REG - BSF Enterprise PLC - Full Year Results
31/01/2024 07:00
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RNS Number : 4396B BSF Enterprise PLC 31 January 2024
31 January 2024
BSF Enterprise PLC
("BSF" or the "Company")
Full Year Results
BSF (LSE: BSFA), (OTCQB: BSFAF), the Main Market listed industry leading
biotech company and owner of pioneering UK-based tissue engineering company 3D
Bio-Tissues (3DBT) and corneal tissue replacement company Kerato, is pleased
to announce its audited results for the year ended 30 September 2023.
Financial and Group Highlights
· Commenced trading on the OTCQB Market in the US under the symbol
BSFAF.
· Raised £2.9 million in an oversubscribed placement and subscription
for new shares.
· Secured a EUR612,000 grant to scale up City-Mix™ production over an
extended period.
· Cash balance of £1,640,000 as at the date of this announcement.
· The Group's revenue reflects only small orders for CityMix™ as, at
this stage, orders are from large companies evaluating City-Mix™ for use in
their own media formulation. It is the Company's expectation that, following
this evaluation, larger orders will develop.
Portfolio Highlights
3DBT Progress
· Successfully produced two full-scale cultivated pork fillets, and a
pork strip, demonstrating how BSF's technology can produce cultivated meat in
consumer-ready 'pre-sliced' form.
· Collaborated with major global cosmetic companies to test Etsyl™, our
proprietary lipopeptide for skincare applications.
· Partnered with Benzol to commercialise and distribute City-Mix in
Germany. This forms part of the Company's strategy to use an indirect sales
model for the biotech and life sciences markets across Europe and the US.
· Fortune 500 pharmaceutical company purchased several vials of
City-Mix for evaluation to be used in its media formulation and help reduce
costs.
· 3DBT is making good technical progress on its leather products and
continues to process proof-of-concept studies with target companies. The
Company plans to make a more detailed announcement in due course, updating
investors and the market on the strategy for the year.
Kerato Formation
· Formed lab-grown cornea company Kerato Limited and collaborated
with a major US consumer goods company to explore applications for lab-grown
corneas.
· Appointed Dr Sarah Greenhalgh as Managing Director of Kerato.
Post Period End Highlights
· Two new staff members, including a Technical Sales Specialist and
Operations Manager, to focus on securing additional procurement, manufacturing
and distribution partnerships for City-Mix™.
· Exclusive Joint Venture with continuous cell manufacturer,
Cellular Revolution Ltd, to develop a new Foodtech company focused on an
end-to-end solution for the manufacture of cultivated meat at scale.
· Publication of the book, Cultured Meat Technology, co-authored by
Chief Executive of 3DBT, Professor Che Connon.
Che Connon, Managing Director of BSF Enterprise and CEO at 3D Bio Tissues,
commented: "The year has seen significant milestones achieved, with the
continued growth of commercial opportunities and new sales channels for 3DBT,
alongside the raising of new capital to support the Group's growth strategy
such as the formation of a new lab-grown cornea company, Kerato.
"The management team has already made huge strides towards the integration of
3DBT into the Group and developed a clear plan to capitalise on the
achievements made since its acquisition. Our strategy is to develop BSF into
an ecosystem of industry-leading bio-tech companies that can bring
transformative products to healthcare, fashion and cellular agriculture
markets. With the formation of Kerato Limited, and our recently announced JV
to develop an end-to-end manufacturer of cultivated meat, we are making great
strides toward our strategic goals.
"The ability to raise sufficient funds and continue with operational and
commercial progress has come in a period of increasing uncertainty from the
difficult macro-economic environment, inflation and cost pressures. As a young
business, it is a testament to the Group for continuing to generate
opportunities to bring our products to market. I look forward with
confidence and to keeping you appraised of our progress throughout the year."
For further enquiries, please visit www.bsfenterprise.com
(http://www.bsfenterprise.com/) or contact:
BSF Enterprise PLC Via SEC Newgate below
Che Connon - CEO & Executive Director
Geoff Baker - Executive Director
Shard Capital (Broker)
Damon Heath 0203 971 7000
SEC Newgate (Financial Communications)
Bob Huxford 020 3757 6882
Elisabeth Cowell BSF@secnewgate.co.uk
ISIN of the Ordinary Shares is GB00BHNBDQ51
SEDOL Code is BHNBDQ5.
About BSF
BSF Enterprise PLC (BSF) is focused on unlocking the next generation of
biotechnological solutions - using cell-based tissue engineering to help
generate cultured meat, lab-grown leather, as well as human corneas, collagen
growth and skin substitutes, to deliver sustainable solutions across a variety
of sectors. It owns 100% of the Main Market listed industry-leading biotech
and tissue engineering company 3D Bio-Tissues (3DBT) that successfully
produced the UK's first high-quality cultivated meat from its laboratory in
Newcastle as well as the corneal tissue replacement company Kerato.
BSF aims to deliver growth to shareholders through acquiring a suite of
technologies that underpins the development of tissue templating for corneas,
meat and leather, and license out the IP to manufacturers, wholesalers and
distributors to help manufacture the products at sc
Registered number: 11554014
BSF Enterprise Plc
Annual Report and Consolidated Financial Statements
for the year ended 30 September 2023
Company Information
Directors Min Yang
(Non-Executive Chairman)
Geoffrey Baker
(Executive Director)
Dennis Kian Jing Ow
(Non-Executive Director)
Dr Che Connon
(Chief Executive Officer)
Company Secretary Geoffrey Baker
Registered Office Aldgate Tower,
2 Leman Street,
London, E1 8QN
Registered Number 11554014
Auditors PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London, E14 4HD
Legal Advisers Reynolds Porter Chamberlain LLP
Tower Bridge House
St Katharine's Way
London
E1W 1AA
Principal Bankers Bank of China (UK) Limited
1 Lothbury
London, EC2R 7DB
Registrars Share Registrars Limited
The Courtyard, 17 West Street
Farnham,
Surrey, GU9 7DR
Contents
Page
Chairman's 4
statement
Chief Executive's Report 5
Strategic Report 8
Directors' Report 15
Directors' remuneration Report 30
Directors' responsibilities 34
Independent auditor's Report 36
Consolidated statement of comprehensive income 43
Consolidated statement of financial position 44
Consolidated statement of changes in equity 45
Consolidated statement of cash flows 46
Notes to the consolidated financial statements 47
Company statement of financial position 79
Company statement of changes in equity 80
Notes to the Company financial statements 81
Chairman's Statement
On behalf of the Board, I present the annual report and financial statements
of BSF Enterprise Plc for the year ended 30 September 2023.
We are very pleased to announce the successful production of two additional
full-scale cultivated pork fillets, alongside a cultivated pork strip. This
remarkable feat was unveiled at a technical event on 25 May 2023, marking a
significant milestone in our journey towards sustainable meat production. The
development of the pork strip underscores the versatility and effectiveness of
our proprietary technology in producing meat in a consumer-ready, 'pre-sliced'
form, tailored for cooking convenience.
Furthermore, we are delighted to share that our Ordinary Shares commenced
trading on the OTCQB Venture Market in the United States on 24 May 2023, under
the symbol BSFAF. This listing provides us with access to a vast pool of
investors, enhancing our visibility and liquidity. It also facilitates
cross-border trading, priced in US dollars, during US trading hours, thus
easing the process for our international investor base.
In addition, we reported that following the conditional fundraising
announcements made between March and April 2023, we received approval from the
Financial Conduct Authority for our prospectus relating to the proposed
issuance of up to 29,542,200 new ordinary shares. This approval marks a
significant step forward in our capital-raising efforts and positions us well
for future growth.
On the product partnership front, 3D Bio-Tissues continues to forge ahead with
collaborations with major global cosmetic companies to test Etsyl™, our
proprietary lipopeptide, for skincare applications. This development
underscores the versatility and market potential of our technology beyond the
food sector. Moreover, we were pleased to announce that 3D Bio-Tissues secured
a EUR612,000 grant to scale up City-Mix™, an animal-free cell growth agent
that plays a pivotal role in our lab-grown meat and leather production
processes. This funding will enable us to accelerate the commercialization of
this innovative product.
In terms of strategic developments, we are proud to announce the formation of
Kerato Limited ("Kerato''), a wholly-owned lab-grown cornea research company.
Kerato is collaborating with a major US consumer goods company to explore
diverse applications for lab-grown corneas, further broadening our impact in
the field of regenerative medicine. The appointment of Dr Sarah Greenhalgh as
Managing Director strengthens Kerato's leadership team and positions the
company for success.
Looking ahead, we are confident in our strong financial position, bolstered by
recent funding and engagement with US investors. This solid foundation enables
us to drive forward transformative innovations in cellular agriculture and
pursue exciting new opportunities in the coming weeks and months.
On behalf of the Board, I would like to express our deepest gratitude to our
shareholders for their continued support and trust in our vision and strategy.
We remain committed to delivering on our promises and creating long-term value
for all stakeholders.
I look forward to reporting to you on our progress over the coming year.
Min Yang
Chairman
Chief Executive's Report
I am pleased to present my report for the Company for the year to 30 September
2023.
Business review and future developments
Financial summary
The net loss for the year ended 30 September 2023 was £1,501,042 (2022:
£930,039 loss). The increase in the loss compared with 2022 reflects
increased corporate, legal and advisory costs following the acquisition of
3DBT and re-admission, and includes a full year of activity of 3DBT. The issue
of shares at admission and, subsequently, in the year to 30 September 2023,
has widened the shareholder base and increased the number of shares in issue.
As a result, the loss per share decreased to 1.59 pence (2022: 2.06 pence loss
per share).
The Group had cash of £2,319,061 at 30 September 2023 (compared with
£1,061,529 at 30 September 2022) and £1,684,000 as of the date of this
report.
Since the Company's acquisition of 3DBT, significant progress has been made
towards its strategic objectives. This includes:
Development of laboratory capacity
3DBT has continued to expand its lab production capacity in order to support
growing commercial opportunities, The Company has now more than doubled its
lab production space to 2,400 sq ft and purchased new material equipment to
support its City-Mix™ production and quality control processes. 3DBT will
continue to look to scale up production capabilities to help support the Joint
Venture with CellulaRevolution Ltd (CellRev) to scale-up capabilities for
cultivated meat production, addressing what is a significant challenge for the
growth of the industry.
Patent applications
Since our readmission on the London Stock Exchange, the 3D Bio-Tissues team
has been busy expanding its production facility and progressing its patent
applications. 3DBT's existing patent applications are progressing well, having
reached the national phase for a range of countries, and two new International
Patent Applications have been filed for City-Mix™ relating to the
application of the technology to produce skin, corneas, and meat.
Prototype products
3DBT is delighted to report the successful production of two more full-sized
fillets of cultivated pork, along with a cultivated pork strip. These products
were unveiled at a technical event held on 25 May 2023. The fillets,
resembling traditional 2-ounce tenderloin steaks, measured approximately 5 cm
in diameter, 3 cm in height, and weighed around 60 grams each. This time
around, the team focused on enhancing the fillet's thickness, achieving a
noticeable improvement compared to the one produced in January. Furthermore,
the Company introduced a cultivated pork strip, nicknamed the 'noodle,' which
measured about 30 cm in length and 1 cm in diameter. This innovation showcased
the potential of our proprietary technology in shaping the future of meat
consumption by offering a ready-to-cook, pre-sliced option for our customers.
Chief Executive's Report (continued)
In their raw state the lab-grown fillets exhibited structural integrity and
resistance to breaking when being manipulated and compressed. Management
believes the fillets resembled conventional farm grown meat to touch with
similar consistency and elasticity and no obvious aroma.
Two of the fillets were then pan fried, cooking rapidly and throughout while
maintaining integrity and shape and exhibiting only minimal shrinkage, as
would be expected during the preparation of high-quality farm grown meat. The
fillets seared easily, showed heavy caramelisation with charring and crisping
on the surface, and the aromas were similar to those of barbecued meat. In
summary, the test results met, and in many respects exceeded, our
expectations.
