TIDMPYC

RNS Number : 5021A

Physiomics PLC

30 September 2020

30 September 2020

Physiomics plc

("Physiomics" or "the Company")

Final Results for the year ended 30 June 2020 and Notice of AGM

Highlights

Financial Highlights

-- Total income (revenue and grant income) increased 7% to GBP841,649 (2019: GBP783,101), the highest in the Company's history

   --      The operating loss decreased 33% to GBP134,385 (2019: GBP201,219) 
   --      The loss after taxation decreased 38% to GBP64,424 (2019: GBP104,040) 

-- Placing and subscription in May 2020 raised GBP828,750 (gross) through the issue of 23,678,571 new ordinary shares at an issue price of 3.5 pence per share

-- At 30 June 2020, the surplus of shareholders' funds was GBP1,314,981 (30 June 2019: GBP607,914)

   --      Cash and cash equivalents at 30 June 2020 of GBP1,047,860 (30 June 2019: GBP405,366) 

Operational highlights

   --      Renewal of agreement with Merck KGaA in December 2019 
   --      Repeat contracts with clients CellCentric and Bicycle Therapeutics 

-- Award of NIHR grant to fund clinical study relating to Physiomics' personalised dosing tool for prostate cancer and ongoing discussion relating to its commercialisation

   --      Post period end, award of contract by new big-pharma client, Astellas Pharma Inc 
   --      Ongoing discussion with several large CROs relating to potential collaborations 
   --      Strongest ever business development pipeline resulting from higher marketing spend 

Dr Paul Harper, Non-Executive Chairman, commented:

"The Company continues to make good progress, with all key indicators of performance moving in the right direction. We are pleased to be working with Cancer Research UK (announced July 2019) and to have repeat contracts with both CellCentric and Bicycle Therapeutics, as well as our first contract with Astellas Pharma Inc.

The team has also worked hard to ensure that our on-going relationship with Merck led to a renewal of the arrangement (first announced in December 2017). We believe that the Merck team recognises the quality and value of our modelling itself, coupled with the interpretation and guidance we are able to provide. The relationship with Merck represents an independent endorsement of the quality of the Physiomics(R) package, which has allowed Dr Millen and his team to create new relationships and to secure new contracts. This success has led to a healthy pipeline of new opportunities going forward. It is also my firm belief that the emerging personalised medicine package will add significantly to the Company's portfolio, opening wholly new opportunities. Meanwhile the team has embarked on a more extensive business development strategy aimed at bringing in new business.

I cannot stress too highly the quality of the team. They combine an extraordinary range of skills across many disciplines. They have evolved into an exceptional group, combining their skills, expertise and experience to provide clients with an outstanding service. This has enabled Dr Millen to orchestrate a major business development initiative which has achieved significant success."

Annual General Meeting

The Company is closely monitoring the COVID-19 situation, including UK Government guidance and will continue to do so in the lead up to the AGM. The health of our shareholders, employees and stakeholders remains extremely important to us and accordingly, the board has taken into consideration the current UK government stay at home measures as well as ICSA guidance. Should these directives remain in place up to the AGM, shareholders, advisors and other guests will not be allowed to attend the AGM in person and anyone seeking to attend the meeting will be refused entry. As such, shareholders should note they are not entitled to attend the AGM in person unless notified otherwise via the Company's website at www.physiomics.co.uk .

Shareholders are requested to therefore submit their votes, in respect of the business to be discussed, via proxy as early as possible. Shareholders should appoint the Chair of the meeting as their proxy. If a shareholder appoints someone else as their proxy, that proxy will not be able to attend the meeting in person or cast the shareholder's vote.

The business at the AGM will be curtailed to the formal business section only, with no wider presentations on business performance or Q&A. If any shareholder has a question they would like to pose to the board, this should be submitted to the Chair via info@physiomics.co.uk. In addition, as detailed in our announcement of 23 September 2020, the Company will be holding an investor presentation at 11.00 a.m. on 5 October 2020. Please see this announcement for details of how to register for this event.

In the event that further disruption to the 2020 AGM becomes unavoidable, we will announce any changes to the meeting (such as timing or venue). The website also provides links to the annual report and accounts, interim results and other relevant announcements immediately after they have been made available via RNS.

The Annual General Meeting of the Company will be held at the offices of Physiomics Plc, The Magdalen Centre, Oxford Science Park, Oxford OX4 4GA at 10.00 a.m. on 17 November 2020.

The full annual report and accounts for the year ended 30 June 2020 along with the notice of AGM will be uploaded on the Company's website at www.physiomics.co.uk and posted to shareholders during October.

Chairman and Chief Executive Officer's Statement

Introduction

The Company is pleased to report that it has continued to grow its top line and reduce its losses despite some challenges as a result of the COVID 19 epidemic. Encouragingly, key clients Merck, CellCentric and Bicycle Therapeutics each awarded the Company repeat contracts during the year. It was particularly pleasing that the announcement of a further contract with Bicycle Therapeutics on 30 June 2020 represented the fourth Bicycle asset that Physiomics has now supported. Just after the financial year end, on 31 July, the Company was also delighted to announce that it had been retained by a major new big pharma client, Astellas Pharma Inc., to conduct a project on an undisclosed asset utilising Physiomics' Virtual Tumour immuno-oncology modelling platform.

In order to capitalise on its current momentum, the Company completed an oversubscribed fundraise in May 2020, raising GBP829k (gross). Key uses of these funds are to increase the Company's marketing capability, hire new technical staff and invest further in its personalised dosing technology initiative.

In addition to achieving strong organic growth in its consulting business, the Company has also been engaging in discussions with several contract research organisations with regard to possible collaborations. Previously reported discussions relating to the potential commercialisation of the Company's personalised dosing technology also remain ongoing.

Overall, the year has been a productive one for Physiomics. The Company's reputation amongst both investors and clients appears to be strengthening and we continue to focus on generating shareholder value.

Financial Review

The Company's full year total income of GBP841,649 reflects these achievements, being the highest in its history, and a 7% increase on the previous full year to 30 June 2019. Total income grew to GBP499,037 in the second half compared with the first half unaudited total income of GBP342,612. This pattern is consistent with previous years and substantially due to both summer and Christmas holidays falling in the first half of the Company's financial year.

The operating loss decreased 33% to GBP134,385 (2019: GBP201,219). The loss after taxation decreased 38% to GBP64,424 (2019: GBP104,040).

Following the Company's fundraise in May 2020, which raised GBP829k (gross), the Company allocated funds to expand the in-house team, increase marketing spend and invest further in its personalised medicine initiative, all of which are expected to continue to help to generate and support the increased levels of business going forwards.

Net assets at the year-end were GBP1,314,981 (2019: GBP607,914) of which GBP1,047,860 (2019: GBP405,366) comprised cash and cash equivalents. This is the highest net asset position in the Company's history, combined with the lowest loss since 2009. The net cash outflow from operating activities fell by GBP27,402 (2019: GBP26,025) compared with the previous year.

COVID 19

These results were achieved despite the ongoing COVID 19 crisis and the Company is pleased to say that there appears to be only very minimal effects of COVID 19 on its business so far. In particular:

-- There has been no reduction in the number of new business meetings achieved, if anything such meetings have increased; and

-- The Company's employees achieved a smooth transition to remote working, without impacting on the quality of interactions with clients. This is currently being maintained and will be kept under review

As previously disclosed, there has been the delay in the commencement of our NIHR funded trial at the Portsmouth Technology Trials Unit, as a result of which some grant income anticipated for the financial year ended 30 June 2020 will now fall into the current financial year ending 30 June 2021, though it is not anticipated that there will be any overall loss of income relating to the grant over its term.

Staff

The Company's staff remain critical to a business which is essentially about delivering analysis to clients. This is derived from rigorous analysis by individuals experienced in oncology drug development, applied mathematics and from their ability to clearly communicate this analysis to the client. We believe our staff score highly on both these fronts and remain the key to our continuing success. The Company has publicly stated its intention to utilise some of the funds raised in its May 2020 fundraise to recruit a further full-time staff member and this process is ongoing. In addition, the Company has decided to retain an intern for a period of around four months starting in September 2020. For both the full-time and the intern position, the Company attracted a significant number of applications from well-qualified individuals, which is further validation of the Company's reputation in the job market and of the profile it is achieving through its work. The board regularly reviews staff utilisation rates and anticipated workload and this will continue.

The Company would like to thank all its staff for their continuing hard work and commitment during the year.

Outlook

The Company continues to develop its reputation amongst investors and clients as it moves ever closer to profitability and cashflow break-even. With additional funding from our May 2020 fundraise applied to marketing activities, the Company's business development pipeline is the strongest it has ever been. The Company expects to continue to attract both repeat business and new clients of all sizes, to develop its personalised dosing technology and to explore innovative collaboration opportunities over the course of the current financial year.

