15 50.00% 5 0.15% 0.00%
----------------- ------------- -------- --------- ------------ --------- ------- -----------
Optiva 1,320,000 GBP0.10 GBP0.10 50.00% 3 0.15% 0.00%
----------------- ------------- -------- --------- ------------ --------- ------- -----------
Orana 175,000 GBP0.10 GBP0.10 50.00% 3 0.15% 0.00%
----------------- ------------- -------- --------- ------------ --------- ------- -----------
NED and Advisor 900,000 GBP0.08 GBP0.15 50.00% 5 0.15% 0.00%
----------------- ------------- -------- --------- ------------ --------- ------- -----------
TOTAL 13,375,000
----------------- ------------- -------- --------- ------------ --------- ------- -----------
* restated - the risk-free rate for all 2021 warrants was
incorrectly disclosed as 15% in the 2021 Annual Report. The correct
figure (0.15%) was used in the underlying share-based payment
calculations and therefore there is no effect on the 2021
performance or position of the Group and Company.
Warrants
Number of Exercise Price Expiry date
Warrants
On incorporation - - -
Issued on 25 November 5,000,000 GBP0.10 22 March 2026
2020
Issued on 25 November 7,000,000 GBP0.10 22 March 2026
2020
Issued on 17 March 2021 1,500,000 GBP0.01 20 April 2021
Issued on 17 March 2021 480,000 GBP0.05 22 March 2024
Issued on 17 March 2021 750,000 GBP0.05 22 March 2026
Issued on 17 March 2021 750,000 GBP0.10 22 March 2026
Issued on 17 March 2021 10,000,000 GBP0.10 21 March 2023
Exercised on 19 April (1,500,000) GBP0.01 20 April 2021
2021
Issued on 18 August 1,500,000 GBP0.10 22 March 2023
2021
Issued on 13 October 3,000,000 GBP0.10 21 December 2024
2021
Issued on 13 October 4,500,000 GBP0.15 21 December 2026
2021
Issued on 13 October 1,320,000 GBP0.10 21 December 2024
2021
Issued on 13 October 175,000 GBP0.10 21 December 2024
2021
---------------------------- ---------------
At 31 December 2021 34,475,000 GBP0.105
---------------------------- ---------------
Issued on 28 April 2022(1) 900,000 GBP0.15 28 April 2027
---------------------------- ---------------
At 31 December 2022 35,375,000 GBP0.106
============================ ===============
(1) 50% of the warrants vest on 28 April 2023 and the remainder
vest on 28 April 2024
The weighted average time to expiry of the warrants as at 31
December 2022 is 3.10 years (2021: 3.05 years).
The expected volatility was calculated using the Exponentially
Weighted Moving Average Mode. Due to limited trading history
comparable listed peer company information was used.
20. Merger Relief Reserve
Group and Company
GBP
At 1 January 2021 -
Acquisition of Lyramid Pty Ltd (1) 450,000
At 31 December 2021 450,000
==========
Acquisition of Oncogeni Limited (2) 3,250,000
At 31 December 2022 3,700,000
==========
(1) The issue on 21 December 2021 of 5,000,000 new shares
relating to the acquisition of Lyramid Pty Ltd. The reserve
reflects the difference between the nominal value of shares at the
date of issue of GBP0.01 and the share price immediately preceding
the issue of GBP0.10 per share. The shares issued formed part of
the consideration for the acquisition of 100% of the equity of
Lyramid and therefore qualify for merger relief.
(2) The issue on 16 September 2022 of 50,000,000 new shares
relating to the acquisition of Oncogeni Ltd. The reserve reflects
the difference between the nominal value of shares at the date of
issue of GBP0.01 and the share price immediately preceding the
issue of GBP0.75 per share. The shares issued formed part of the
consideration for the acquisition of 100% of the equity of Oncogeni
and therefore qualify for merger relief.
21. Financial Instruments and Risk Management
Capital Risk Management
The Group manages its capital to ensure that it will be able to
continue as a going concern while maximising the return to
stakeholders. The overall strategy of the Group is to minimise
costs and liquidity risk.
The capital structure of the Group consists of equity
attributable to equity holders of the Group, comprising issued
share capital, reserves and retained earnings as disclosed in the
Statement of Changes of Equity.
The Group is exposed to a number of risks through its normal
operations, the most significant of which are interest, credit,
foreign exchange, commodity and liquidity risks. The management of
these risks is vested to the Board of Directors.
The sensitivity has been prepared assuming the liability
outstanding was outstanding for the whole period. In all cases
presented, a negative number in profit and loss represents an
increase in finance expense / decrease in interest income.
Credit Risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group's
receivables from customers. Indicators that there is no reasonable
expectation of recovery include, amongst others, failure to make
contractual payments for a period of greater than 120 days past
due.
The carrying amount of financial assets represents the maximum
credit exposure.
The principal financial assets of the Group are bank balances.
The Group deposits surplus liquid funds with counterparty banks
that have high credit ratings, and the Directors consider the
credit risk to be minimal.
The Group's maximum exposure to credit by class of individual
financial instrument is shown in the table below:
Carrying value Maximum exposure
at at
31 December 31 December
2022 2022
GBP GBP
Trade receivables 56,613 56,613
Other receivables 45,124 45,124
Cash and cash equivalents 2,322,974 2,322,974
--------------- -----------------
2,424,741 2,424,741
=============== =================
Currency Risk
The Group operates in a global market with income and costs
possibly arising in a number of currencies and is exposed to
foreign currency risk arising from commercial transactions,
translation of assets and liabilities and net investment in foreign
subsidiaries. Exposure to commercial transactions arise from sales
or purchases by operating companies in currencies other than the
Group's functional currency. Currency exposures are reviewed
regularly.