The cultivated meat products were produced using 3DBT's patented, serum-free
and animal-free cell booster City-Mix(TM), which eliminates the requirement of
conventional plant-based scaffolds, blends or fillers, as have been
universally adopted by the industry to date to ensure structural integrity of
cultivated meat products. 3DBT's products are therefore 100% structured meat,
produced without any animals suffering in its production.
The latest iteration of 100% meat products underwent testing, with data
collected and study participants invited to inspect the product in a raw and
cooked state. Study participants were limited to those persons who had a
direct working relationship or involvement with the Company. The cultivated
meat fillets were then pan-fried and presented formally by a trained,
independent chef, while the meat strip was first cut in two portions, and
subsequently poached or pan-fried, in order to test an array of cooking
methods. The chef's involvement was key to demonstrating that the cultivated
meat could be handled and cooked in the same way as traditional meat, and the
results were very positive.
The Company is pleased to confirm that the 100% cultivated meat products were
very similar in appearance to conventional meat in their raw state, with
fibres clearly visible. The results from cutting and cooking the fillets were
also consistent with the previous results in terms of overall appearance,
aroma and searing/crisping. The Study participants that tasted the cultivated
meat provided very positive feedback in terms of its taste and texture.
A further industry milestone is that our prototypes are 100% animal meat,
having native-like structure without the need for plant-based scaffolds. This
structure without scaffold was augmented through culturing the fillets with
City-Mix(TM) , our patented animal-free media which represents the next
generation in growth agents. The success of our fillet products
demonstrates the effectiveness of the Company's intellectual property
City-Mix™ in being applied to produce meat as a consumer-ready, 'pre-sliced'
form without the need for plant-based scaffolds for cooking purposes that
potential customers and manufacturers can use.
Partnership updates
The Group announced that it has entered into a proof-of-concept contractual
agreement with one of the largest cosmetic companies in the world, which will
test the suitability of the Company's proprietary lipopeptide product,
Etsyl™, for use within its skin cream cosmetic solutions.
3DBT is harnessing the natural regenerative ability of human skin cells to
drive rapid tissue regeneration and repair. Its Etsyl™ promotes cellular
collagen production in human skin cells, with cosmetic and pharmacological
applications as a bioactive ingredient in skincare formulations for the
fabrication of native-like skin substitutes for clinical, cosmetic and
industrial applications.
Chief Executive's Report (continued)
The cosmetic company which BSF is working with specialises in the research and
development of bioactive ingredients for skin care which, with proven
efficacy, can aid in anti-ageing, moisturising and acne control.
In September 2023, 3DBT announced that it has been awarded a further
EUR612,000 peer reviewed grant from the European Institute of Innovation and
Technology ("EIT Food") bringing the total grants awarded by EIT to EUR
712,000. This significant follow-on grant will be used to upscale the
production and sales of its proprietary serum-free media, City-Mix™, as well
as support the development of an enhanced product range. City-Mix™ is an
animal-free cell growth agent for culturing skin, muscle and fat cells for use
in cultivated meat and leather production.
Further acquisition opportunities
The Board continues to evaluate potential acquisition and spin-out
opportunities in line with its strategy to acquire or develop a suite of
technologies that underpins the development of tissue templating for corneas,
meat and leather or enhances the technologies' value with support from
downstream or upstream processes. The recent spinout of the corneal commercial
arm into Kerato Ltd is one example, as is the planned creation of Cultured
Meat Technologies Ltd in partnership with a next generation bioreactor
company.
Outlook
The year has seen significant milestones achieved, with the continued growth
of commercial opportunities and new sales channels for 3DBT, the raising of
new capital to support the Group's growth strategy and the formation of a new
lab-grown cornea company, Kerato.
The management team has already made huge strides towards the integration of
3DBT into the Group and developed a clear plan to capitalise on the
achievements made since its acquisition. Our strategy is to develop BSF into
an ecosystem of industry-leading cellular agricultural companies that can
bring transformative products to market. With the formation of Kerato, and our
recently announced JV to develop an end-to-end manufacturer of cultivated
meat, we are making great strides toward our strategic goals. The ability to
raise sufficient funds and continue with operational and commercial progress
has come in a period of increasing uncertainty from the difficult
macro-economic environment, inflation and cost pressures and, as a young
business, is testament to the Group for continuing to generate opportunities
for bringing our products to market.
I look forward with confidence and to keeping you appraised of our progress
throughout the year.
Che Connon
Chief Executive Officer
Strategic Report
Strategy
The Company has been created to consider opportunities within the innovation
marketing and technology sector. The Company sought an acquisition target that
focuses on trade innovation, data-driven analytics and technology to maximise
sales and assist companies to enter new markets.
The acquisition of 3DBT in 2022 was the first acquisition by the Company. The
Group's intention is to grow through a combination of organic growth and,
where possible, selective acquisitions.
In October 2023, the Company incorporated a new 100% owned subsidiary, Kerato
Limited. The subsidiary is a new cornea biotech company, which will form part
of the Company's growing portfolio. It will seek to accelerate the transition
of 3DBT's advanced corneal products and knowhow into clinical trials, as well
as address the growing industrial demand for these products such as for
irritancy testing for drugs and household chemicals.
In December 2023, 3DBT and Kerato, entered into a Term Sheet for an exclusive
Joint Venture with CellulaRevolution Ltd (CellRev), a leader in continuous
cell manufacturing, to help develop a new Foodtech company focused on
developing, and offering to the market, an end to end solution for
manufacturing cultivated meat at scale
The Joint Venture, Cultivated Meat Technologies Limited (CMT), will
combine CellRev's continuous bioprocessing expertise, that can facilitate
faster, cheaper and more sustainable production of muscle cells, with 3DBT's
leading knowhow in forming meat tissue and its City-Mix™ animal-free cell
culture supplement. City-Mix™ is already used in the growth of skin, muscle
and fat cells for use in cultivated meat. The aim of CMT is to provide the
market with the premier platform for manufacturing cultivated meat in a
scalable and cost-competitive manner.
The Joint Venture will develop a harmonised technology offering with a focus
on both upstream and downstream processes, to provide scale-up capabilities
for cultivated meat production, addressing what is a significant challenge for
the growth of the industry. CMT will seek to deliver this through licencing
agreements with established meat-producers that can provide production
know-how, capital allocation and supply chain relationships. It will also work
to establish strategic partnerships with local distributors and retailers to
ensure efficient distribution and market penetration.
The Company will provide a further update on the development of CMT in Q1
2024, setting out its strategy for the financial year.
In addition, BSF recently established a presence in Hong Kong to provide ease
of access to the Greater China market, which is responsible for more than a
quarter of global meat consumption. Furthermore, its Ministry of Agriculture
and Rural Affairs has included cultivated meat in its blueprint for food
security in its official five-year agricultural plan. BSF is currently in the
process of hiring Research & Development and sales and marketing
specialists in Hong Kong to help develop distribution networks and
manufacturing partners in China. The Company is fully financed to deliver on
its expansion plans to help progress its commercial objectives and has the
ability to secure grant funding to cover staff and premises cost in some of
these areas, as it has previously.
Business review and future developments
Analysis of the Group's business performance and future developments is set
out in the Chief Executive's Report above.
Strategic Report (continued)
Principal risks and uncertainties
The Directors have identified the following as the key risks facing the
business:
Inability to fund operations
The Company continues to explore additional fundraising options to support its
strategic objectives. The Company may be unable to fund growth in its
operations if it does not obtain additional funding, however, the Company will
ensure that appropriate funding measures are taken to ensure minimum
commitments are met.
Technical risks
All biotechnology and therapeutic research and development programmes carry
technical risks, including the programme undertaken by 3DBT. These risks
include those associated with delays, third party suppliers of research
services or materials essential to the programmes, the unpredictability of the
biological processes associated with cell and tissue culture and
bioprocessing, and outcomes of in vitro, pre-clinical, and clinical testing.
There is no guarantee that these technical risks can be effectively overcome,
and a successful, regulatory approved product can be developed. The Group's
products are also at risk of technological advancements of competitors who may
supersede the Group's technology.
The Company's relationship with the Directors and conflicts of interest
The Company is dependent on the Directors to execute its strategy for 3DBT and
Kerato and to identify additional potential acquisition opportunities.
The Directors are not obliged to commit their whole time to the Company's
business; they will allocate a portion of their time to other businesses which
may lead to the potential for conflicts of interest in their determination as
to how much time to assign to the Company's affairs. However, Dennis Ow has
been appointed as an independent director of the Company to manage any such
conflicts of interests.
Any matters on which Min Yang, Geoffrey Baker or Che Connon have a conflict of
interest will be delegated to and considered by Dennis Ow.
Suitable further acquisition opportunities may not be identified or completed
The Company's business strategy is dependent on the ability of the Directors
to identify additional suitable acquisition opportunities. The Company has now
completed its first acquisition, however if the Directors are not able to
identify additional suitable acquisition targets, the Company may not be able
to fulfil its objectives. Furthermore, if the Directors identify a further
suitable target, the Company may not acquire it at a suitable price or at all.
In addition, if an acquisition identified and subsequently aborted, the
Company may be left with substantial transaction costs. The Board of Directors
has considerable experience in corporate finance activities and in managing
acquired business which is expected to benefit the Company and minimise these
risks.
Strategic Report (continued)
Risks inherent in an acquisition
Although the Company and the Directors will evaluate the risks inherent in a
particular target, they cannot offer any further assurance that all of the
significant risk factors can be identified or properly assessed. Furthermore,
no assurance can be made that an investment in Ordinary Shares in the Company
will ultimately prove to be more favourable to investors than a direct
investment, if such an opportunity were available, in a target business. The
experience of the Board both in terms of relevant sector experience and
corporate finance skills are key to managing these risks.
Reliance on external advisors
The Directors expect to rely on external advisors to help identify and assess
further potential acquisitions and there is a risk that suitable advisors
cannot be placed under contract or that such advisors that are contracted fail
to perform as required. The Board's experience in previous transactions is key
in mitigating these risks.
Reliance on additional funding to generate income from the acquired activities
The Company is dependent on raising additional funds in order to bring its
products to a commercial market and thus income which the Directors hope will
be generated by 3DBT's and Kerato's research activities or from its subsequent
divestment of these subsidiary companies to meet the Company's expenses. If
this is not achieved, the Company may be unable to pay its expenses or make
distributions on the Ordinary Shares. The Board's experience in the sector is
expected to mitigate these risks.
Restrictions in offering Ordinary Shares as a consideration for an acquisition
or requirements to provide alternative consideration.
In certain jurisdictions, there may be legal, regulatory or practical
restrictions on the Company using its Ordinary Shares as a consideration for
an acquisition, which may mean that the Company is required to provide
alternative forms of consideration. Such restrictions may limit the Company's
acquisition opportunities or make a certain acquisition more costly, which may
have an adverse effect on the results of operations of the Company. The
experience of the Board is key to managing such risks.
Key performance indicators
At this stage in its development, the Company is focusing on its growth
strategy for 3DBT and Kerato and in particular, the generation of revenues
from its research activities.
At present, the Directors are of the opinion that, other than the maintenance
of cash and cash equivalents, analysis using KPIs is not appropriate for an
understanding of the business at this time.
Gender analysis
The Board recognises the need to operate a gender diverse business and takes
into account the necessary diversity requirements and compliance with all
employment law. The Board, which comprises 3 males and one female, has
experience and sufficient training/qualifications in dealing with such issues
to ensure they would meet all requirements. In this regard, the Board
recognises that less than 40% of the individuals on the Board are women. The
chairmanship of the Board is however female. Two of the Board members are of
Chinese ethnicity. Additionally, the Company takes advice from suitably
qualified advisors to support the decision-making process of the Group.