Dr Jim Millen, Chief Executive Officer

Dr Paul Harper, Non-Executive Chairman

Strategic Report

Principal activities

Physiomics is engaged in providing consulting services to pharmaceutical companies in the areas of outsourced quantitative pharmacology and computational biology, using a combination of industry standard technologies and its own proprietary technology platform, Virtual Tumour(TM). In simple terms, this means helping companies to put the right drugs together, at the right dose, in the right types of cancer to help achieve the best possible results at the most economic cost.

Modelling and simulation using Virtual Tumour(TM) and other tools

The Company's focus is almost exclusively in the provision of modelling, simulation and data analysis services covering the full range of oncology R&D and with a focus on quantitative pharmacology techniques. The Company's main commercial revenue driver is its proprietary Virtual Tumour(TM) predictive software in the pre-clinical and clinical space, and in particular extensions to this software that have been developed over the last few years to address specialist areas such as immune-oncology, DNA damage repair, radiation therapy and others. The Company also utilises other industry standard tools, such as NONMEM and MATLAB as well as developing its own bespoke models using the R programming language. Projects often require a blend of several approaches to deliver the optimal insights to clients.

Working in the late discovery, preclinical and clinical phases of pharmaceutical R&D, Physiomics adds value by helping companies to efficiently derive insights from their data. This is achieved in a variety of ways ranging from data analysis, visualisation and interpretation to mathematical modelling of pharmacokinetic and pharmacodynamic effects (i.e. how much drug is in the body and what effect it is having). The end result is that our clients are in a better position to optimise the treatments they are developing by selecting the right targets, drugs, dosages, timing and combinations. We believe that we add particular value in early development during the transition from pre-clinical to first-in-man studies where our experience and capabilities have been helpful in supporting clients such as UK-based CellCentric and Bicycle Therapeutics in identifying optimal clinical trial designs and justifying this to regulatory authorities. In the 2019/20 financial year, the Company has been able to:

-- Support big pharma companies in making strategic decisions about how to optimise combinations of investigational and approved agents in mid-stage clinical development programs. The potential value of getting these decisions right first time and hitting a target profile is significant.

-- Support small and medium sized biotechs by providing a full spectrum of pharmacokinetic and pharmacodynamic modelling, analysis and interpretation services as well as by helping them to translate their pre-clinical data to clinical settings and enable them to respond more dynamically to new data coming out of their first human studies.

The Company is beginning to see an increased willingness for clients to allow their name to be associated with Physiomics(R) , which we believe is an indication of the value that we are adding and the increased credibility and recognition of the Physiomics(R) brand. We believe that this in turn further improves our ability to attract and retain new business. The most recent example of this was the public announcement of a contract award by Astellas Pharma Inc.

Personalised medicine

In addition to its core modelling and simulation business, the Company has continued to develop its technology for use in the field of personalised medicine. The term "personalised medicine" is used in many ways but is most often associated with the use of genetic markers in the selection of drugs to treat a particular group of patients. Physiomics' approach has been to use its expertise in interpreting pre-clinical and clinical cancer data to help predict when to treat patients and with what dose of drug. This approach relies more on advanced analytical techniques, many of which (such as machine learning and neural networks) are in the field of artificial intelligence (AI). To date this has been funded by two Innovate UK Grants and most recently by an NIHR grant awarded in March 2020. This latest grant is being used to fund an observational trial at Portsmouth's Technology Trials Unit, which is intended to gather data to further validate and support the use of the Company's personalised dosing technology. In parallel with these ongoing research activities, the Company is exploring how it can accelerate the commercialisation of its technology via collaboration with other companies that are more established in this field, especially in the USA.

Business Model

The Company's main commercial business is the provision of consulting services which rely substantially on our Virtual Tumour(TM) pre-clinical and clinical models that are proprietary to the Company. Physiomics works primarily on a fee for service basis, although we are open to and continue to explore other approaches including risk sharing and collaboration including:

-- The incorporation of success-based milestones in our consulting contracts. Examples of companies where Physiomics has historically entered into risk-sharing arrangements include Sareum Holdings plc and ValiRx plc;

-- The embedding of our technology as part of a broader offering in collaboration with another service provider. The Company is in several active discussions of this nature and will report further once specific agreements have been reached; and

-- The creation of a version of Virtual Tumour(TM) that could be licensed to a client for its own use rather than by the Company as part of a consulting service. The Company already creates executable versions of a number of its models on request by clients. A further step would be to develop Virtual Tumour(TM) into a tool whose full functionality could be utilised by a client, either alongside a consulting project or possibly independently.

The Company will continue to explore these alternative approaches, though envisages that consulting will continue to be the main driver of revenues in the short to medium term.

Key strengths

The consulting business is the core of the Company's commercial activity and we believe that it is unique in a number of respects:

-- We focus almost exclusively on oncology. Our team has over 120 years of combined experience in the development of cancer drugs and computational biology, and in particular of quantitative pharmacology (essentially analysing how much drug to use and trying to predict what effect it will have). Over the Company's lifetime it has completed over 85 projects covering hundreds of targets, cell lines, drugs, and cancer types;

-- We use a proprietary in-house platform called Virtual Tumour(TM). Although the team can take advantage of all commonly used modelling, simulation and data analysis techniques in the cancer field, we also have access to an internally developed platform that is uniquely useful when considering combinations of cancer drugs (and most anti-cancer regimes eventually involve using multiple agents simultaneously); and

-- We provide a responsive and dedicated service. Many large companies offer services in the cancer space though do not restrict themselves to cancer nor to quantitative pharmacology. As a result, we believe, many of these companies cannot offer the same level of bespoke, responsive service that Physiomics can and does.

Our strategy

Physiomics' strategy is to grow its fee for service business model by leveraging its own proprietary modelling and simulation technology to the benefit of its customers. Our main strategic aims are to:

-- Form close partnerships with customers, attract repeat business and grow alongside them (as evidenced by having now worked on four assets with Bicycle Therapeutics and by repeat business with Merck and CellCentric);

-- Diversify the customer base by working with a variety of commercial and not-for-profit clients (such as the NIHR grant to fund a personalised medicine study announced in March 2020);

-- Broaden our geographical presence in Europe and North America by leveraging the Company's existing contact base and increasing marketing efforts (our most recent new client, Astellas Pharma is based in the US and Japan);

-- Work with a mix of early pre-clinical stage projects and high value clinical development phase of oncology (we have active translational stage projects with Merck, Bicycle Therapeutics, CellCentric and Astellas Pharma); and

-- Develop new, complementary areas of business such as immune-oncology and personalised medicine that can add long term value to the business.

Obligations under s172 of the Companies Act

The Directors are mindful of their obligations under s172(1) of the Companies Act 2006 to act in good faith to promote the success of the Company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to the following:

 
 Principle                                 Company's actions 
 The likely consequences of any            The Company has a long term vision 
  decision in the long term.                as set out in this report. 
                                          ------------------------------------------- 
 The interests of the company's            The Company values its employees 
  employees.                                and implements training, offers 
                                            development opportunities and has 
                                            in place appropriate incentive 
                                            programs to support their retention. 
                                          ------------------------------------------- 
 The need to foster the company's          The Company spends significant 
  business relationships with suppliers,    effort in reaching out to new and 
  customers and others.                     existing customers and in soliciting 
                                            their feedback following engagements. 
                                          ------------------------------------------- 
 The impact of the company's operations    The Company's operations have minimal 
  on the community and the environment.     impact on the community and environment. 
                                            As a result of COVID-19, home working 
                                            has been implemented so the environmental 
                                            costs of commuting have been further 
                                            reduced. 
                                          ------------------------------------------- 
 The desirability of the company           The Company maintains a high standard 
  maintaining a reputation for high         of business ethics, complying with 
  standards of business conduct.            the QCA code for corporate governance. 
                                          ------------------------------------------- 
 The need to act fairly as between         The Company treats all members 
  members of the company.                   equitably and attempts to ensure 
                                            a timely and accurate flow of information 
                                            to all members. 
                                          ------------------------------------------- 
 

Review of Business

The Company is principally engaged in providing consulting services to pharmaceutical companies in the areas of outsourced quantitative pharmacology and computational biology.

   --        Total income (revenue and grant income) increased 7% to GBP841,649 (2019: GBP783,101) 
   --        The operating loss decreased 33% to GBP134,385 (2019: GBP201,219) 
   --        The loss after taxation decreased 38% to GBP64,424 (2019: GBP104,040) 

-- At 30 June 2020, the surplus of shareholders' funds was GBP1,314,981 (30 June 2019: GBP607,914)

   --        Cash and cash equivalents at 30 June 2020 of GBP1,047,860 (30 June 2019: GBP405,366) 

Consulting Business

Physiomics' consulting business is at the heart of its offering to clients. The Company uses its proprietary Virtual Tumour(TM) software platform but also develops mathematical models from scratch and leverages models in the public domain. It is a combination of our technology and the oncology experience of our team that enables us to be able to deliver clients both a targeted product offering that meets their needs whilst at the same time delivering value for money. We believe that we are unique in offering a combination of:

   --        Deep experience and knowledge of oncology; 
   --        An exclusive focus on model-based approaches to supporting our clients' R&D projects; and 

-- A level of flexibility and responsiveness that is not typically found in larger organisations.