The Group has a limited level of exposure to foreign exchange
risk through their foreign currency denominated cash balances and a
portion of the Group's costs being incurred in Australian Dollars.
Accordingly, movements in the Sterling exchange rate against these
currencies could have a detrimental effect on the Group's results
and financial condition.
Currency risk is managed by maintaining some cash deposits in
currencies other than Sterling.
The table below shows the currency profiles of cash and cash
equivalents:
At 31 December
2022
Cash and cash equivalents GBP
Sterling 2,279,240
Australian Dollars 43,734
---------------
2,322,974
===============
Foreign currency sensitivity analysis
As at 31 December 2022, the sensitivity analysis assumes a
+/-10% change of the AUD/GBP, exchange rates, which represents
management's assessment of a reasonably possible change in foreign
exchange rates (2021: 10%). The sensitivity analysis was applied on
net loss on the Australian operations and the carrying value of
financial assets and liabilities.
At 31 December At 31 December
2022 2021
GBP GBP
+10% weaker (10%) +10% weaker (10%)
stronger stronger
Net Loss (1) (34,181) 34,181 (1,445) 1,445
Carrying value of net assets (594) 594 (167) 167
(1) 10% weaker relates to the Great British Pound weakening
against the currency and therefore the Group would incur greater
expenditure in its functional currency
(2) 10% weaker relates to the Great British Pound weakening
against the currency and therefore the net liabilities (excluding
intercompany borrowings) denominated in AUD will increase
Liquidity Risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another
financial asset. The Group's approach to managing liquidity is to
ensure, as far as possible, that it will have sufficient liquidity
to meet its liabilities when they are due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to the Group's reputation.
The Group seeks to manage liquidity risk by regularly reviewing
cash flow budgets and forecasts to ensure that sufficient liquidity
is available to meet foreseeable needs and to invest cash assets
safely and profitably. The Group deems there is sufficient
liquidity for the foreseeable future.
The principal current asset of the business is cash and cash
equivalents and is therefore the principal financial instrument
employed by the Group to meet its liquidity requirements. The Board
ensures that the business maintains surplus cash reserves to
minimise any liquidity risk.
The financial liabilities of the Group and Company,
predominantly trade and other payables, are mostly due within 3
months (2021: 3 months) of the Consolidated Statement of Financial
Position date; therefore, the undiscounted amount payable is the
same as their carrying value. Further analysis of the lease
commitment is provided in note 23. All other non-current
liabilities are due between 1 to 5 years after the period end. The
Group does not have any borrowings or payables on demand which
would increase the risk of the Group not holding sufficient
reserves for repayment.
The Group had cash and cash equivalents at period end as
below:
At 31 December
2022
GBP
Cash and cash equivalents 2,322,974
2,322,974
===============
Interest Rate Risk
The Group is exposed to interest rate risk whereby the risk can
be a reduction of interest received on cash surpluses held and an
increase in interest on borrowings the Group may have. The maximum
exposure to interest rate risk at the reporting date by class of
financial asset was:
At 31 December
2022
GBP
Bank balances 2,322,974
2,322,974
===============
The Group does not currently earn interest on its cash
deposits.
22. Financial assets and financial liabilities
Group Financial Financial
Assets Liabilities
At amortised At amortised
31 December 2022 Cost Cost Total
Financial assets/liabilities GBP GBP GBP
Trade and other receivables 101,737 - 101,737
Cash and cash equivalents 2,322,974 - 2,322,974
Trade and other payables - (279,668) (279,668)
2,424,711 (279,668) 2,145,043
============== ============== ==========
Company Financial Financial
Assets Liabilities
At amortised At amortised
31 December 2022 Cost Cost Total
Financial assets/liabilities GBP GBP GBP
Trade and other receivables 515,931 - 515,931
Cash and cash equivalents 2,274,478 - 2,274,478
Trade and other payables - (183,802) (183,802)
2,790,409 (183,802) 2,606,607
============== ============== ==========
23. Commitments
At 31 December At 31 December
2022 2021
GBP GBP
Committed at the reporting date but not recognised
as liabilities, payable:
Laboratory rental 37,500 -
Research & Development 105,655 -
24. Contingent Liabilities
There were no contingent liabilities at 31 December 2022 or 31
December 2021. Details of deferred contingent consideration are
disclosed in note 4.2.
25. Related party transactions
There were no related party transactions during the years ended
31 December 2021 and 2022.
26. Post reporting date events
On 20 February 2023 the Company announced that it had signed an
exclusive licence and royalty agreement, for the field of medical
diagnostics only, with a leading international diagnostics company,
Randox Laboratories Ltd ("Randox"), in relation to its Midkine
antibody portfolio. Randox and Roquefort Therapeutics will now
engage in collaborative research programs to develop new cancer
diagnostics that will identify patients treatable with the
Company's Midkine therapeutics. The Group is eligible to receive
upfront and potential marketing milestone receipts, as well as
royalties on diagnostics products sold. The Group received from
Randox an upfront amount of GBP200,000 and can earn further
potential milestone receipts of up to GBP150,000 for marketing
approval in certain jurisdictions.
On 8 March 2023 the Company announced that it had successfully
developed a new novel platform of anti-cancer mRNA
therapeutics.
27. Ultimate controlling party
As at 31 December 2022, there was no ultimate controlling
party
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END
FR FIMRTMTIMBBJ
(END) Dow Jones Newswires
June 05, 2023 02:00 ET (06:00 GMT)
Roquefort Therapeutics (LSE:ROQ)
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Roquefort Therapeutics (LSE:ROQ)
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