Strategic Report (continued)
Corporate social responsibility
The Company aims to conduct its business with honesty, integrity and openness,
respecting human rights and the interests of shareholders and employees. The
Company aims to provide timely, regular and reliable information on the
business to all its shareholders and conduct its operations to the highest
standards.
The Company strives to create a safe and healthy working environment for the
wellbeing of its staff and to create a trusting and respectful environment,
where all members of staff are encouraged to feel responsible for the
reputation and performance of the Company.
The Company aims to establish a diverse and dynamic workforce with team
players who have the experience and knowledge of the business operations and
markets in which we operate. Through maintaining good communications, members
of staff are encouraged to realise the objectives of the Company and their own
potential.
Corporate environmental responsibility
The Board contains personnel with a good history of running businesses that
have been compliant with all relevant laws and regulations and there have been
no instances of non-compliance in respect of environment matters.
The Company's policy is to minimize the risk of any adverse effect on the
environment associated with its activities with a thoughtful consideration of
such key areas as energy use, pollution, transport, renewable resources,
health and wellbeing.
The Company also aims to ensure that its suppliers and advisers meet with
their legislative and regulatory requirements and that codes of best practice
are met and exceeded.
Climate-related Financial Disclosures
The Financial Stability Board's Task Force on Climate-related Financial
Disclosures (TCFD) recommendations serve as a global foundation for effective
reporting on the operational and financial implications of the
interrelationship between climate change and business, and set out recommended
disclosures structured under four core elements:
· Governance - The organisation's governance around climate-related
risks and opportunities
· Strategy - The actual and potential impacts of climate-related risks
and opportunities for an organisation's businesses, strategy, and financial
planning
· Risk Management - The processes used by the organisation to identify,
assess, and manage climate-related risks; and
· Metrics and Targets - The metrics and targets used to assess and
manage relevant climate-related risks and opportunities.
These are supported by recommended disclosures that build on the framework
with information intended to help investors and others understand how
reporting companies assess climate-related risks and opportunities. The table
below shows our current progress against the TCFD recommendations.
TCFD Pillar Recommended Disclosure Company Summary
Governance • Board's oversight of climate-related risks and opportunities As a development stage research and development business, the Group's
operations are at a relatively small scale and so therefore is its
• Management's role in assessing and managing climate-related risks and environmental impact. Nevertheless, the Board recognises its responsibility to
opportunities protect the environment (particularly as the business scales up). The Board
has oversight of climate-related matters (which include risks and
opportunities).
The board is supported by the Audit Committee, which is responsible for
keeping under review the adequacy and effectiveness of the Group's internal
control and risk management systems, which consider climate-related risks.
Strategy · Climate-related risks and opportunities identification BSF is committed to a net zero and healthier planet, and this is part of the
Group's strategic long-term priorities.
· Climate-related risks and opportunities impacts
· Resilience of the organisation's strategy
The Board is committed to conserving natural resources and striving for
environmental sustainability, by ensuring that its facilities (and the
facilities of academic and contracted collaborators) are operated to optimise
energy usage; minimising waste production; and protecting nature and people.
As BSF enters the next stage of its development, ESG will be at the heart of
the Board and management's vision and strategy to enable climate-related risks
and opportunities to be identified and suitably mitigated/actioned.
The information collected will allow the Board to challenge the Group's
strategy to ensure it is as resilient as possible.
Risk Management · Identifying and assessing climate-related risks Given the small scale of its current operations, BSF has the ability to embed
climate-related risk management systems into its overall internal control
· Managing climate-related risks systems from an early stage of its journey, thus almost eliminating the
occurrence of transition risk.
· Integration into overall risk management
As operations scale up in the coming years, the identification, assessment and
effective management of climate-related risks and opportunities will be
actively discussed during Board and management meetings
Metrics and Targets · Climate-related metrics As the Group's operations scale up, it will continue to monitor its energy
use.
· Scope 1, Scope 2, and Scope 3 emissions.
· Climate-related targets
The Group will seek to collect, structure, and effectively disclose related
performance data for the material climate-related risks and opportunities
identified where relevant.
The Board will also look to adopt SASB recommended disclosures in the next 2-3
years as the Group scales.
The Group already minimises business travel, and therefore energy use and
emissions, through the use of Internet-based communications tools.
Strategic Report (continued)
Section 172(1) Statement - Promotion of the Company for the benefit of the
members as a whole
When making decisions the Company takes into account the impact of its
activities on the community, the environment and the Company's reputation for
good business conduct. In this context, acting in good faith and fairly, the
Directors consider what is most likely to promote the success of the Company
for its members in the long term.
The Directors believe they have acted in the way most likely to promote the
success of the Company for the benefit of its members as a whole as required
by s172 of the Companies Act 2006. The requirements of s172 are for the
Directors to:
· Consider the likely consequences of any decision in the long term;
· Act fairly between the members of the Company;
· Maintain a reputation for high standards of business conduct;
· Consider the interests of the Company's employees;
· Foster the Company's relationships with suppliers, customers and
others; and
· Consider the impact of the Company's operations on the community and
the environment.
The Company operated as a cash shell until its acquisition of 3DBT in May
2022. The early stage nature of the business is important to the understanding
of the Company by its members and suppliers, and the Directors have been
transparent about the cash position and funding requirements.
The application of the s172 requirements can be demonstrated in relation to
some of the key decisions made during the year ended 30 September 2023:
· Any contracts for third-party advisory services provided have been
undertaken with a clear cap on financial exposure;
· As a result of these efforts the Company succeeded in raising
additional equity capital to fund the Group's strategy.
As a Company, the Board seriously considers its ethical responsibilities to
the communities and environment.
The Directors are fully aware of their responsibilities to promote the success
of the Company in accordance with section 172 of the Companies Act 2006. The
Board continuously reflects on how the Company engages with its stakeholders
and opportunities for enhancement in the future. As required, the Company's
external lawyers and the Company Secretary will provide support to the Board
to help ensure that enough consideration is given to issues relating to the
matters set out in s172(1)(a)-(f).
The Board regularly reviews the Company's principal stakeholders and how it
engages with them. This is achieved through information provided by management
via Regulatory News Service announcements, Corporate Presentations, and
Shareholder Meetings and teleconferences and also by direct engagement with
stakeholders themselves.
This report was approved by the Board of Directors on 30 January 2024 and
signed on its behalf by:
SIGNED
………………………………………….
Geoffrey Baker, Director
Directors' Report
The Directors present their Annual Report together with the consolidated
financial statements of the Company for the year ended 30 September 2023.
An indication of the likely future developments in the business of the Company
is included in the Strategic Report and Chairman's Statement.
Principal activity
The Company was formed to undertake the acquisition of a controlling interest
in businesses in the biotechnology, innovative marketing and e-commerce
sectors. The Company completed its first acquisition in May 2022 of 3DBT and
in October 2023, the Company incorporated a new subsidiary, Kerato Limited.
The subsidiary is a new corneal biotech company, which will form part of the
Company's growing portfolio. It will seek to accelerate the transition of
3DBT's advanced corneal products into clinical trials, as well as address the
growing industrial demand for these products.
Results and dividends
The results for the year are set out in the Consolidated Statement of
Comprehensive Income. The Directors do not recommend the payment of a dividend
on the Ordinary Shares (year ended 30 September 2022: nil).
Financial instruments and risk management
An explanation of the Company's financial risk management objectives, policies
and strategies and information about the use of financial instruments by the
Company is given in Note 19 to the consolidated financial statements.
Share capital structure
The Company was incorporated on 5 September 2018 under the UK Companies Act
2006.
All of the issued Ordinary Shares are in registered form, and capable of being
held in certificated or uncertificated form. The Registrar is responsible for
maintaining the share register. Temporary documents of title will not be
issued. The ISIN number of the Ordinary Shares is GB00BHNBDQ51. The SEDOL
number of the Ordinary Shares is BHNBDQ5.
Directors
The Directors of the Company during the year were as follows:
- Geoffrey Baker
- Dr Che Connon
- Min Yang
- Dennis Kian Jing Ow
Min Yang - Non-Executive Chairman
Ms. Yang has extensive business connections in the Asia Pacific region
including greater China, and has over 20 years of hands-on experience dealing
with both private and state-run businesses in China.
Directors' Report (continued)
Over the years, Min Yang has proven her unique business insight and expertise
in the identification, incubation and realisation of embryonic opportunities
in the resources, commodities, trading and residential estate and financial
investment sectors.
Min Yang has commercialised numerous innovations in the telecommunications
industry including building an Australasian telecommunications delivery
company between China and Australia. Further she has helped develop, market
and commercialise high-performance engine technologies now being developed in
China as an auxiliary power unit for electric engines.
Ms Yang is currently the Executive Chairman of ASF Group Ltd (ASX: AFA) and
Non-executive Chair of ActivEX Limited (ASX: AIV), Rey Resources Limited (ASX:
REY) and Non-executive Director of Key Petroleum Limited (ASX: KEY).
Dr Che Connon - Chief Executive Officer
Professor Che Connon was appointed to the Board on 16 May 2022 on completion
of the acquisition of 3DBT. Dr Che has over 20 years' experience in
extracellular matrix biology and is currently a professor of tissue
engineering at the University of Newcastle and its Director of Business
Development for the Faculty of Medical Science. Professor Che Connon is a
founder and director of 3BDT. He has successfully spun-out two additional
biotechnology companies. Professor Che Connon is a founder of Atelerix
Limited, which offers novel storage technology to support cell and tissue
logistics and founder director of Cellularevolution Ltd which is building a
new class of animal cell production bioreactor which runs continuously.
Geoffrey Baker - Executive Director
Mr Baker is a qualified lawyer in Australia and Hong Kong with a Commerce
degree (Accounting and Financial Management), a Law degree and Master of
Business Administration (MBA).
Mr Baker has extensive corporate and commercial legal and property expertise
developed over 36 years of practising law and representing companies in
Australia, China, Hong Kong, Japan and recently UK and Europe. Mr Baker has
also co-authored a number of books including the critically acclaimed book
"Think Like Chinese" first released in June 2008 (Federation Press, 2008). Mr
Baker has commercialised a number of innovations including bio-medical
apparatus for sleep-apnoea as well as high-performance engine technology now
being developed in China as an auxiliary power unit for electric engines.
Mr Baker is currently also the Non-Executive Director of ASF Group Ltd (ASX:
AFA), Rey Resources Limited (ASX: REY), ActivEX Limited (ASX: AIV) and
Non-executive Chair of Key Petroleum Limited (ASX: KEY).
Dennis Kian Jing Ow - Independent Non-Executive Director
Mr Ow is an experienced corporate finance executive who has worked in various
investment Banks in Asia, and has extensive knowledge of capital markets,
compliance and corporate governance. He was previously senior business manager
of Asia Pacific for the London Stock Exchange.
Independence of the Board
Dennis Ow is considered to be "independent" (using the definition set out in
the QCA Corporate Governance Code).
Directors' Report (continued)
Directors' interests
As at 30 September 2023, the beneficial interests of the Directors and their
connected persons in the ordinary share capital of the Company are set out
below.
Number of Ordinary Shares % of Ordinary
Director Share Capital
Geoffrey Baker 1,559,699 1.51%
Dr Che Connon 12,927,977 12.51%
Min Yang 5,779,850 5.59%
Dennis Kian Jing Ow - 0.00%
Min Yang indirectly holds 5,000,000 Ordinary Shares through Advance Plan
Investments Ltd, a company of which she is the sole shareholder and Director
and a further 779,850 Ordinary Share held directly in her own name.
None of the Directors hold options, warrants or any form of convertible
security in respect of Ordinary Shares.