We have continued to develop our brand through a variety of marketing and business development activities including:

-- Expansion of our digital marketing strategy with significantly increased social media activity focused on areas of interest to our clients;

-- Use of a third-party marketing agency to conduct targeted calls to potential new clients, generating a significantly increased volume of potential new business discussions;

-- Despite the virtualisation of conferences this year due to the ongoing COVID pandemic, we have presented at BioTrinity and AACR; and

   --        Development and dissemination of case studies based on actual client projects. 

The Company has been successful in attracting repeat business this year from clients such as Bicycle Therapeutics, CellCentric as well as long-standing client Merck KGaA. The Company has now worked with Merck for over eight years and is in the third year of the major collaboration announced in November 2017.

The Company's clients in this financial year have been located in the USA, UK and Europe. Recent marketing efforts have targeted further business in the USA, where there is a high level of company formation and funding and this has paid off in the form of the recently announced contract with Japan and US-based Astellas Pharma Inc. In terms of the mix of work, we continue to work across the full spectrum of R&D from discovery to development, though we continue to focus increasingly on translational projects involving assets entering clinical development for the first time. This is particularly exciting, as it raises our profile and can involve exposure to regulatory authorities. The Company continues to work in the immuno-oncology space with several of its clients, including the recently announced Astellas Pharma, and it is anticipated that the industry focus on this treatment approach is likely to continue for some time.

Personalised Medicine

The personalised medicine and digital health space continues to generate significant interest from both investors and healthcare systems. Many start-ups in this area focus on the use of genetic markers or the pattern-recognition capabilities of artificial intelligence applications. However, we believe that there is a significant opportunity in the analysis of existing clinical data to identify better ways to treat patient using existing drugs and procedures.

In April 2019, we completed our second Innovate UK funded project in this field in which we developed a demonstration version of a tool to optimise dosing of docetaxel in castrate resistant, metastatic prostate cancer patients. The key outcomes of the project were presented in a poster at the prestigious American Association for Cancer Research Annual Meeting in March 2019. In parallel, working with the Oxford Academic Health Sciences Network, we were able to access some of the UK's leading clinicians in this space which culminated in our being invited to present at an event jointly sponsored by the Royal Marsden Hospital NHS Trust, the Institute of Cancer Research and the National Institute for Health Research. In March 2020, the Company announced a further grant from the NIHR of up to GBP150k which is being used to fund an observational clinical trial at Portsmouth's Technology Trials Unit. The purpose of this trial is to gather additional patient data to validate and further develop the Company's personalised dosing tool. Subject to any restrictions imposed due to COVID 19, the trial is now expected to start in Q4 2020 and will last up to 12 months. In parallel, the Company is focused on finding an appropriate commercial partner to gain any required regulatory approvals to make the tool available in a real-world clinical environment and, to this end, the Company is also in discussion with a company with an established presence in this field.

Strategic and financial performance indicators

The Company is focused on the creation of long-term value for its shareholders.

The Directors consider that the key performance indicators are those that communicate the financial performance and strength of the Company as a whole, these being revenue, profitability, and shareholders' funds. In the last four financial years (from YE June 2017 to YE June 2020) revenues have increased 264%, losses after tax have decreased 84% and net assets increased 301%.

Principal Risks

The Company faces a number of risks on the way to building shareholder value. The Company maintains a risk register that identifies specific risks, their potential impact, their likelihood and mitigating actions. This register is updated as required and on an annual basis as a minimum. Some selected key risks are addressed below.

 
 Risk                Description                           Mitigation 
 Loss of             Currently the business has            In the last two years the Company 
  major customer      a high dependence on a small          has been successful in growing 
                      number of customers. This             its pipeline of business, broadening 
                      leads to the risk that a              its customer base and reducing 
                      large customer could significantly    its reliance on major customers 
                      reduce or cancel its contracts        and has also secured an agreement 
                      with the Company.                     with its major customer Merck 
                                                            KGaA that envisages a multi-year 
                                                            relationship and is currently 
                                                            in its third year. Additionally, 
                                                            the Company has recently signed 
                                                            a further big pharma client, 
                                                            Astellas Pharma Inc., as well 
                                                            as securing repeat contracts 
                                                            with CellCentric and Bicycle. 
                    ------------------------------------  ------------------------------------------- 
 Competition         Physiomics operates in a              Our focus on oncology and the 
  / pricing           competitive environment               way in which we employ Virtual 
  pressure            which could lead to pricing           Tumour(TM) requires a combination 
                      pressure. Whilst the business         of technology and specialised 
                      uses its own proprietary              skills, which we believe is hard 
                      technology a competitor               to replicate. 
                      could attempt to replicate 
                      its Virtual Tumour(TM) technology.    We continually develop our model 
                                                            to improve the scope and applicability 
                                                            of the technology, adding further 
                                                            value to our clients and differentiating 
                                                            our service from our competitors. 
 
                                                            In addition, in the last two 
                                                            years we have developed a personalised 
                                                            medicine offering that we are 
                                                            currently seeking to commercialise 
                                                            and which would help reduce dependency 
                                                            on our consulting business. 
                    ------------------------------------  ------------------------------------------- 
 Personnel           The success and future growth         The Company seeks to recruit, 
  & skills            of the Company is in part             develop, and manage talent on 
                      dependent on the continued            a continuous basis and have built 
                      performance and delivery              a network of contracted specialists 
                      of certain Directors, managers,       who can provide additional resource 
                      key staff and contractors.            when required. 
                      The Company operates in               In order to attract the best 
                      a highly specialised field            talent, the Company offers competitive 
                      where there is strong competition     packages to its staff which includes 
                      for required skills and               a share option scheme, private 
                      talent.                               medical insurance and flexible 
                                                            working. A collegiate working 
                      Key personnel leaving the             environment and opportunities 
                      Company could lead to a               for personal and professional 
                      short-term reduced capacity           development also help to maintain 
                      to service client projects.           staff satisfaction. 
 
                                                            The Company recently took on 
                                                            an intern and is recruiting for 
                                                            a full time position. In both 
                                                            cases a high number of qualified 
                                                            applications have been received. 
                    ------------------------------------  ------------------------------------------- 
 Financial           The financial risks faced             The board addresses financial 
                      by the Company include the            uncertainties by monitoring actual 
                      ability to cover working              performance against internal 
                      capital needs, raise sufficient       projections and responding to 
                      funds to support the Company          significant variances. The Company 
                      through to profitability              also employs tight cost controls 
                      and failure to secure further         across the business and has from 
                      contracts.                            time to time raised funds from 
                                                            investors. 
                      The process of winning major 
                      contracts is typically protracted     The Company seeks to ensure cash 
                      and the Company operates              availability for working capital 
                      in a competitive environment.         purposes and to reduce credit 
                      This means the Company often          risk arising from cash and short 
                      faces significant uncertainties       term deposits with banks and 
                      in its cash flow.                     other financial institutions 
                                                            by holding deposits with an institution 
                                                            with a medium grade credit rating 
                                                            or better. 
                                                            Following completion of the recent 
                                                            fundraise, the Company had cash 
                                                            and cash equivalents of over 
                                                            GBP1.0 million at the year end, 
                                                            which the board believes is sufficient 
                                                            for its current needs and to 
                                                            enable it to increase its marketing 
                                                            spend to expand its client base. 
                    ------------------------------------  ------------------------------------------- 
 Regulation          The Company's customers               The Company regularly reviews 
  Changes             are predominately pharmaceutical      regulations changes through proactive 
                      companies who require outsourced      discussions with key industry 
                      quantitative pharmacology             officials, professional advisors 
                      and computational biology             and regulatory bodies where appropriate. 
                      services. There is a risk 
                      that the business model               Major agencies such as the FDA 
                      is impacted by future changes         are actively promoting the use 
                      in regulations in the medical         of modelling and simulation and 
                      and pharmaceutical industry.          issue advisory papers which set 
                                                            out their thinking. 
                    ------------------------------------  ------------------------------------------- 
 Systems             The Company is dependent              Continuity of access to data 
  & infrastructure    on its IT technical infrastructure    and integrity of data is maintained 
                      and systems for the management        through the implementation of 
                      of its core operations and            a system of data storage, offsite 
                      research and development              backup and monitoring of key 
                      programmes.                           coding and modelling data. In 
                                                            the most recent financial year, 
                                                            the company invested further 
                                                            in a server dedicated to high 
                                                            speed computation which has significantly 
                                                            reduced the time required to 
                                                            complete complex simulations. 
                    ------------------------------------  ------------------------------------------- 
 COVID 19            The current COVID 19 pandemic         Despite some clients experiencing 
                      has far-reaching consequences         delays in clinical trials, there 
                      for many companies.                   has been no appreciable drop 
                                                            off in client commitments to 
                                                            new projects. 
                                                            The Company has also sought to 
                                                            mitigate direct risk of COVID 
                                                            19 infection by implementing 
                                                            home working since March 2020. 
                                                            This has been achieved seamlessly 
                                                            with no discernible impact on 
                                                            business operations. 
 