Substantial shareholders
The following had interests of 3 per cent or more in the Company's issued
share capital as at 29 January 2024 as follows:
Number of Ordinary Shares % of Ordinary
Party Name Share Capital
BSF Angel Funding Limited 16,610,944 16.07%
JIM Nominees Limited 14,011,883 13.56%
Hargreaves Lansdown (Nominees) Limited 11,388.730 11.02%
Newcastle University Holdings Ltd 6,915,624 6.69%
Advance Plan Investments Limited 5,000.000 4.84%
Vidacos Nominees Limited 4,915,479 4.76%
Interactive Investor Services Nominees Limited 4,736,417 4.58%
WB Nominees Limited 3,190,000 3.09%
*Min Yang is the Director and sole shareholder of Advance Plan Investments
Ltd.
Capital and returns management
The Company raised additional gross proceeds of £2.94 million from a Placing
and Subscription for shares in March 2023. The Directors believe that further
equity capital raisings will be required by the Company for working capital
purposes as the Company pursues its strategic objectives. The Company will
explore additional fundraising options as required to support the its
strategic objectives.
Directors' Report (continued)
The Directors are generally empowered to allot shares. Pursuant to Resolutions
passed at the Company's General Meeting held on 26 September 2023, the
Directors were granted authorities to allot and issue shares in the Company
and to grant rights to subscribe for or to convert any security into shares
for the purposes of Section 551 of the Companies Act up to a maximum aggregate
nominal amount of £398,759, calculated as follows:
i) £295,422 in respect of 29,542,200 new Ordinary Shares in the Company
in connection with the
Additional Fundraising Securities and the Financial PR Shares;
ii) £103,337 in respect of up to 10,333,700 new Ordinary Shares in the
Company for such other
general purposes as the Directors consider necessary or appropriate.
This authority shall, unless renewed, revoked or varied by the Company, expire
on the earlier of (i) 12 months from the date of the General Meeting and (ii)
the conclusion of the next annual general meeting of the Company
The Company expects that any returns for shareholders would derive primarily
from capital appreciation of the Ordinary Shares and any dividends paid
pursuant to the Company's dividend policy.
Liability insurance for Company officers
The Company has obtained third-party indemnity for its Directors.
Going concern
The financial position of the Group, its cash flows and liquidity position are
set out in these financial statements. As at 30 September 2023, the Group had
cash and cash equivalents of £2,319,061. As at the date of this report, cash
balances were approximately £1,684,000.
The Group has prepared monthly cash flow forecasts based on reasonable
estimates of key variables including operating costs and capital expenditure
through to March 2025 that supports the conclusion of the Directors that they
expect sufficient funding to be available to meet the Group's anticipated cash
flow requirements to this date.
The assessment as to whether the going concern basis is appropriate has also
taken into account all information available up to the date of authorisation
of these financial statements.
The Group will need additional funding to finance ongoing operations and any
acquisitions it might make. Whilst there can be no guarantee that sufficient
funds will be raised, the Board is confident that sufficient additional
capital will be raised to ensure adequate funds are available to the Group. As
stated in note 2(d), whilst the Directors are confident of raising sufficient
funds in the timeframes required, these events or conditions, along with the
other matters as set forth in note 2(d), indicate that a material uncertainty
exists that may cast significant doubt on the group and parent company's
ability to continue as a going concern. The Board has however concluded that
the going concern basis remains appropriate in the preparation of these
Consolidated Financial Statements due to the anticipated availability of
sufficient financial resources in the 12 months from the date of the financial
statements.
The Directors are not aware of any other indicators which would give doubt to
the going concern status of the Group.
Directors' Report (continued)
Employee and greenhouse gas (GHG) emissions
The Group believes it uses less than 40,000 kWh of energy per annum. It does
not have responsibility for any emissions producing sources under the
Companies Act 2006.
Equal opportunity
The Company promotes a policy for the creation of equal and ethnically diverse
employment opportunities including with respect to gender. The Company
promotes and encourages employee involvement wherever practical as it
recognises employees as a valuable asset and is one of the key contributions
to the Group's success.
Corporate Governance Framework
Details of the Company's corporate governance framework are set out below.
Corporate Governance Report
The Directors acknowledge the importance of high standards of corporate
governance and intend, given the Company's size and the constitution of the
Board, to comply with the principles set out in the QCA Code. The QCA Code
sets out a standard of minimum best practice for small and mid-size quoted
companies.
The QCA Code sets out ten principles and we have outlined below the Group's
application of the Code.
Deliver growth
1. Establish a strategy and business model which promote long-term value for
shareholders:
The Company's business model is to create value through an acquisition-led
growth strategy with a focus on acquiring businesses in the biotechnology,
innovative marketing and e-commerce sectors.
The Board has set out the vision for the Group for the medium to long term.
The Board is responsible for formulating, reviewing and approving the Group's
strategy, budgets and corporate actions. The Company holds Board meetings at
least four times each financial year and at other times as and when required.
Detailed disclosure on the Company's business model and strategy is disclosed
on the Company's website and in the Strategic Report.
2. Seek to understand and meet shareholder needs and expectations:
The Company has a Board with experience in understanding the needs and
expectations of its shareholder base. It supplements this with professional
advisers including public relations company, and legal advisers who provide
advice and recommendations in various areas of its communications with
shareholders. The Company engages with its shareholders through its website to
provide information to shareholders and provides regular updates to the market
via the Regulatory News Service.
The Company is committed to listening and communicating openly with its
shareholders to ensure that its strategy, business model and performance are
clearly understood. Understanding what analysts and investors think about us,
and in turn, helping these audiences understand our business, is a key part of
driving our business forward and we actively seek dialogue with the market. We
will do so via retail and institutional investor roadshows, attending and
presenting at investor conferences, meeting with independent investment
analysts and financial journalists and our regular reporting.
Directors' Report (continued)
The Directors actively seek to build a relationship with institutional
shareholders. The Chief Executive Officer ("CEO") and other directors will
make presentations to institutional shareholders and analysts from
time-to-time in part to listen to their feedback and have a direct
conversation on any areas of concern. The Board as a whole is kept informed of
the views and concerns of major shareholders by briefings from the CEO. Any
significant investment reports from analysts will be circulated to the Board.
The Non-Executive Chairman is also available to meet with major shareholders
if required to discuss issues of importance to them.
The Annual General Meeting ("AGM") is one forum for dialogue with shareholders
and the Board. The Notice of Meeting is sent to shareholders at least 21 clear
days before the AGM. The chairs of the Board and all committees, together with
all other Directors, will routinely attend the AGM and are available to answer
questions raised by shareholders.
For each vote, the number of proxy votes received for, against and withheld is
announced at the meeting. The results of the AGM are subsequently published on
the Company's website.
3. Take into account wider stakeholder and social responsibilities
and their implications for long-term success:
Engaging with all our stakeholders strengthens our relationships and helps us
make better business decisions to deliver on our commitments. The Board is
regularly updated on wider stakeholder engagement to stay abreast of
stakeholder insights into the issues that matter most to them and our
business, and to enable the Board to understand and consider these issues in
decision-making. Some examples of stakeholders aside from our shareholders are
our partners and our suppliers. The Board therefore closely monitors and
reviews the results of the Company's engagement with those groups to ensure
alignment of interests.
4. Embed effective risk management, considering both opportunities
and threats, throughout the organisation:
The Company recognises that risk is inherent in all of its business
activities. Its risks can have a financial, operational or reputational
impact. A summary of the key risks is set out in the Strategic Report and is
provided on the website. The Company's system of risk identification,
supported by established governance controls and close management involvement
and oversight, ensures it effectively responds to such risks, whilst acting
ethically and with integrity for the benefit of all its stakeholders.
The Company's key internal controls procedures include:
Financial Controls
The Company's Audit Committee comprises Dennis Ow (as Chairman) and Min
Yang Non-Executive Director). The Audit Committee meets as often as required
and at least twice a year. The Audit Committee's main functions include
reviewing the effectiveness of internal control systems and risk assessment,
making recommendations to the Board in relation to the appointment and
remuneration of the Company's auditors and monitoring and reviewing annually
their independence, objectivity, effectiveness and qualifications.
The Audit Committee also monitors the integrity of the financial statements of
the Company and Group, including its annual and interim reports and any other
formal announcement relating to financial performance. The Audit Committee is
responsible for overseeing the Company's relationship with the external
auditors, including making recommendations to the Board on the appointment of
the external auditors and their remuneration.
Directors' Report (continued)
The Audit Committee considers the nature, scope and results of the auditors'
work and reviews, and can develop and implements policies on the supply of
non-audit services that are provided by the external auditors where
appropriate.
The Audit Committee focuses particularly on compliance with legal
requirements, accounting standards and the relevant Listing Rules for
Companies and ensuring that an effective system of internal financial and
non-financial controls is maintained. The ultimate responsibility for
reviewing and approving the annual report and accounts remains with the Board.
The identity of the Chairman of the Audit Committee is reviewed on an annual
basis and the membership of the Audit Committee and its terms of reference are
kept under review. The Audit Committee members have no links with the
Company's external auditors.
Standards and policies
The Board is committed to maintaining appropriate standards for all the
Group's business activities and ensuring that these standards are set out in
written policies where appropriate.
The Board acknowledges that the Group's operations may give rise to possible
claims of bribery and corruption. In consideration of the UK Bribery Act the
Board reviews the perceived risks to the Group arising from bribery and
corruption to identify aspects of the business which may be improved to
mitigate such risk. The Board has adopted a zero-tolerance policy toward
bribery and has reiterated its commitment to carry out business fairly,
honestly and openly. The Company has also adopted a share Dealing Code for the
Board, in conformity with the requirements of the Listing Rules for Companies
and the Market Abuse Regime (MAR) and will take steps to ensure compliance by
the Board and senior staff with the terms of the code. In summary, the code
stipulates that those covered by it should: not deal in any securities of the
Company unless prior written notice of such proposed dealings has been given
to the Board and written clearance received from the Board; not purchase or
sell any securities of the Company in the two months immediately preceding the
announcement of the Company's half-yearly or annual results; not use another
person, company or organisation to act as an agent, or nominee, partner,
conduit or in another capacity, to deal in any securities on their behalf
where that third person would breach obligations under this paragraph; and
immediately inform the Board of any dealings in the Company's shares.
All material contracts are required to be reviewed and signed by a senior
Director of the Company and reviewed by our external counsel.
The Company has a social media policy. The objective of the policy is to
minimise the risks to the Company through use of social media. The policy
deals with the use of all forms of social media, all social networking sites,
internet postings, the Company's website, non-regulatory news feeds and blogs.
It applies to use of social media for business purposes as well as personal
use that may affect the Company in any way. The policy covers all employees,
officers, consultants, contractors, interns, casual workers and agency
workers.
Maintain a dynamic management framework
5. Maintain the Board as a well-functioning, balanced team led
by the Chair:
The Board comprises four Directors; two Executive Directors and two
Non-Executive Directors, reflecting a blend of different experiences and
backgrounds.
The QCA Code states that a company should have at least two independent
non-executive directors. At present, the Company has only one independent
non-executive director being Mr Dennis Ow.
Directors' Report (continued)
The Board believes that the composition of the Board brings a desirable range
of skills and experience in light of the Company's challenges and
opportunities, while at the same time ensuring that no individual (or a
small group of individuals) can dominate the Board's decision making. The
Company will appraise the structure of the Board on an ongoing basis.
The Non-Executive Chairman is primarily responsible for the working of the
Board of the Company and for assessing the individual contributions of each
Board member to ensure that:
- Their contribution is measurable, timely, relevant and effective
- They commit sufficient time to the business to fulfil their statutory and
fiduciary duties
- Where relevant, they maintain their independence
- They function collectively in a coherent and productive manner
- The receive appropriate training to stay up to date and improve performance
The Company has the following appropriately constituted committees, each with
formally delegated duties and responsibilities set out in respective written
terms of reference:
· Audit Committee;
· Remuneration Committee; and
· Nomination Committee
Details of these committees is set out below on pages 28 to 29.