                                                            The board reviews risks relating 
                                                            to COVID 19 on a monthly basis. 
 
                                                            The Directors have considered 
                                                            and assessed the impact of COVID-19 
                                                            on the Company's projections 
                                                            and cashflows. Taking into account 
                                                            COVID-19, the Directors believe 
                                                            that the Company has sufficient 
                                                            funds to operate for at least 
                                                            12 months from the signing date 
                                                            of these financial statements. 
                    ------------------------------------  ------------------------------------------- 
 

By order of the board

Dr Paul Harper

Chairman

Directors' Report

The Directors submit their report and the audited financial statements of Physiomics Plc for the year ended 30 June 2020.

Results

There was a loss for the year after taxation amounting to GBP64,424 (2019 loss: GBP104,040). In view of accumulated losses, and given the stage of the Company's development, the Directors are unable to recommend the payment of a dividend.

Directors

The directors who served during the year were:

Dr P B Harper

Dr J S Millen

Dr C D Chassagnole

Statement of Directors' responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the financial performance and cash flows of the Company for that year.

The financial statements are required by law, and IFRS as adopted by the EU, to give a true and fair view of the state of affairs of the Company.

In preparing the Company financial statements, the Directors are required to:

   a.     select suitable accounting policies and then apply them consistently; 
   b.     make judgements and estimates that are reasonable and prudent; 

c. state whether in preparation of the financial statements the Company has complied with IFRS as adopted by the EU, subject to any material departures disclosed and explained in the financial statements; and

d. prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006.

They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are also responsible for the maintenance and integrity of the Physiomics Plc website. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions.

Substantial shareholdings

The Company has been informed that as at 22 September 2020, the following shareholders had over 3% interests in the issued ordinary shares of the Company.

 
                       Holding 
                             % 
 Mr Zahid Ali*           5.12% 
 Mr Paul McKillen**      3.08% 
 

* Mr Zahid Ali notified the Company on 10 September 2020 that he held 4,982,142 ordinary shares (which represents a current interest of 5.12% in the Company).

** Mr Paul McKillen notified the Company on the 19 July 2019 that he held 3,000,000 ordinary shares (which represents a current interest of 3.08% in the Company).

On 22 September 2020, Dr Paul Harper held 668,564 ordinary shares, Dr Jim Millen held 1,386,747 ordinary shares and Dr Christophe Chassagnole held 602,723 ordinary shares. The holding percentages were 0.69%, 1.42% and 0.62% respectively.

Directors' remuneration

Details of Directors' remuneration in the year ended 30 June 2020 is set out below:

 
                                                                                 Total     Total 
                       Emoluments   Bonus   Benefits   Pension Contributions      2020      2019 
                              GBP     GBP        GBP                     GBP       GBP       GBP 
 Dr P B Harper             37,000       -          -                       -    37,000    35,500 
 Dr J S Millen            123,500       -      1,647                  10,400   135,547   142,388 
 Dr C D Chassagnole        65,697       -      1,432                   9,062    76,191    76,142 
 Total                    226,196       -      3,079                  19,462   248,738   254,030 
                      -----------  ------  ---------  ----------------------  --------  -------- 
 

Post balance sheet events

The only material post-balance sheet event was the award of a contract by Astellas Pharma Inc. on 31 July 2020.

Statement as to disclosure of information to auditors

The Directors in office on 29 September 2020 have confirmed that, as far as they are aware, there is no relevant audit information of which the auditors are unaware. Each of the Directors have confirmed that they have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that it has been communicated to the auditors.

Going concern, responsibilities and disclosure

After making appropriate enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

Internal controls and risk management

The board is responsible for the Company's system of internal control and risk management and for reviewing its effectiveness. The Directors have a reasonable expectation that the Company will safeguard the Company's assets. The risk management process and internal control systems are designed to manage rather than eliminate the risk of failing to achieve business objectives and can only provide reasonable, but not absolute, assurance against material misstatement or loss. The key features of the Company's system of internal control are as follows:

   --          a clearly defined organisational structure and set of objectives; 

-- the executive Directors play a significant role in the day to day operation of the business; and

-- detailed monthly management accounts are produced for the board to review and take appropriate action.

Annual General Meeting

The Company is closely monitoring the COVID-19 situation, including UK Government guidance and will continue to do so in the lead up to the AGM. The health of our shareholders, employees and stakeholders remains extremely important to us and accordingly, the board has taken into consideration the current UK government stay at home measures as well as ICSA guidance. Should these directives remain in place up to the AGM, shareholders, advisors and other guests will not be allowed to attend the AGM in person and anyone seeking to attend the meeting will be refused entry. As such, shareholders should note they are not entitled to attend the AGM in person unless notified otherwise via the Company's website at www.physiomics.co.uk .

Shareholders are requested to therefore submit their votes, in respect of the business to be discussed, via proxy as early as possible. Shareholders should appoint the Chair of the meeting as their proxy. If a shareholder appoints someone else as their proxy, that proxy will not be able to attend the meeting in person or cast the shareholder's vote.

The business at the AGM will be curtailed to the formal business section only, with no wider presentations on business performance or Q&A. If any shareholder has a question they would like to pose to the board, this should be submitted to the Chair via info@physiomics.co.uk. In addition, as detailed in our announcement of 23 September 2020, the Company will be holding an investor presentation at 11.00 a.m. on 5 October 2020. Please see this announcement for details of how to register for this event.

In the event that further disruption to the 2020 AGM becomes unavoidable, we will announce any changes to the meeting (such as timing or venue). The website also provides links to the annual report and accounts, interim results and other relevant announcements immediately after they have been made available via RNS.

The Annual General Meeting of the Company will be held at the offices of Physiomics Plc, The Magdalen Centre, Oxford Science Park, Oxford OX4 4GA at 10.00 a.m. on 17 November 2020.

By order of the board

Dr Paul Harper, Chairman

Independent Auditors' Report to the Members of Physiomics Plc

Opinion

We have audited the financial statements of Physiomics Plc for the year ended 30 June 2020 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the cash flow statement, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

In our opinion:

-- the financial statements give a true and fair view of the state of the Company's affairs as at 30 June 2020 and of its loss for the year then ended;

-- the financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; and

-- the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

-- the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-- the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Our assessment of risks of material misstatement

The assessed risks of material misstatement described below are those that had the greatest effect on our audit strategy, the allocation of resources in the audit and directing the efforts of the engagement team.

 
 Risk                                  How the Scope of our audit responded 
                                        to the risk 
 Management override of controls        We examined journals posted around 
  Journals can be posted that            the year end, specifically focusing 
  significantly alter the Financial      on areas which are more easily manipulated 
  Statements.                            such as accruals, prepayments, investment 
                                         valuation and the bank reconciliation. 
                                      ------------------------------------------------ 
 Going Concern and COVID-19             We reviewed the Directors' assessment 
  There is a risk that the Company       of the risks and impacts of COVID-19 
  is not a going concern and have        on the business. We compared this 
  been impacted from COVID-19            assessment to our own understanding 
  materially.                            of the risks, and the nature of the 
                                         Company's operations and customer 
                                         base. We then conducted a review of 
                                         going concern in respect of COVID-19, 
                                         which included reviewing forecasts 
                                         and current trading performance, and 
                                         carrying out stress testing. The work 
                                         undertaken considered a period of 
                                         at least 12 months from the date of 
                                         approving these financial statements. 
                                         The disclosures in the financial statements 
                                         adequately reflect the Directors' 
                                         conclusions around the uncertainties 
                                         and impact of COVID-19 and, that the 
                                         going concern assumption remains appropriate. 
                                      ------------------------------------------------ 
 Fraud in Revenue Recognition           Income was tested on a sample basis 
  There is a risk that revenue           from contracts. No evidence of fraud 
  is materially understated due          or other understatement was identified. 
  to fraud. 
                                      ------------------------------------------------ 
 Accounting Estimates                   All areas were examined to identify 
  Potential risk of inappropriate        any potential accounting estimates. 
  accounting estimates giving            These estimates were then reviewed 
  rise to misstatement in the            and tested for adequacy. 
  accounts. 
                                      ------------------------------------------------ 
 Overstatement of Administrative        A proof in total calculation and substantive 
  Expenses                               testing were both undertaken and no 
  There is a risk that the Company's     evidence of overstatement was identified. 
  administrative expenses are 
  overstated. 
                                      ------------------------------------------------ 
 Grant Income                           Grant income was reviewed and a sample 
  There is a risk that grant income      basis from contracts. No evidence 
  may be materially misstated.           of misstatement was identified. 
                                      ------------------------------------------------ 
 

Our audit procedures relating to these matters were designed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Our application of materiality

We define materiality as the magnitude of misstatement in the Financial Statements that of materiality makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning and in the scope of our audit work and in evaluating the results of our work.

We determined materiality for the Company to be GBP16,560. We agreed with the Audit Committee that we would report to them all audit differences in excess of 5% of materiality, as well as differences below that which would, in our view, warrant reporting on a qualitative basis. We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the Financial Statements.

An overview of the scope of our audit

An audit involves obtaining evidence about the amounts and disclosures in the Financial Statements sufficient to give reasonable assurance that the Financial Statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the Financial Statements. In addition we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited Financial Statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatement or inconsistencies we consider the implications for our report.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

-- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

   --      the financial statements are not in agreement with the accounting records and returns; or 
   --      certain disclosures of directors' remuneration specified by law are not made; or 
   --      we have not received all the information and explanations we require for our audit. 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement set out on page 16 of the full annual report, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Our responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements in located on the Financial Reporting Council's website at www.frc.org.uk/auditorsreponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the Company's members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Benjamin Bidnell (Senior Statutory Auditor)

For and on behalf of Shipleys LLP,

Chartered Accountants and Statutory Auditor

10 Orange Street

Haymarket

London WC2H 7DQ

Income Statement for the year ended 30 June 2020

 
                                                   Year       Year 
                                                  ended      ended 
                                                30 June    30 June 
                                                   2020       2019 
                                       Notes        GBP        GBP 
Revenue                               3         799,055    718,965 
Other operating income                3          42,594     64,136 
Total income                                    841,649    783,101 
 
Net operating expenses                        (976,034)  (984,320) 
Operating loss                        4       (134,385)  (201,219) 
Finance Income                        7             679        470 
Loss before taxation                          (133,706)  (200,749) 
Income tax income                     9          69,282     96,709 
                                              ---------  --------- 
Loss for the year attributable 
 to equity shareholders              26        (64,424)  (104,040) 
                                              =========  ========= 
 
 
Earnings per share (shown 
 in pence)                   10 
Basic                            (0.09)p  (0.14)p 
Diluted                          (0.09)p  (0.14)p 
 

Statement of Comprehensive Income

 
                                                Year ended  Year ended 
                                                   30 June     30 June 
                                                      2020        2019 
                                                       GBP         GBP 
Loss for the year                                 (64,424)   (104,040) 
Other comprehensive income                               -           - 
Total comprehensive income/ (expense) for the 
 year                                             (64,424)   (104,040) 
Attributable to: 
Equity holders                                    (64,424)   (104,040) 
 

Statement of Financial Position as at 30 June 2020

 
                                                      2020         2019 
Non-current assets -                    Notes          GBP          GBP 
Intangible assets                       12           3,864        1,373 
Property, plant and equipment           13          11,536       18,438 
Investments                             14               -            - 
                                               -----------  ----------- 
                                                    15,400       19,811 
                                               -----------  ----------- 
Current assets 
Trade and other receivables             15         383,238      269,110 
Cash and cash equivalents                        1,047,860      405,366 
                                               -----------  ----------- 
                                                 1,431,098      674,476 
                                               -----------  ----------- 
Total assets                                     1,446,498      694,287 
                                               -----------  ----------- 
 
  Current liabilities 
  Trade and other payables                19       123,819       85,123 
Deferred revenue                        20           7,698        1,250 
                                               -----------  ----------- 
                                                   131,517       86,373 
                                               -----------  ----------- 
Net current assets                               1,299,581      588,103 
                                               -----------  ----------- 
Net assets                                       1,314,981      607,914 
                                               ===========  =========== 
 
  Equity 
Called up share capital                 23       1,275,752    1,181,038 
Share premium account                   24       5,896,737    5,228,172 
Other reserves                          25         199,954      191,742 
Retained earnings                       26     (6,057,462)  (5,993,038) 
                                               -----------  ----------- 
Total equity                                     1,314,981      607,914 
                                               ===========  =========== 
 

Statement of Changes in Equity for the year ended 30 June 2020

 
                                          Share       Share     Share-based      Retained          Total 
                                        capital     premium   com-pensation      earnings 
                                                    account      on reserve 
                              Notes         GBP         GBP             GBP           GBP                  GBP 
 
 Balance at 1 July 2018               1,181,038   5,228,172         169,814   (5,888,998)              690,026 
 
 Loss and total 
 comprehensive 
Income/(expense) for 
 the year                                     -           -               -     (104,040)            (104,040) 
Issue of share capital 
 (net of costs)                23             -           -               -             -                    - 
Transfer to other 
 reserves                      25             -           -          21,928             -               21,928 
                                     ----------  ----------  --------------  ------------  ------------------- 
Balance at 30 June 
 2019                                 1,181,038   5,228,172         191,742   (5,993,038)              607,914 
                                     ----------  ----------  --------------  ------------  ------------------- 
 
  Loss and total 
  comprehensive 
  income/ (expense) for 
  the year                                    -           -               -      (64,424)             (64,424) 
Issue of share capital 
 (net of costs)                23        94,714     668,565               -             -              763,279 
Transfer to other 
 reserves                      25             -           -           8,212             -                8,212 
                                     ----------  ----------  --------------  ------------  ------------------- 
Balance at 30 June 
 2020                                 1,275,752   5,896,737         199,954   (6,057,462)            1,314,981 
                                     ==========  ==========  ==============  ============  =================== 
 

Cash Flow Statement for the year ended 30 June 2020

 
 
                                                     2020                     2019 
                                    Notes      GBP          GBP         GBP             GBP 
Cash flows from operating 
 activities 
Cash absorbed by operations          33                  (200,008)                (226,244) 
Tax refunded                                                83,638                   82,472 
                                                       -----------              ----------- 
Net cash outflow from operating 
 activities                                              (116,370)                (143,772) 
Investing activities 
Purchase of intangible assets                 (2,913)                  (1,385) 
Purchase of tangible fixed 
 assets                                       (2,181)                 (21,816) 
Interest received                                 679                      470 
                                           ----------               ---------- 
Net cash used in investing 
 activities                                                (4,415)                 (22,731) 
Financing activities 
Proceeds from issue of shares                 828,750                        - 
Share issue costs                            (65,471)                        - 
                                           ----------               ---------- 
Net cash generated from financing 
 activities                                                763,279                        - 
                                                       -----------              ----------- 
Net increase in cash and 
 cash equivalents                                          642,494                (166,503) 
Cash and cash equivalents 
 at beginning of year                                      405,366                  571,869 
                                                       -----------              ----------- 
Cash and cash equivalents 
 at end of year                                          1,047,860                  405,366 
                                                       ===========              =========== 
 

Notes to the Financial Statements

   1       Accounting policies 

Company information

Physiomics Plc is a company limited by shares incorporated in England and Wales. The registered office is The Magdalen Centre, Oxford Science Park, Robert Robinson Avenue, Oxford, OX4 4GA. The Company's ordinary shares of 0.4p each are admitted to trading on the AIM market of the London Stock Exchange plc.

   1.1    Accounting convention 

The financial statements have been prepared in accordance with International Financial Reporting

Standards (IFRS) as adopted for use in the European Union and with those parts of the Companies Act

2006 applicable to companies reporting under IFRS, except as otherwise stated.

The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set out below.

   1.2    Going concern 

The accounts have been prepared on the going concern basis. The Company primarily operates in the relatively defensive pharmaceutical industry which the board expects to be less affected by current economic conditions, including the potential consequences of Brexit, compared to other industries.

The Company had GBP1,047,860 of cash and cash equivalents as at 30 June 2020 (2019 GBP405,366).

The board operates an investment policy under which the primary objective is to invest in low-risk cash or cash equivalent investments to safeguard the principal.

The Company's projections, taking into account anticipated revenue streams, show that the Company has sufficient funds to operate for at least the next 12 months. In coming to this conclusion, the board notes that current cash and currently contracted projects are projected to more than cover budgeted expenses for this period.

After reviewing the Company's projections, the Directors believe that the Company is adequately placed to manage its business and financing risks for the next twelve months. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.

   1.3    Revenue recognition 

The revenue shown in the income statement relates to amounts received or receivable from the provision of services associated with outsourced systems and computational biology services to pharmaceutical companies.

Revenue from the provision of the principal activities is recognised by reference to the stage of completion of the transaction at the balance sheet date where the amount of revenue can be measured reliably and sufficient work has been completed with certainty to ensure that the economic benefit will flow to the Company.

   1.4    Intangible assets other than goodwill 

Intangible assets acquired separately from third parties are recognised as assets and measured at cost.

Following initial recognition, intangible assets are measured at cost or fair value at the date of acquisition less any amortisation and any impairment losses. Amortisation costs are included within the net operating expenses disclosed in the income statement.

Intangible assets are amortised over their useful lives as follows:

 
                        Useful life   Method 
 Patents and licenses   15 years      Straight line 
 Trademarks             10 years      Straight line 
 

Useful lives are also examined on an annual basis and adjustments, where applicable are made on a prospective basis. The Company does not have any intangible assets with indefinite lives.

   1.5    Tangible fixed assets 

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

   Fixtures and fittings                                      3 years straight line 
   IT Equipment                                              3 years straight line 

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset and is recognised in the profit and loss account.