The Board is responsible for the overall leadership and effective management
of the Company, setting the Company's values and standards and ensuring
maintenance of a sound system of internal control and risk management. The
Board is also responsible for approving Company policy and its strategic aims
and objectives as well as approving the annual operating and capital
expenditure budgets. The Board supports the concept of an effective Board
leading and controlling the Company and believes the Company has a
well-established culture of strong corporate governance and internal controls
that are appropriate and proportional, reflecting the Company's culture, size,
complexity and risk.
All Directors bring a wide range of skills and international experience to the
Board. The non-executive Directors hold meetings without the executive
Directors present. The Chairman is primarily responsible for the working of
the Board of the Company. The CEO is primarily responsible for the running of
the business and implementation of the Board strategy and policy. The CEO is
assisted in the managing of the business on a day-to-day basis by the Board as
a whole.
The Board hold regular meetings where it approves major decisions and utilises
its expertise to advise and influence the business. The Board will meet on
other occasions as and when the business demands. During the financial year
under review the Board met on five occasions.
The Board and its committees are supplied with appropriate and timely
information, including detailed financial information, in order to discharge
its duties. All Directors have access to the advice and services of the
company secretary, who is responsible for ensuring that Board procedures are
followed and that applicable rules and regulations are complied with.
Independent professional advice is also available to Directors in appropriate
circumstances.
A detailed agenda is established for each scheduled meeting and appropriate
documentation is provided to Directors in advance of the meeting.
Directors' Report (continued)
Regular Board meetings provide an agenda that will include reports from the
CEO, reports on the performance of the business and current trading, and
specific proposals where the approval of the Board is sought. Areas discussed
include, amongst others, matters relating to the performance of 3DBT, placing
and funding arrangements and the strategic direction of the Company. Minutes
of the meetings from committees of the Board are circulated to all members of
the Board, unless a conflict of interest arises, to enable all Directors to
have oversight of those matters delegated to committees.
In accordance with the Company's Articles of Association, those Directors that
have been appointed since the previous AGM shall retire from office but shall
be eligible for re-appointment. All Directors have access to the advice and
services of the company secretary and other independent professional advisers
as required. Non-executive Directors have access to key members of staff and
are entitled to attend management meetings in order to familiarise themselves
with all aspects of the Company. It is the responsibility of the Chairman and
the company secretary to ensure that Board members receive sufficient and
timely information regarding corporate and business issues to enable them to
discharge their duties.
Board and committee meetings attendance
During the year under review, two Audit Committee meetings, one Remuneration
Committee meeting and one Nomination Committee meeting were held.
During the year there were ten Board meetings by the Directors of the Company.
Attendance of Directors and committee members at Board and committee meetings
held during the year is set out in the table below.
Audit Committee meetings Remuneration Committee meetings Nomination Committee meetings
Board meetings
Ming Yang 10 2 n/a n/a
Geoff Baker 10 n/a 1 1
Dennis Ow 10 2 1 1
Che Connon 10 n/a n/a n/a
Division of responsibilities
The division of responsibilities between the non-executive Chairman and the
CEO is clearly defined in writing. However, they work closely together to
ensure effective decision making and the successful delivery of the Group's
strategy.
The Chief Executive Officer
The CEO is responsible for the running of the Group's business for the
delivery of the strategy for the Group, leading the management team and
implementing specific decisions made by the Board to help meet shareholder
expectations. He also takes the lead in strategic development, by formulating
the vision and strategy for the Group.
The CEO reports to each Board meeting on all material matters affecting the
Group's performance.
Directors' Report (continued)
Given the structure of the Board and the fact that the Chairman and CEO roles
are fulfilled by two separate individuals, the Board believes that no
individual or small group of individuals can disproportionately influence the
Board's decision making.
The Chairman
The Chairman leads the Board, ensuring constructive communications between the
Board members and that all Directors are able to play a full part in the
activities of the Company. She is responsible for setting Board agendas and
ensuring that Board meetings are effective and that all Directors receive
accurate, timely and clear information. The Chairman officiates effective
communication with shareholders and ensures that the Board understands the
views of major investors and is available to provide advice and support to
members of the executive team.
Non-executive Directors
There are currently two non-executive Directors (including the Chairman), of
which one is an independent non-executive Director. The role of the
non-executive Directors is to understand the Group in its entirety and
constructively challenge strategy and management performance, set executive
remuneration levels and ensure an appropriate succession planning strategy is
in place.
They must also ensure they are satisfied with the accuracy of financial
information and that thorough risk management processes are in place. The
non-executive Directors also assist the Board with issues such as governance,
internal control, remuneration and risk management. No non-executive Directors
are participants in any share option plans of the Company.
Effectiveness
Composition of the Board
The Board consists of the Non-Executive Chairman, the CEO, one executive
Director and an independent non-executive director. The names, skills and
short profiles of each member of the Board, are set out on pages 15 to 16.
Each year the Board considers the independence of each non-executive Director
in accordance with the Code.
To ensure that they clearly understand the requirements of their role, the
Company has a letter of appointment in place with each non-executive Director.
Service agreements are entered into with the executive Director and senior
executives so that they can clearly understand the requirements of the role
and what is expected of them.
Commitment
Each Director commits sufficient time to fulfil their duties and obligations
to the Board and the Company. They attend Board meetings and join ad hoc Board
calls and offer availability for consultation when needed. The contractual
arrangements between the Directors and the Company specify the minimum time
commitments which are considered sufficient for the proper discharge of their
duties. However, all Board members appreciate the need to commit additional
time in exceptional circumstances.
Non-executive Directors are required to disclose prior appointments and other
significant commitments to the Board and are required to inform the Board of
any changes to their additional commitments.
Directors' Report (continued)
Before accepting new appointments, non-executive Directors are required to
obtain approval from the Chairman and the Chairman requires the approval of
the whole Board. It is essential that no appointment causes a conflict of
interest or impacts on the non-executive Director's commitment and time spent
with the Group in their existing appointment.
Details of executive Director service contracts and of the Chairman's and the
non-executive Directors' appointment letters are given on pages 30 and 31 of
the Remuneration Committee Report.
Development
The Board is informed of any material changes to governance, laws and
regulations affecting the Group's business.
Information and support
All Directors have access to the advice and services of the company secretary
and each Director and each Board committee member may take independent
professional advice at the Company's expense, subject to prior notification to
the other non-executive Directors and the company secretary.
The appointment and removal of the company secretary is a matter for the Board
as a whole. The company secretary is accountable directly to the Board through
the Chairman.
6. Ensure that between them the Directors have the necessary up-to-date
experience, skills and capabilities:
The Board has been assembled to allow each Director to contribute the
necessary mix of experience, skills and personal qualities to deliver the
strategy of the Company for the benefit of the shareholders over the medium to
long term.
Together the Board provide relevant sector skills, the skills associated with
running public companies and technical and qualifications to assist the
Company in achieving its stated aims.
The Directors keep their skillsets up to date as required through the range of
roles they perform with other companies and consideration of technical and
industry updates by external advisers.
The Directors receive regular briefing papers on the operational and financial
performance of the Company from the executives and senior management.
7. Evaluate Board performance based on clear and relevant objectives,
seeking continuous improvement:
Appointments to the Board
The Remuneration Committee is responsible for maintaining a Board of Directors
that has an appropriate mix of skills, experience and knowledge to be an
effective decision-making body, ensuring that the Board is comprised of
Directors who contribute to the successful management of the Company and
discharge their duties having regard to the law and the highest standards of
corporate governance, considering and recommending Board candidates for
election or re-election and reviewing succession planning.
The Remuneration Committee undertakes a detailed selection process as per the
recruitment and diversity policy to appoint or re-appoint a Director to the
Board. Included in this process are appropriate reference checks which include
but are not limited to character reference and bankruptcy to ensure that the
Board remains appropriate for that of a listed company.
Directors' Report (continued)
8. Promote a corporate culture that is based on ethical values
and behaviours:
The Board seeks to embody and promote a corporate culture that is based on
sound ethical values and behaviours, something we see as being a cornerstone
to a strong risk management programme.
Code of Business Ethics
The Board acknowledges the need for continued maintenance of the highest
standard of corporate governance practice and ethical conduct by all Directors
and employees of the Group. The Board has approved a code of business ethics
for Directors, officers and employees, which describes the standards of
ethical behaviour that are required to be maintained. This code was approved
pursuant to the Company's readmission. The Group promotes the open
communication of unethical behaviour within the organisation. We therefore
seek to operate within a corporate culture that is based on sound ethical
values and behaviours. We do this using certain rule-based procedures (such as
our formal Corporate Code of Conduct) and, more importantly, by the
behavioural example of individual Board members and senior managers. These
values, which we seek to instil throughout the Company, include integrity,
respect, honesty, and transparency. As a small company these characteristics
are far more visible to staff than might otherwise be the case. We also hold
internal meetings at which Directors and staff discuss matters, both formally
and informally. Compliance with the code assists the Company in effectively
managing its operating risks and meeting its legal and compliance obligations
as well as enhancing the Group's corporate reputation.
The code describes the Group's requirements on matters such as
confidentiality, conflicts of interest, use of Group information, sound
employment practices, compliance with laws and regulations and the protection
and safeguarding of the Group's assets.
An employee who breaches the code of business ethics face disciplinary action.
If an employee suspects that a breach of the code has occurred or will occur,
he or she must report that breach to the CEO, via the Company's confidential
"Whistle Blowing" process.
No employee will be disadvantaged or prejudiced if he or she reports in good
faith a suspected breach. All reports will be investigated, acted upon and
kept confidential.
Anti-bribery and anti-corruption
The Company has adopted an anti-corruption and bribery policy which applies to
the Board and employees of the Company and the Group. It generally sets out
their responsibilities in observing and upholding a zero-tolerance position on
bribery and corruption in all areas in which the Group operates. It also
provides guidance to those working for the Group on how to recognise and deal
with bribery and corruption issues and the potential consequences of failing
to adhere to this guidance. The Company expects all employees, suppliers,
contractors and consultants to conduct their day-to-day business activities in
a fair, honest and ethical manner, be aware of and refer to this policy in all
of their business activities worldwide and to conduct business on the
Company's behalf in compliance with it. Management at all levels are
responsible for ensuring that those reporting to them, internally and
externally, are made aware of and understand this policy.
The Group takes a zero-tolerance approach to acts of bribery and corruption by
any Directors, officers, employees and contractors. The Group will not offer,
give or receive bribes, or accept improper payments to obtain new business,
retain existing business or secure any advantage and will not permit others to
do so on its behalf.
Directors' Report (continued)
9. Maintain governance structures and processes that are fit for purpose
and support good decision making by the Board:
The Board meets at least four times each year in accordance with its scheduled
meeting calendar. The Board sets direction for the Company through a formal
schedule of matters reserved for its decision. Prior to the start of each
financial year, a schedule of dates for that year's Board meetings is compiled
to align as far as reasonably practicable with the Company's financial
calendar while also ensuring an appropriate spread of meetings across the
financial year. This may be supplemented by additional meetings as and when
required.
The Board and its Committees receive appropriate and timely information prior
to each meeting; a formal agenda is produced for each meeting, and Board and
committee papers are expected to be distributed well before meetings take
place. Any Director may challenge Company proposals and decisions are taken
democratically after discussion. Any Director who feels that any concern
remains unresolved after discussion may ask for that concern to be noted in
the minutes of the meeting, which are then circulated to all Directors. Any
specific actions arising from such meetings are agreed by the Board or
relevant committee and then followed up by the Company's management.
The Board is responsible for the long-term success of the Company. There is a
formal schedule of matters reserved to the Board. It is responsible for
overall group strategy; approval of major investments; approval of the annual
and interim results; annual budgets; dividend policy; and Board structure. It
monitors the exposure to key business risks and reviews the annual budgets and
their performance in relation to those budgets. There is a clear division of
responsibility at the head of the Company. The Chairman is responsible for
running the business of the Board and for ensuring appropriate strategic focus
and direction. The CEO is responsible for proposing the strategic focus to the
Board, implementing it once it has been approved and overseeing the management
of the Company through the executive team.