   1.6    Research and development expenditure 

Expenditure on research activity is recognised as an expense in the period in which it is incurred.

   1.7    Impairment of tangible and intangible assets 

Property, plant and equipment and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For purposes of assessing impairment, assets that do not individually generate cash flows are assessed as part of the cash generating unit to which they belong. Cash generating units are the lowest levels for which there are cash flows that are largely independent of the cash flows from other assets or groups of assets.

   1.8    Fair value measurement 

IFRS 13 establishes a single source of guidance for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The resulting calculations under IFRS 13 affected the principles that the Company uses to assess the fair value, but the assessment of fair value under IFRS 13 has not materially changed the fair values recognised or disclosed. IFRS 13 mainly impacts the disclosures of the Company. It requires specific disclosures about fair value measurements and disclosures of fair values, some of which replace existing disclosure requirements in other standards.

   1.9    Cash and cash equivalents 

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less.

1.10 Financial assets

Financial assets are recognised in the Company's statement of financial position when the Company becomes party to the contractual provisions of the instrument.

Financial assets are classified into specified categories. The classification depends on the nature and purpose of the financial assets and is determined at the time of recognition.

Financial assets are initially measured at fair value plus transaction costs, other than those classified as fair value through the income statement, which are measured at fair value.

Trade and other receivables

Trade receivables are recognised and carried at the lower of their original invoiced value and recoverable amount. Balances are written off when the probability of recovery is considered to be remote.

Impairment of financial assets

Financial assets, other than those at fair value through the income statement, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

1.11 Financial liabilities

Financial liabilities are classified as either financial liabilities at fair value through the income statement or other financial liabilities.

Financial liabilities are classified according to the substance of the contractual arrangements entered into.

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the Company's obligations are discharged, cancelled, or they expire.

1.12 Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.

1.13 Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the Company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.14 Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.

Termination benefits are recognised immediately as an expense when the Company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.15 Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as

they fall due.

1.16 Share-based payments

The Company issues equity settled share-based payments to certain employees. Equity settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period. Fair value is measured by use of a Black-Scholes model.

1.17 Leases

At inception, the Company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the Company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within tangible fixed assets, apart from those that meet the definition of investment property.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish, or restore the underlying asset and the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other tangible fixed assets. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

In the comparative period, as a lessee applying IAS 17, the company classified leases as finance leases whenever the terms of the lease transferred substantially all the risks and rewards of ownership to the lessees. All other leases were classified as operating leases. Assets held under finance leases were recognised as assets at the lower of the assets' fair value at the date of inception and the present value of the minimum lease payments. The related liability was included in the balance sheet as a finance lease obligation. Lease payments were treated as consisting of capital and interest elements and the interest was charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability. Rentals payable under operating leases, less any lease incentives received, were charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis was more representative of the time pattern in which economic benefits from the leased asset were consumed.

1.18 Government grants

Government grants are recognised when there is reasonable assurance that the grant conditions will be met and the grants will be received.

Government grants of a revenue nature are credited to the profit and loss account in the same period as the related expenditure.

1.19 Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the income statement for the period.

1.20 Segment reporting

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and return that are different from those of segments operating in other economic environments.

   2       Critical accounting estimates and judgements 

Revenue for projects started and completed during the financial year is recognised in full during the year. Revenue from a project which commences in one financial year and is completed in a subsequent financial year is recognised over the life of the project based on the expected period to completion as anticipated at each balance sheet date less what has already been recognised during a previous financial period or periods.

There were no other material accounting estimates or areas of judgements required.

   3       Revenue & segmental reporting 

An analysis of the Company's revenue is as follows:

 
                              2020      2019 
                               GBP       GBP 
 
 Revenue                   799,055   718,965 
                          ========  ======== 
 
 Other operating income 
 Grant income               42,594    64,137 
                            42,594    64,137 
                          ========  ======== 
 

The principal activities are the provision of outsourced systems and computational biology services to pharmaceutical companies.

This activity comprises a single segment of operation of a sole UK base and entirely UK based assets. Revenue was derived in the UK, European Union and USA (2019: UK, European Union and USA) from its principal activity.

   4       Operating loss 
 
                                                                             2020      2019 
                                                                              GBP       GBP 
   Operating loss for the period is stated after charging/(crediting): 
   Net foreign exchange losses/(gains)                                        169     (276) 
   Research and development costs                                               -         - 
   Government grants                                                     (42,594)  (64,137) 
   Fees paid to the Company's auditor, refer to below                      14,000    14,433 
   Depreciation of property, plant and equipment                            9,083     8,381 
   Amortisation of intangible assets                                          422        12 
   Share-based payments                                                     8,212    21,928 
                                                                         ========  ======== 
 
   5       Auditors remuneration 
 
 
                                                                2020      2019 
    Fees payable to the Company's auditor and associates:        GBP       GBP 
    For audit services 
     Audit of the Company's financial statements              10,000    10,000 
                                                            ========  ======== 
    For other services 
     Taxation compliance services                              2,000     2,000 
    Audit-related assurance services                               -         - 
    Other taxation services                                    2,000     1,183 
    Innovate UK grant related services                             -     1,250 
                                                            --------  -------- 
    Total fees                                                14,000    14,433 
                                                            ========  ======== 
 
   6       Employees 

The average monthly number of persons (including directors) employed by the Company during the year was:

 
                                                   2020          2019 
                                                 Number        Number 
                                                      7             7 
                                            ===========  ============ 
 
 
  Their aggregate remuneration comprised:          2020          2019 
                                                    GBP           GBP 
Wages and salaries                              408,051       420,315 
Social security costs                            44,785        48,361 
Other pension and insurance benefit costs        35,636        22,662 
                                            -----------  ------------ 
                                                488,472       491,338 
                                            ===========  ============ 
 

Details of the remuneration of Directors are included in the Directors Report.

   7       Finance income 
 
                  2020  2019 
                   GBP   GBP 
Interest income 
Bank deposits      679   470 
                  ====  ==== 
 
   8          Finance costs 

Interest rate risk

The Company finances its operations by cash and short-term deposits. The Company's policy on interest rate management is agreed at board level and is reviewed on an ongoing basis. Other creditors, accruals and deferred revenue values do not bear interest.

Interest rate profile

The Company had no bank borrowings at the 30 June 2020 and 30 June 2019.

   9       Income tax expense 
 
                                                             Continuing operations 
                                                                  2020        2019 
                                                                   GBP         GBP 
Current tax 
 Research and development tax credit: current year            (81,786)    (96,142) 
Adjustment in respect of prior years' research 
 and development                                                12,504       (567) 
                                                     -----------------  ---------- 
                                                              (69,282)    (96,709) 
                                                     =================  ========== 
 
  The charge for the year can be reconciled to the loss per the 
  income statement as follows: 
                                                                  2020        2019 
                                                                   GBP         GBP 
Loss before taxation                                         (133,706)   (200,749) 
                                                     =================  ========== 
 
  Expected tax charge based on a corporation tax 
  rate of 19.00%                                              (25,404)    (38,142) 
Expenses not deductible in determining taxable 
 profit                                                          1,271       4,645 
Unutilised tax losses carried forward                                -           - 
Adjustment in respect of prior years' research 
 and development                                                12,504       (567) 
Research and development expenditure tax credit               (81,786)     (7,280) 
Deferred / (accelerated) capital allowances                      1,562     (2,613) 
Research and development enhancement                          (48,254)    (52,752) 
Research and development enhancement                            70,825           - 
                                                     -----------------  ---------- 
Tax charge for the period                                     (69,282)    (96,709) 
                                                     =================  ========== 
 

At 30 June 2020 tax losses of GBP3,846,025, (2019: GBP3,811,775) remained available to carry forward against future taxable trading profits. These amounts are in addition to any amounts surrendered for Research and Developments tax credits. There is an unrecognised deferred tax asset of GBP729,527, (2019: GBP648,002).

   10     Earnings per share 
 
                                                                2020          2019 
                                                                 GBP           GBP 
Number of shares 
 Weighted average number of ordinary shares for 
 basic earnings per share                                 73,721,869    71,910,394 
Earnings - Continuing operations 
 Loss for the period from continued operations              (64,424)     (104,040) 
                                                        ------------  ------------ 
Earnings for basic and diluted earnings per share 
 being net profit attributable to equity shareholders 
 of the Company for continued operations                    (64,424)     (104,040) 
                                                        ============  ============ 
 
 
Earnings per share for continuing operations 
 Basic and diluted earnings per share (shown in 
 pence)                                             (0.09)    (0.14) 
Basic and diluted earnings per share 
 From continuing operations (shown in pence)        (0.09)    (0.14) 
                                                  --------  -------- 
                                                    (0.09)    (0.14) 
                                                  ========  ======== 
 

The loss attributable to equity holders (holders of ordinary shares) of the Company for the purpose of calculating the fully diluted loss per share is identical to that used for calculating the loss per share. The exercise of share options would have the effect of reducing the loss per share and is therefore anti- dilutive under the terms of IAS 33 'Earnings per Share'.

   11     Financial instruments recognised in the statement of financial position 
 
                                                        2020       2019 
     Held for trading:                                   GBP        GBP 
   Current financial assets 
    Trade and other receivables                       78,863    107,622 
   Cash and cash equivalents                       1,047,860    405,366 
                                                   ---------  --------- 
                                                   1,126,723    512,988 
                                                   =========  ========= 
   Current financial liabilities Trade and other 
    payables                                         109,029     70,626 
   Deferred revenue                                    7,698      1,250 
                                                   ---------  --------- 
                                                     116,727     71,876 
                                                   =========  ========= 
 

The Company's financial instruments comprise cash and short-term deposits. The Company has various other financial instruments, such as trade debtors and creditors that arise directly from its operations.

The main risks arising from the Company's financial instruments are interest rate risk, liquidity risk and foreign currency risk. The policies for managing these are periodically reviewed and agreed by the board.

It is and has been throughout the year under review, the Company's policy that no trading in financial instruments shall be undertaken.

   12     Intangible assets 
 
                                             Trademarks      Patents   Total 
                                                          & Licenses 
                                                    GBP          GBP     GBP 
   Cost 
   At 1 July 2018                                     -       75,646  75,646 
                                 ----------------------  -----------  ------ 
   At 30 June 2019                                1,385            -   1,385 
   Additions - purchased                          2,913            -   2,913 
   Disposals                                          -            -       - 
                                 ----------------------  -----------  ------ 
   At 30 June 2020                                4,298            -   4,298 
                                 ----------------------  -----------  ------ 
   Amortisation and impairment 
   At 1 July 2018                                     -       75,646  75,646 
                                 ----------------------  -----------  ------ 
   At 30 June 2019                                   12            -      12 
   Charge for the year                              422            -     422 
   Eliminated on disposals                            -            -       - 
                                 ----------------------  -----------  ------ 
   At 30 June 2020                                  434            -     434 
                                 ----------------------  -----------  ------ 
   Carrying amount 
   At 30 June 2020                                3,864            -   3,864 
                                 ======================  ===========  ====== 
   At 30 June 2019                                1,373            -   1,373 
                                 ======================  ===========  ====== 
 
   13     Tangible fixed assets 
 
                                                 Fixtures 
                                             and fittings   IT equipment     Total 
 Cost                                                 GBP            GBP       GBP 
 At 1 July 2018                                     2,206         43,400    45,606 
 Additions                                          1,154         20,662    21,816 
 Disposals                                          (411)        (7,525)   (7,936) 
                                           --------------  -------------  -------- 
 At 30 June 2019                                    2,949         56,537    59,486 
                                           --------------  -------------  -------- 
 Additions                                             79          2,102     2,181 
 Disposals                                              -              -         - 
                                           --------------  -------------  -------- 
 At 30 June 2020                                    3,028         58,640    61,668 
                                           --------------  -------------  -------- 
 
 Accumulated depreciation and impairment 
 At 1 July 2018                                     2,206         38,397    40,603 
 Charge for the year                                   96          8,285     8,381 
 Eliminated on disposal                             (411)        (7,525)   (7,936) 
                                           --------------  -------------  -------- 
 At 30 June 2019                                    1,891         39,157    41,048 
                                           --------------  -------------  -------- 
 Charge for the year                                  408          8,675     9,083 
 Eliminated on disposal                                 -              -         - 
                                           --------------  -------------  -------- 
 At 30 June 2020                                    2,300         47,832    50,132 
                                           --------------  -------------  -------- 
 
 Carrying amount 
 At 30 June 2020                                      728         10,808    11,536 
                                           --------------  -------------  -------- 
 At 30 June 2019                                    1,058         17,380    18,438 
                                           --------------  -------------  -------- 
 At 30 June 2018                                        -          5,003     5,003 
                                           --------------  -------------  -------- 
 
   14     Investments 
 
                               Current           Non-current 
                                2020     2019      2020     2019 
                                 GBP      GBP       GBP      GBP 
 Investment in subsidiaries         -         -        -        1 
 Impairment of investment           -         -        -      (1) 
                              -------   -------   ------   ------ 
       -         -          -                                  - 
 =======   =======   ========                             ====== 
 

The Company owned 100% of E-Phen Limited, a dormant company incorporated in the England and Wales. E-Phen Limited was dissolved on 7 September 2019.

The Company has not designated any financial assets that are not classified as held for trading as financial assets at fair value through profit or loss.

   15     Trade and other receivables 
 
                                    Due within one year 
                                         2020       2019 
                                          GBP        GBP 
  Trade debtors                        75,085    103,844 
  Other receivables                     3,778      3,778 
  Corporation tax recoverable          81,786     96,142 
  VAT recoverable                      10,475     22,518 
  Prepayments and accrued income      212,114     42,828 
                                   ----------  --------- 
                                      383,238    269,110 
                                   ==========  ========= 
 
   16     Fair value of trade receivables 

There are no material differences between the fair value of financial assets and the amount at which they are stated in the financial statements.

   17     Fair value of financial liabilities 

There are no material differences between the fair value of financial liabilities and the amount at which they are stated in the financial statements.

   18     Liquidity risk 

The Company seeks to manage financial risk by ensuring that sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.

   19     Trade and other payables 
 
                                        Due within one year 
                                              2020      2019 
                                               GBP       GBP 
  Trade creditors                           27,932    26,479 
  Accruals and deferred income              78,618    41,712 
  Social security and other taxation        14,790    14,497 
  Other creditors                            2,479     2,435 
                                           123,819    85,123 
                                       ===========  ======== 
 
   20     Deferred revenue 
 
                                      2020   2019 
                                       GBP    GBP 
  Arising from invoices in advance   7,698  1,250 
                                     =====  ===== 
 

Analysis of deferred revenue

Deferred revenues are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

 
                         2020   2019 
                          GBP    GBP 
  Current liabilities   7,698  1,250 
                        =====  ===== 
 
   21     Retirement benefit schemes 

Defined contribution schemes

The Company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the Company in an independently administered fund.

The total costs charged to income in respect of defined contribution plans is GBP29,719 (2019: GBP16,334).

As at the statement of financial position date the Company had unpaid pension contributions totalling GBP2,479 (2019: GBP2,435).

   22     Share-based payment transactions 

The Company operates two share option schemes: (1) under the Enterprise Management Initiative Scheme ("EMI") and (2) an unapproved share option scheme. Both are equity settled. Options are granted with a fixed exercise price equal to the market price of the shares under option at the date of grant. Some options are subject to performance criteria relating to either share price performance or the achievement of certain corporate milestones. The contractual life of the options is 10 years from the date of issue.

A summary of the options at the start and end of period for directors and all other employees is presented in the following table:

 
                              Outstanding                               Granted                            Forfeited                        Exercised                     Outstanding                     Exercisable                    Exercise             Date 
                                at start                                 during                              during                           during                         at end                          at end                        price                of        Date 
 Holder                         of period                                period                              period                           period                       of period                        of period                       (p)               grant     of expiry 
 Dr. C. 
  Chassagnole                                    118,565                                   -                             118,565                             -                               -                                -                     40.00   28-Feb-10   28-Feb-20 
 Dr. C. 
  Chassagnole                                     32,331                                   -                                   -                             -                          32,331                           16,166                     34.00   09-Nov-11   09-Nov-21 
 Dr. C. 
  Chassagnole                                    129,381                                   -                                   -                             -                         129,381                          129,381                     13.20   11-Feb-13   11-Feb-23 
 Dr. C. 
  Chassagnole                                    322,615                                   -                                   -                             -                         322,615                          322,615                      6.20   24-Mar-15   24-Mar-25 
 Dr. C. 
  Chassagnole                                    659,641                                   -                                   -                             -                         659,641                          659,641                      2.50   28-Feb-17   28-Feb-27 
 Dr. C. 
  Chassagnole                                    350,000                                   -                                   -                             -                         350,000                          350,000                      5.35   26-Mar-18   26-Mar-28 
 Dr. C. 
  Chassagnole                                    267,000                                   -                                   -                             -                         267,000                          267,000                      3.16   26-Mar-19   26-Mar-29 
 Dr. J. 
  Millen                                       1,453,923                                   -                                   -                             -                       1,453,923                        1,453,923                      2.50   28-Feb-17   28-Feb-27 
 Dr. J. 
  Millen                                         520,000                                   -                                   -                             -                         520,000                          520,000                      5.35   26-Mar-18   26-Mar-28 
 Dr. J. 
  Millen                                         400,000                                   -                                   -                             -                         400,000                          400,000                      3.16   26-Mar-19   26-Mar-29 
 Dr. P. 
  Harper                                          76,645                                   -                              76,645                             -                               -                                -                     40.00   28-Feb-10   28-Feb-20 
 Dr. P. 
  Harper                                          12,932                                   -                                   -                             -                          12,932                            6,466                     34.00   09-Nov-11   09-Nov-21 
 Dr. P. 
  Harper                                          51,752                                   -                                   -                             -                          51,752                           51,752                     13.20   11-Feb-13   11-Feb-23 
 Dr. P. 
  Harper                                         129,046                                   -                                   -                             -                         129,046                          129,046                      6.20   24-Mar-15   24-Mar-25 
 Dr. P. 
  Harper                                         258,092                                   -                                   -                             -                         258,092                          258,092                      3.50   21-Dec-15   21-Dec-25 
 Dr. P. 
  Harper                                         140,000                                   -                                   -                             -                         140,000                          140,000                      5.35   26-Mar-18   27-Mar-28 
 Other staff                                      41,648                                   -                              41,648                             -                               -                                -                     40.00   28-Feb-10   28-Feb-20 
 Other staff                                      91,107                                   -                                   -                             -                          91,107                           45,554                     34.00   09-Nov-11   09-Nov-21 
 Other staff                                      77,628                                   -                                   -                             -                          77,628                           77,628                     13.20   11-Feb-13   11-Feb-23 
 Other staff                                     188,605                                   -                                   -                             -                         188,605                          188,605                      6.20   24-Mar-15   24-Mar-25 
 Other staff                                      54,596                                   -                                   -                             -                          54,596                           54,596                      3.50   21-Dec-15   21-Dec-25 
 Other staff                                     403,781                                   -                                   -                             -                         403,781                          403,781                      2.50   28-Feb-17   28-Feb-27 
 Other staff                                     490,000                                   -                                   -                             -                         490,000                          490,000                      5.35   26-Mar-18   26-Mar-28 
 Other staff                                     533,000                                   -                                   -                             -                         533,000                          533,000                      3.16   26-Mar-19   26-Mar-29 
 Total                                         6,802,288                                   -                             236,858                             -                       6,565,430                        5,297,245 
               -----------------------------------------  ----------------------------------  ----------------------------------  ----------------------------  ------------------------------  ------------------------------- 
 