The Board is supported by the Audit Committee, Nomination Committee and the
Remuneration Committee. Each committee has access to such resources,
information and advice as it deems necessary, at the cost of the Company, to
enable the committee to discharge its duties. The Remuneration Committee
ensures remuneration is aligned to the implementation of the Company strategy
and effective risk management, taking into account the views of shareholders
and is also assisted by executive pay consultants as and when required.
The Board as a whole is collectively responsible for promoting the success of
the Company by directing and supervising the Company's affairs. The role of
the Board is as follows:
· To provide direction and entrepreneurial leadership of the
Company within a framework of prudent and effective controls which enable
risks to be appropriately assessed and managed;
· To set the Company's strategic aims, ensure that the necessary
financial and human resources are in place for the Company to meet its
objectives and review management performance;
· To demonstrate ethical leadership, setting the Company's value
and standards and ensuring that its obligations to its shareholders and others
are well understood;
· To create a performance culture that drives value creation
without exposing the Company to excessive risk or value destruction;
· To be accountable, and make well-informed and high quality
decisions based on a clear understanding of the Company's broader goals and
specific objectives;
· To create the right framework for helping Directors meet their
statutory duties under the Companies Act 2006, and/or any other relevant
statutory and regulatory regimes; and
· To promote its governance arrangements and embrace the evaluation
of their effectiveness.
Directors' Report (continued)
Build trust
10. Communicate how the Company is governed and is performing
by maintaining a dialogue with shareholders and other relevant stakeholders:
Dialogue with shareholders
The Group places considerable importance on effective communications with
shareholders.
The Group's communication strategy requires communication with shareholders
and other stakeholders in an open, regular and timely manner so that the
market has sufficient information to make informed investment decisions on the
operations and results of the Group. The strategy provides for the use of
systems that ensure a regular and timely release of information about the
Group is provided to shareholders.
The Group also posts all reports, stock exchange announcements and media
releases and copies of significant business presentations on the Company's
website: https://bsfenterprise.com/news/ (https://bsfenterprise.com/news/)
Constructive use of the AGM
The Board encourages full participation of shareholders at the AGM to ensure a
high level of accountability and understanding of the Group's strategy and
goals.
The Company provides information in the notice of AGM that is presented in a
clear, concise and effective manner. Shareholders are provided with the
opportunity to submit questions in relation to each resolution before they are
put to the vote and discussion is encouraged by the Board. The board will
publish a summary of any questions received which are of common interest,
together with a written response on the Company's website as soon as
practicable after the conclusion of the AGM and GM (as applicable).
Conflicts of interest
Min Yang, Geoffrey Baker and Dr Che Connon are directors of the Company and
are also directors of 3D Bio-Tissues Limited. Min Yang and Geoffrey
Baker are also directors of BSF Angel Funding Limited, a shareholder of the
Company. Dennis Ow has been appointed as an independent director of
the Company to manage any such conflicts of interests. Any matters on which
the Min Yang, Geoffrey Baker or Dr Che Connon have a conflict of interest will
be delegated to and considered by Dennis Ow.
Audit Committee
The Audit Committee has the primary responsibility of monitoring the quality
of internal controls to ensure that the financial performance of the Group
is properly measured and reported on. It receives and reviews reports from
the Group's management and external auditors relating to the interim and
annual accounts and the accounting and internal control systems in use
throughout the Group. The Audit Committee will normally meet not less than
three times in each financial year and has unrestricted access to the Group's
external auditors. In the year ended 30 September 2023, the Committee met
twice. The members of the Audit Committee comprises Dennis Ow (as Chairman)
and Min Yang.
Remuneration Committee
The Remuneration Committee reviews the performance of the Executive Director,
Chairman of the Board and senior management of the Group and make
recommendations to the Board on matters relating to their remuneration and
terms of service. The Remuneration Committee also makes recommendations to
the Board on proposals for the granting of share options and other equity
incentives pursuant to any employee share option scheme or equity incentive
plans in operation from time to time.
Directors' Report (continued)
The Remuneration Committee meets as and when necessary, but at least twice
each year. In exercising this role, the Directors have regard to the
recommendations put forward in the QCA Code and, where appropriate, the QCA
Remuneration Committee Guide and associated guidance. The members of the
Remuneration Committee comprise Geoff Baker (as Chairman) and Dennis
Ow.
Nomination Committee
The Nomination Committee leads the process for board appointments and makes
recommendations to the Board. The Nomination Committee evaluates the
balance of skills, experience, independence and knowledge on the board and,
in the light of this evaluation, prepares a description of the role and
capabilities required for a particular appointment.
The Nomination Committee meets as and when necessary, but at least twice
each year. The Nomination Committee comprises Geoff Baker (as Chairman) and
Dennis Ow.
The Directors are responsible for internal control in the Company and for
reviewing effectiveness. Due to the size of the Company, all key decisions are
made by the Board. The Directors have reviewed the effectiveness of the
Company's systems during the year under review and consider that there have
been no material losses, contingencies or uncertainties due to weaknesses in
the controls.
Details of the Company's business model and strategy are included in the
Chairman's Statement and Strategic Report.
Statement as to disclosure of information to auditors
The Directors confirm that:
· there is no relevant audit information of which the Company's
statutory auditor is unaware; and
· each Director has taken all the necessary steps he ought to have
taken as a Director in order to make himself aware of any relevant audit
information and to establish that the Company's statutory auditor is aware of
that information.
Auditors
The auditors, PKF Littlejohn LLP and have expressed their willingness to
continue in office and a resolution to reappoint them will be proposed at the
Annual General Meeting.
Approved on behalf of the Board of Directors by:
SIGNED
………………………………..
Geoffrey Baker
Director
Date: 30 January 2024
Directors' Remuneration Report
The Company established a remuneration committee pursuant to the acquisition
of 3DBT in May 2022. Until then, the Company has not had a separate
remuneration committee. The Board has instead periodically reviewed the
quantum of Directors' fees, taking into account the interests of shareholders
and the performance of the Company and the Directors.
The items included in this report are unaudited unless otherwise stated.
The Directors who held office at 30 September 2023 and who had beneficial
interests in the Ordinary Shares of the Company are summarised as follows:
Name of Director Position
Dr Che Conon Chief Executive Officer
Geoffrey Baker Executive Director
Min Yang Non-Executive Chairman
Dennis Kian Jing Ow Non-Executive Director
Directors' letters of appointment
Min Yang and Geoffrey Baker were each appointed by the Company pursuant to
letters of appointment dated 18 July 2019 for a period of 12 months and
thereafter subject to termination by either party on three months' notice. Ms
Yang was appointed as Chairman. The Non-Executive Directors each agreed to not
be remunerated until such time as an Acquisition was completed however, Mr
Baker has received £2,500 per month from April 2021 until May 2023. The
Non-Executive Directors have agreed to commit an equivalent of at least one
day a week to the Company. The Non-Executive Directors are not entitled to any
other benefits other than the reimbursement of their reasonable expenses. The
letters of appointment are governed by English law.
In May 2023, the Board considered the proposal that Geoff Baker's role and
remuneration be amended to take into account his increasing time commitment to
the Company. The remuneration committee approved the proposal to extended his
role to an executive position and increase in remuneration to £6,000 per
month.
Dennis Ow was appointed as a non-executive Director pursuant to a letter of
appointment dated 2 August 2021 for an initial period of 12 months and
thereafter subject to termination by either party on three months' notice. Mr
Ow was not entitled to any remuneration pursuant to his letter of appointment.
The appointment letter contains no payment for early termination or profit
sharing or commission arrangements.
The letters of appointment of each of the non-executive Directors were amended
pursuant to side letters dated 26 April 2022, effective on Admission to
provide that each non-executive Director will be paid £30,000 per annum
(commencing on Admission). The amended appointment letters contain no payment
for early termination or profit sharing or commission arrangements.
Dr Che Connon entered into a service agreement with the Company dated 26 April
2022 under which Dr Che Connon is employed as the Chief Executive Officer of
the Company from Admission and thereafter until terminated by either party
giving 3 months' prior written notice.
Dr Che Connon received an initial annual salary of £80,000 based on 2 days'
work per week and subject to proportional increase at £40,000 per annum per
extra day a week that is agreed between the parties. His salary was increased
to £120,000 per annum with effect from December 2022 when his time commitment
was increased to 3 days per week.
Directors' Remuneration Report (continued)
Dr Che Connon was entitled to a bonus payment of £10,000 to be paid if 3DBT
achieved agreed sales targets of City-mix or Etsyl products within 18 months
of the commencement of his employment. No bonuses have been paid under these
arrangements. Dr Che Connon is entitled to participate in the Restrictive
Share Plan and the EMI Option Plan. He is also entitled to the reimbursement
of his reasonable expenses. Dr Che Connon is not entitled to any benefits on
termination of employment.
Shareholders' returns
The Company expects that any returns for shareholders would derive primarily
from capital appreciation of the Ordinary Shares and any dividends paid
pursuant to the Company's dividend policy set out below.
Dividend policy
The Company intends to pay dividends on the Ordinary Shares at such times (if
any) and in such amounts (if any) as the Board determines appropriate in its
absolute discretion and in accordance with requirements of the Companies Act
2006.
Prior to revenue generation, it is unlikely that the Company will have any
earnings but to the extent the Company has any earnings it is the Company's
current intention to retain any such earnings for use in its business
operations, and the Company does not anticipate declaring any dividends in the
foreseeable future. The Company will only pay dividends to the extent that to
do so is in accordance with all applicable laws.
During the year ended 30 September 2023, there were no dividends paid (2022:
nil).
Particulars of Directors' remuneration (audited)
Totals
Year ended
Year ended Fees 30
30 September 2023 and salaries Restricted share awards September
2023
£ £ £
Executive Directors
Dr Che Connon 109,732 - 109,732
Non-executive Directors
Geoff Baker 47,500 - 47,500
Min Yang 30,000 - 30,000
Dennis Ow 30,000 - 30,000
217,232 - 217,232
Directors' Remuneration Report (continued)
Totals
Year ended
Year ended Fees 30
30 September 2022 and salaries Restricted share awards September
2022
£ £ £
Executive Directors
Dr Che Connon 26,667 87,794 114,461
Non-executive Directors
Geoff Baker 30,000 35,118 65,118
Min Yang 11,250 17,559 28,809
Dennis Ow 11,250 - 11,250
79,167 140,471 219,638
Statement of Directors' shareholding and share interests (audited)
The Directors who served during the year ended 30 September 2023, and their
interests at that date, are disclosed on pages 15 to 17. There were no changes
between the reporting date and the date of approval of this report.
UK Remuneration percentage changes
Geoff Baker's salary was increased from £2,500 per month to £6,000 per month
in May 2023, an increase of 140 per cent. This increase reflected a
substantial increase in his time commitment to the Company and his appointment
as an executive director from this date.
There were no other changes to the level of remuneration in the year ended 30
September 2023.
UK 10-year performance graph
The Directors have considered the requirement for a UK 10-year performance
graph comparing the Company's Total Shareholder Return with that of a
comparable indicator. The Directors do not currently consider that including
the graph will be meaningful because the Company has only been listed since
2017, is not paying dividends, is currently incurring losses as it gains scale
and has only recently completed its first acquisition. In addition, and as
mentioned above, the remuneration of Directors is not currently linked to
performance and we therefore do not consider the inclusion of this graph to be
useful to shareholders at the current time. The Directors will review the
inclusion of this table for future reports.
Consideration of shareholder views
The Board considers shareholder feedback received. This feedback, plus any
additional feedback received from time to time, is considered as part of the
Company's annual policy on remuneration.
Directors' Remuneration Report (continued)
Policy for salary reviews
The Company may from time to time seek to review salary levels of Directors,
taking into account performance, time spent in the role and market data for
the relevant role.
Other matters
None of the Directors hold options, warrants or any form of convertible
security in respect of Ordinary Shares. Save as set out above and below, there
is currently no intention for the Company to make incentivisation arrangements
for the Directors to be involved in the capital of the Company or otherwise
any employee share option arrangements.
On 16 May 2022, the Company resolved to adopt the Restricted Share Plan, which
will allow for the grant of shares to directors and selected employees
subject to restrictions and forfeiture risks which will be lifted after a
certain period. It is intended that participants will be executive
directors and senior employees of the Company. No more than 15% of the
issued share capital of the Company from time to time can be issued or
issuable under the plan and other grant of shares by the Company which are
subject to restrictions and forfeiture risks. A total of 7,798,491
shares were issued including 6,623,793 shares issued to directors. Further
details are set out in Note 18 to the Consolidated Financial Statements.
On 16 May 2022 the Company resolved to adopt the Employee Share Option Plan
("ESOP") which will allow for the grant of EMI options and non-approved share
options over shares in the Company to be granted to selected individuals. An
option will become exercisable at some future date and the participant will
then have the right to acquire shares at a price (the "option price") fixed
when the option was granted. The ESOP will be administered by the board.
Further details are set out in Note 18 to the Consolidated Financial
Statements No options have been issued under the ESOP at the date of this
Report.
The Company does not pay pension amounts in relation to any of the Directors
remuneration. The Company has not paid out any excess retirement benefits to
any Directors.
Approved on behalf of the Board of Directors by:
SIGNED
………………………………………….
Geoffrey Baker
Director
Date: 30 January 2024
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the Group's
and Parent Company's 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
Group financial statements in accordance with UK-adopted International
Accounting Standards and Company financial statements under FRS 101, both in
conformity with the requirements of the Companies Act 2006. 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 the affairs of
the Company and the Group and of the profit or loss for that period.
In preparing these financial statements, the Directors are also required to:
- select suitable accounting policies and then apply them
consistently;
- make judgements and accounting estimates that are reasonable and
prudent;
- state whether they have been prepared in accordance with UK-adopted
international accounting standards or UK Financial Reporting Standards and
with the requirements of the Companies Act 2006. We therefore seek to
operate within a corporate culture that is based on sound ethical values and
behaviours. We do this using certain rule-based procedures (such as our formal
Corporate Code of Conduct) and, more importantly, by the behavioural example
of individual Board members and senior managers. These values, which we seek
to instil throughout the Company, include integrity, respect, honesty, and
transparency. As a small company these characteristics are far more visible to
staff than might otherwise be the case. We also hold internal meetings at
which Directors and staff discuss matters, both formally and informally.and
with the requirements of the C and with the Companies Act 2006 and subject to
any material departures disclosed and explained in the financial statements;
and
- prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's and Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and 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 responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Directors' responsibility statement pursuant to disclosure and Transparency
Rules
The Directors are responsible for preparing the Financial Statements in
accordance with the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority ("DTR") and with UK-adopted International
Accounting Standards and with the requirements of the Companies Act 2006..
Each of the Directors, whose names and functions as listed in the Board of
Directors confirm that, to the best of their knowledge:
· the financial statements, prepared in accordance with UK-adopted
International Accounting Standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company;
Statement of Directors' Responsibilities (continued)
· the Strategic and Directors' Report include a fair review of the
development and performance of the business and the financial position of the
Group and Parent Company, together with a description of the principal risks
and uncertainties that it faces; and
· the Annual Report and financial statements, taken as a whole, are
fair, balanced and understandable and provide the information necessary for
shareholders to assess the Group's and Parent Company's performance, business
model and strategy.
Approved on behalf of the Board of Directors by:
SIGNED
………………………………………….
Geoffrey Baker
Director
Date: 30 January 2024
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BSF ENTERPRISE PLC
Opinion
We have audited the financial statements of BSF Enterprise Plc (the 'parent
company') for the year ended 30 September 2023 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated and Parent Company
Statements of Financial Position, the Consolidated and Parent Company
Statements of Changes in Equity, the Consolidated Statement of Cash Flows 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 UK-adopted international accounting standards. The
financial reporting framework that has been applied in the preparation of the
parent company financial statements is applicable law and United Kingdom
Accounting Standards, including FRS 101 Reduced Disclosure Framework (United
Kingdom Generally Accepted Accounting Practice) and as applied in accordance
with the provisions of the Companies Act 2006.
In our opinion:
· the financial statements give a true and fair view of the state of
the group's and of the parent company's affairs as at 30 September 2023 and of
the group's loss for the year then ended;
· the group's financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
· the parent company financial statements have been properly prepared
in accordance with United Kingdom Generally Accepted Accounting Practice; 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 group and parent 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 public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements, which indicates that
it will be necessary for the group to obtain additional funding through
financing arrangements or the issue of equity in order to continue as a going
concern. As stated in note 2, these events or conditions, along with the other
matters as set forth in note 2, indicate that a material uncertainty exists
that may cast significant doubt on the group's and parent company's ability to
continue as a going concern. Our opinion is not modified in respect of this
matter.
In auditing the financial statements, we have concluded that the director's
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the group's and parent company's ability to continue to adopt
the going concern basis of accounting included:
· Challenging the assumptions made and key variables included in the
cash flow forecasts prepared by the directors to assess the group's and parent
company's ability to meet their financial obligations as they fall due for a
period of at least 12 months from the dates of approval of the financial
statements.
· Reviewing the consistency of the committed cash flows against
contractual arrangements and compared general overheads in the forecasts to
current run rates. The forecasts demonstrated that the group and parent
company will require additional funding during the going concern period to
meet their liabilities as and when they fall due, and a material uncertainty
has been disclosed above in respect to this.
· As disclosed in note 2, the group's cash position shows a balance of
£2,319,061 as at 30 September 2023. The group's cost base has increased as a
result of the increase in research and development activities in the year. Due
to the lack of revenue streams and the increased cash burn rate, the group's
and the parent company's ability to continue as a going concern are dependent
on raising additional funding in the second half of 2024. We have discussed
with the directors the strategies that they are pursuing to secure further
funding if and when required. We note that the group have successfully raised
funds from issuing equity in the past but at the date of this report there are
no legally binding agreements in place to cover a funding deficit in these
scenarios.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of materiality. We
set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and
the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and on the financial statements as a whole.
Based on our professional judgement, the materiality for the group financial
statements as a whole was calculated based on 2% of net assets. We consider
net assets to be the most significant determinant of the group's financial
performance used by shareholders as the group continues its research
activities. Materiality of the parent company was based on 2% of net assets
and was below the group materiality.
Whilst materiality for the group financial statements as a whole was £47,000
(2022: £38,000), the significant components of the group were audited to a
lower level of materiality. The parent company materiality was £46,000 (2022:
£37,000) with the other components being audited to a materiality of £32,900
(2022: £20,000). These materiality levels were used to determine the
financial statement areas that are included within the scope of our audit work
and the extent of sample sizes during the audit.
Performance materiality is the application of materiality at the individual
account or balance level set at an amount to reduce to an appropriately low
level the probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality. Performance materiality was set at 70% of
the above materiality levels for both the group and parent company, equating
to £32,900 (2022: £26,000) and £32,200 (2022: £25,900) respectively, based
upon our assessment of the risk of misstatement.
We agreed with management that we would report to the audit committee all
individual audit differences identified during the course of our audit in
excess of £2,350 (2022: £2,000) for the group financial statements and
£2,300 (2022: £1,850) for the parent company financial statements. We also
agreed to report differences below these thresholds that, in our view
warranted reporting on qualitative grounds.
Our approach to the audit
Our group audit scope focused on the group's principal operating location
being Newcastle which was subject to a full scope audit. Together with the
parent company, which was also subject to a full scope audit, these represent
the significant components of the group.
Entities subject to full scope audits account for 100% of the total assets.
The audits of each of the significant components were performed in the United
Kingdom. All of the audits were conducted by PKF Littlejohn LLP.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter
described in the Material uncertainty related to going concern section we
have determined the matters described below to be the key audit matters to be
communicated in our report.
Key Audit Matter How our scope addressed this matter
Valuation of goodwill on acquisition of 3D Bio Tissues Limited (Note 10)
The Group carries a material amount of goodwill (£2.5m), relating to the Our work in this area included but was not limited to:
subsidiary undertaking acquired in 2022, 3D Bio-Tissues Limited.
· Discussing with management their impairment assessment of goodwill
There is a significant risk of overstatement of goodwill due to the fact that and challenging the assumptions and key inputs used for reasonableness.
the investments are loss making.
· Reviewing post year end activity, such as review of year end
Given the aforementioned, goodwill may be impaired, and management need to board minutes, regulatory news services, and management plans regarding
include significant estimates and judgements in their goodwill impairment additional fundraising; and
assessment and as such the valuation of goodwill was deemed to be a key audit
matter. · Evaluating the presentation and disclosure in the financial
statements.
Key observations
We are satisfied with management's assessment that no impairment charge is
necessary in respect of the goodwill balance.
Carrying value of investment in subsidiaries (3D Bio-Tissues) in the parent
company financial statements (Note 5 to the parent company financial
statements)
Investments in subsidiary undertakings is the most significant balance in the Our work in this area included but was not limited to:
financial statements (£3.9m).
· Reviewing ownership documents for investment in subsidiaries held
Under International Accounting Standard 36 'Impairment of Assets' ('IAS 36'), by the parent company;
companies are required to assess whether there is any indication that an asset
may be impaired at each reporting date. · Reviewing the investment balances for any indicators of impairment
in accordance with IAS 36 and challenging management on the assumptions
The carrying value of investment in subsidiary (3D Bio Tissues Limited) is within; and
ultimately dependent on the value of the underlying assets and the
subsidiary's ability to generate future cash flows. Since 3D Bio-Tissues · Evaluating the presentation and disclosure in the financial
Limited is in the research and development phase, it is difficult to statements
definitively determine the value of the investment. Therefore is a risk that
the investments balances are not fully recoverable.
Valuation for the investments in subsidiary is based on significant judgments Key observations
and estimates made by the directors and as such the carrying value of
investments was deemed to be a key audit matter. We are satisfied with management's assessment that that no impairment charge
is necessary in respect of the investments in subsidiaries.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the group and parent company 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. 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 course of 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 this gives rise to a
material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors' remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and their environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the parent company financial statements and the part of the
directors' remuneration report to be audited are not in agreement with the
accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are
not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities, the
directors are responsible for the preparation of the group and parent company
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 group and parent company financial statements, the directors
are responsible for assessing the group's and the parent 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 group or the parent company or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the group and parent company and the
sector in which they operate to identify laws and regulations that could
reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with management,
industry research, application of cumulative audit knowledge and experience of
the sector.
· We determined the principal laws and regulations relevant to the
group and the parent company in this regard to be those arising from:
o Companies Act 2006;
o International accounting standards;
o Listing rules; and
o Disclosure Guidance and Transparency Rules
· We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the group
and parent company with those laws and regulations. These procedures included,
but were not limited to:
o Enquiries of management;
o Review of Board minutes and regulatory news service announcements; and
o Review of legal and professional fees in the nominal ledger
· We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override
of controls, the potential of management bias was identified in relation to
the impairment of goodwill and the carrying value of investments and we
addressed this by challenging the assumptions and judgements made by
management when auditing that significant accounting estimate.
· As in all of our audits, we addressed the risk of fraud arising from
management override of controls by performing audit procedures which included,
but were not limited to: the testing of journals; reviewing accounting
estimates for evidence of bias; and evaluating the business rationale of any
significant transactions that are unusual or outside the normal course of
business.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Other matters which we are required to address
We were appointed by the Board on 21 November 2019 to audit the financial
statements for the period ending 30 September 2023 and subsequent financial
periods. Our total uninterrupted period of engagement is 5 years, covering the
periods ending 30 September 2019 to 30 September 2023.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the group or the parent company and we remain independent of the
group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit
committee.