The weighted average share price at the date of the grant for share options granted in the year was GBPNil as no share options were granted during the current year (2019: GBP0.0316).

The options outstanding at 30 June 2020 had an exercise price ranging from GBP0.025 to GBP0.40, and a remaining contractual life of 8 years.

During 2020, no options were granted. Options vest according to time and performance-based criteria.

During 2019, options were granted on 26 March 2019. The weighted average fair value of the options on the measurement date was GBP0.011366. Options vest according to time and performance-based criteria.

The options were granted with an exercise price of GBP0.032.

Fair value was measured using Black-Scholes share option pricing model. Inputs were as follows:

 
                              2020        2019 
  Expected volatility       60.18%      60.18% 
  Expected life         2.34 years  2.34 years 
  Risk free rate            0.664%      0.664% 
 

The expected volatility is based on the sixty day average historical volatility of the Company over 3 years.

The expected life of options is now based on the share option exercise history with the company. The risk free rate of return is derived from UK treasury yields at 2 and 3 years.

Total expenses of GBP8,212 related to equity settled share-based payment transactions were recognised in the year. (2019 -GBP21,928).

   23     Share capital 
 
                                                           2020       2019 
                                                            GBP        GBP 
Ordinary share capital, issued and fully paid 
95,588,965 Ordinary of 0.4p each (2019: 71,910,394)     382,355    287,641 
2,481,657,918 Deferred of 0.036p each                   893,397    893,397 
                                                      ---------  --------- 
                                                      1,275,752  1,181,038 
                                                      =========  ========= 
 

The ordinary shares carry no rights to fixed income. The deferred shares have no voting rights and have no rights to receive dividends or other income.

 
Reconciliation of movements during the year:   Ordinary    Deferred Number 
                                                Number 
At 1 July 2019                                 71,910,394    2,481,657,918 
Issue of fully paid shares                     23,678,571                - 
At 30 June 2020                                95,588,965    2,481,657,918 
                                               ==========  =============== 
 

Current year changes to Ordinary share capital

On 3 June 2020, the Company issued 23,678,571 ordinary shares of 0.4p at a price of 3.5p per ordinary share for working capital purposes.

   24     Share premium account 
 
                                                GBP 
At 30 June 2018 & at 30 June 2019         5,228,172 
Issue of new shares                         734,036 
Share issue expenses                       (65,471) 
                                     -------------- 
At 30 June 2020                           5,896,737 
                                     ============== 
 

The share premium account consists of proceeds from the issue of shares in excess of their par value (which is included in the share capital account).

   25     Other reserves: share-based compensation reserve 
 
                            GBP 
At 30 June 2018         169,814 
Additions                21,928 
                   ------------ 
 
At 30 June 2019         191,742 
Additions                 8,212 
                   ------------ 
 
At 30 June 2020         199,954 
                   ============ 
 

The share-based compensation reserve represents the credit arising on the charge for share options calculated in accordance with IFRS 2.

   26     Retained earnings 
 
                                    GBP 
At 1 July 2018              (5,888,998) 
Loss for the period           (104,040) 
                       ---------------- 
 
At 30 June 2019             (5,993,038) 
Loss for the period            (64,424) 
                       ---------------- 
 
At 30 June 2020             (6,057,462) 
                       ================ 
 

Retained earnings includes an amount of GBP237,889 (2019: GBP237,889) in relation to the Equity Swap Agreement in 2014 which under the Companies Act is not distributable.

   27     Operating lease commitments 

Lessee

Amounts recognised in the income statement as an expense during the period in respect of operating lease arrangements are as follows:

 
                                                         2020           2019 
                                                          GBP            GBP 
Minimum lease payments under operating leases          59,293         57,331 
                                                =============  ============= 
 

At the reporting end date, the Company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

 
                          2020          2019 
                           GBP           GBP 
Within one year          6,013         4,818 
                  ------------  ------------ 
                         6,013         4,818 
                  ============  ============ 
 
   28     Capital commitments 

At 30 June 2020 and 30 June 2019 the Company had no capital commitments.

   29     Capital risk management 

The capital structure of the Company consists of cash and cash equivalents and equity attributable to equity holders of the Company, comprising issued capital, reserves and retained earnings as disclosed in notes 23 to 26.

The board's policy is to maintain an appropriate capital base so as to maintain investor and creditor confidence and to sustain future development of the business. The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The Company has a record of managing the timing and extent of discretionary expenditure in the business.

In order to maintain or adjust the capital structure the Company may issue new shares.

   30     Events after the reporting date 

The only material post-balance sheet event was the award of a contract by Astellas Pharma Inc. on 31 July 2020.

   31     Related party transactions 

Remuneration of key management personnel

The remuneration of the Directors, who are the key management personnel of the Company, is set out on page 17.

   32     Controlling party 

The Company does not currently have an ultimate controlling party and did not have one in this reporting year or the preceding reporting year.

   33     Cash generated from operations 
 
 
                                                                2020        2019 
                                                                 GBP         GBP 
  Loss for the year after tax                               (64,424)   (104,040) 
  Adjustments for: 
   Taxation credited                                        (69,282)    (96,709) 
  Finance costs                                                    -           - 
  Investment income                                            (679)       (470) 
  Amortisation and impairment of intangible assets               422          13 
  Depreciation and impairment of tangible fixed assets         9,083       8,381 
  Equity settled share-based payment expense                   8,212      21,928 
  Movements in working capital: 
   Increase in debtors                                     (128,484)    (13,515) 
  Decrease in creditors                                       38,696      25,358 
  Increase/(decrease) in deferred revenue                      6,448    (67,190) 
                                                         -----------  ---------- 
  Cash absorbed by operations                              (200,008)   (226,244) 
                                                         ===========  ========== 
 

Enquiries:

Physiomics plc

Dr Jim Millen, CEO

+44 (0)1865 784 980

Hybridan LLP (Broker)

Claire Louise Noyce

+44 (0) 203 764 2341

Strand Hanson Ltd (NOMAD)

Richard Tulloch & James Dance

+44 (0)20 7409 3494

About Physiomics

Physiomics plc (AIM: PYC) is an oncology consultancy using mathematical models to support the development of cancer treatment regimens and personalised medicine solutions. The Company's Virtual Tumour(TM) technology uses computer modelling to predict the effects of cancer drugs and treatments to improve the success rate of drug discovery and development projects while reducing time and cost. The predictive capability of Physiomics' technologies have been confirmed by over 70 projects, involving over 30 targets and 60 drugs, and has worked with clients such as Merck KGaA, Merck & Co, Bayer and Lilly.

Based in Oxford UK, the Company works with clients worldwide to support their pre-clinical and clinical oncology development programs. Its team of scientists and computer modelling experts provide bespoke solutions encompassing data, analytics and insight.

Physiomics senior management has academic and commercial expertise, including over 120 years collectively of working in oncology and/or computational biology and over 120 publications in peer reviewed journals that have attracted thousands of citations.

For more information please visit:

www.physiomics.co.uk

www.twitter.com/Physiomics

www.linkedin.com/company/physiomics-plc/

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

FR DKLFLBKLZBBB

(END) Dow Jones Newswires

September 30, 2020 02:00 ET (06:00 GMT)