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.
SIGNED
Daniel Hutson (Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn
LLP
Canary Wharf
Statutory
Auditor
London E14 4HD
30 January 2024
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2023
Year ended 30 September Year ended 30 September
2023 2022
Note £ £
Continuing operations
Sales 4 12,942 -
Cost of sales 6 (71,324) -
Gross loss (58,382) -
Other income 5 87,226 -
Administrative expenses 6 (1,599,152) (927,322)
Operating loss (1,570,308) (927,322)
Finance expense - right-of use lease liabilities (10,141) (2,110)
13
Loss before taxation (1,580,449) (929,432)
Taxation credit / (expense) 8 79,407 (607)
Loss for the year (1,501,042) (930,039)
Other comprehensive income for the year - -
Total comprehensive income for the year attributable to the equity owners (1,501,042) (930,039)
Earnings per share
Basic and diluted (pence per share) 9 (1.59) (2.06)
There are no items of other comprehensive income.
The notes on pages 47 to 78 form an integral part of these consolidated
financial statements.
Consolidated Statement of Financial Position as at 30 September 2023 (Registered number 11554014)
2023 2022
Note £ £
Assets
Non-current assets
Property, plant and equipment 11 105,032 73,488
Right-of-use assets 12 147,801 223,560
Intangible assets 10 2,485,290 2,485,290
Total non-current assets 2,738,123 2,782,338
Current assets
Cash and cash equivalents 14 2,319,061 1,061,529
Trade and other receivables 16 157,612 132,762
Corporation tax receivable 8 - 33,950
Inventory 15 45,811 21,855
Total current assets 2,522,484 1,250,096
Total assets 5,260,607 4,032,434
Equity and liabilities
Capital and reserves
Share capital - issued and fully paid 18 955,384 781,884
Share capital - issued but unpaid 18 77,985 77,985
Share premium 18 6,292,888 3,711,576
Warrant reserve 18 34,785 12,537
Retained deficit (2,502,062) (1,001,020)
Total equity 4,858,980 3,582,962
Liabilities
Current liabilities
Trade and other payables 17 166,764 142,821
Taxes and social security 57,973 60,809
Lease liabilities 13 78,883 74,946
303,620 278,576
Non-current liabilities
Lease liabilities 13 78,051 156,933
Deferred tax 8 19,956 13,963
98,007 170,896
Total liabilities 401,627 449,472
Total equity and liabilities 5,260,607 4,032,434
The notes on pages 47 to 78 form an integral part of these consolidated
financial statements. This report was approved by the Board of Directors and
authorised for issue on 30 January 2024 and signed on its behalf by:
SIGNED
……………………………
Geoffrey Baker, Director
Consolidated Statement of Changes in Equity for the year ended 30 September 2023
Share capital issued and paid up Share capital issued and unpaid Share premium Warrant reserve Retained deficit Total
£ £ £ £ £ £
As at 1 October 2021 203,400 407,984 (246,568) 364,816
- -
Comprehensive income for the period
Loss for the year - - (930,039) (930,039)
- -
Total comprehensive loss for the year - - (930,039) (930,039)
- -
Issue of shares 578,484 77,985 3,762,931 - - 4,419,400
Transfer on issue of restricted shares - - 175,587 175,587
-
-
Issue of warrants - (12,537) - -
- 12,537
Share issue costs - (446,802) - (446,802)
- -
Transactions with shareholders 578,484 3,303,592 175,587 4,148,185
77,985 12,537
As at 30 September 2022 781,884 3,711,576 (1,001,020) 3,582,962
77,985 12,537
Comprehensive income for the year
Loss for the year - - (1,501,042) (1,501,042)
- -
Total comprehensive loss for the year - - (1,501,042) (1,501,042)
- -
Issue of shares 173,500 - 2,775,000 - - 2,948,500
Issue of warrants - (22,248) - -
- 22,248
Share issue costs - (171,440) - (171,440)
- -
Transactions with shareholders 173,500 2,581,312 - 2,777,060
- 22,248
As at 30 September 2023 955,384 6,292,888 (2,502,062) 4,858,980
77,985 34,785
The notes on pages 47 to 78 form an integral part of these consolidated
financial statements.
Consolidated Statement of Cash Flows
for the year ended 30 September 2023
Year ended 30 September Year ended 30 September
2023 2022
Note £ £
Cash flow from operating activities
Loss after tax (1501,042) (930,039)
Taxation (79,407) 607
Depreciation 109,073 21,522
Expense recognised on issue of restricted shares 18 - 175,587
Tax received 119,350 -
Changes in working capital:
Increase in trade and other payables 26,022 131,071
(Increase) / decrease in receivables (29,774) 34,013
Increase in inventory (23,956) -
Decrease in related party balances 21 - (100,000)
Net cash used in operating activities (1,379,734) (667,239)
Cash flow from investing activities
Cash acquired on purchase of subsidiary 10 - 12,370
Acquisition of plant and equipment 11 (64,848) (10,620)
Net cash from investing activities (64,848) 1,750
Cash flow from financing activities
Issue of shares 18 2,948,500 1,750,000
Costs of share issues 18 (171,440) (368,817)
Repayment of lease liabilities 13 (74,946) (14,033)
Net cash from financing activities 2,702,114 1,367,150
Net cash flow for the year 1,257,532 701,661
Cash and cash equivalents at beginning of the year 14 1,061,529 359,868
Cash and cash equivalents at end of the year 14 2,319,061 1,061,529
Material non-cash transactions:
The Company's acquisition of 3DBT in 2022 was a non-cash transaction satisfied
wholly by the issue of shares in the Company, as described in Note 9 below. No
net debt reconciliation is provided as the Group has no debt.
The notes on pages 47 to 78 form an integral part of these consolidated
financial statements.
Notes to the Financial Statements
1. General information
The Company is a public limited liability company, listed on the London Stock
Exchange, incorporated and registered in England and Wales on 5 September 2018
with registered company number 11554014.
The principal activity of the Company is to undertake the acquisition of
businesses in the biotechnology, innovative marketing and e-commerce sectors.
The address of the registered office is Aldgate Tower, 2 Leman Street, London,
E1 8QN.
On 16 May 2022, the Company completed the acquisition of the entire issued
share capital of 3D Bio-Tissues Limited ("3DBT"), (together, the "Group"), a
biotechnology start-up and spin-out from the University of Newcastle. 3DBT has
developed a propriety platform technology termed "tissue templating" that
facilitates the production of a variety of animal tissue types for multiple
uses, commonly referred to as "tissue engineering".
The Company has a standard listing on the London Stock Exchange. The Company's
Ordinary Shares commenced trading on the OTCQB Venture Market in the United
States on 24 May 2023, under the symbol BSFAF.
The consolidated financial statements include the financial statements of the
Company and its subsidiary (the "Group") as follows:
Name Place of incorporation Registered address Principal activity Effective interest
30.09.2023 30.09.2022
3D Bio-Tissues Limited England and Wales The Biosphere Draymans Way, Newcastle Helix, Newcastle Upon Tyne, NE4 5BX Biotechnology start-up 100% 100%
BSF Enterprise (Hong Kong) Limited Hong Kong 11/F Times Tower, 391-407 Jaffe Road, Causeway Bay Hong Kong Biotechnology start-up 100% -
2. Accounting policies
The principal accounting policies applied in the preparation of the financial
statements are set out below. These policies have been consistently applied to
the period presented, unless otherwise stated.
47
a) Basis of preparation
The financial statements have been prepared in accordance with UK-adopted
International Accounting Standards in conformity with the requirements of the
Companies Act 2006. The financial statements have been prepared using the
historical cost basis.
The results for the year ended 30 September 2022 include those of 3DBT from
acquisition in May 2022. Therefore, the comparative information is not
entirely comparable.
The financial statements are presented in British Pounds Sterling, the
currency of the primary economic environment in which the Company operate and
its functional currency.
The financial statements are presented in £ unless otherwise stated.
b) New standards, amendments to standards and interpretations:
New standards, amendments to standards and interpretations:
There were no new standards or interpretations impacting the Group that have
been adopted in the annual financial statements for the year ended 30
September 2023, and which have given rise to changes in the Group's accounting
policies.
Standards and interpretations in issue but not yet effective or not yet
relevant
At the date of authorisation of these financial statements the following
Standards and Interpretations which have not been applied in these financial
statements were in issue but not yet effective:
Effective annual
periods beginning
before or after
IAS 1 Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice 1(st) January 2023
Statement 2);
IAS 8 Amendments regarding the definition of accounting estimates 1(st) January 2023
IAS 12 Amendments regarding deferred tax on leases and decommissioning obligations 1(st) January 2023
IFRS 17 Amendments to address concerns and implementation challenges that were 1(st) January 2023
identified after IFRS 17 was published
Effective annual periods beginning before or after
IAS 1 Amendments to defer the effective date of January 2020 amendments regarding 1(st) January 2023
the disclosure of accounting policies
IFRS 16 Leases (Amendment - Liability in a Sale and Leaseback) 1(st) January 2024
IAS 1 Presentation of Financial Statements (Amendment - classification of 1(st) January 2024
Liabilities as Current or Non-current)
IAS 1 Presentation of Financial Statements (Amendment - Non-current Liabilities with 1(st) January 2024
Covenants)
The Company intends to adopt these Standards for the respective financial
years beginning after the effective dates.
The Directors do not anticipate the adoption of any of these standards issued
by IASB, but not yet effective, to have a material impact on the financial
statements of the Company.
c) Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and its subsidiaries made up to the end of the reporting period. A
subsidiary is an entity over which the Group has control. The Group controls
an investee if the Group has power over the investee, exposure to variable
returns from the investee, and the ability to use its power to affect those
variable returns.
The consolidated financial statements present the results of the Company and
its subsidiaries as if they formed a single entity. Inter-company balances and
transactions between Group companies are therefore eliminated in full. The
financial information of subsidiaries is included in the Group's financial
statements from the date that control commences until the date that control
ceases.
On 16 May 2022, the Company completed a conditional share purchase agreement
(the "SPA") with 3D Bio-Tissues Limited ("3DBT'') for the acquisition by the
Company of 100% of the issued share capital of 3DBT (the "Transaction") which
is more fully described in Note 9.
The Directors have considered who the acquiring party is and concluded that it
is the Company, due to:
- a greater proportion of share capital in the Group being held by
shareholders of BSF Plc, rather than pre-acquisition shareholders of 3DBT,
meaning that there has been no change of control;
- 3DBT was a small, early-stage pre-revenue entity not dissimilar to the
Company. The fair value of its net assets on acquisition were smaller than
that of the Company at only £13,140;
- BSF Enterprise Plc's shareholders have the ability to appoint or remove a
majority of the members of the Board;
- greater Board representation in the Group of the BSF Enterprise Plc Board of
directors rather than pre-acquisition members of the 3DBT Board; and
- the composition of the senior management of the Group consists mostly of BSF
Enterprise Plc management.
Accordingly, the Company was deemed to be the acquiring party for accounting
purposes. The acquisition of 3DBT has therefore been accounted for under the
acquisition method.
Under the acquisition method, the results of 3DBT are included from the date
of acquisition. At the date of acquisition, the fair values of the net assets
of 3DBT have been determined and these values are reflected in the
Consolidated Financial Statements. The cost of acquisition was measured at
the aggregate of the fair value of the shares issued by the Company, at the
date of exchange, in exchange for control of the acquiree. Any excess of the
purchase consideration of the business combination over the fair value of the
identifiable assets and liabilities acquired is recognised as goodwill.
Goodwill, if any, is not amortised but reviewed for impairment at least
annually. If the consideration is less than the fair value of assets and
liabilities acquired, the difference is recognised directly in the statement
of comprehensive income.
Acquisition-related costs are expensed as incurred.
d) Going concern
The financial position of the Group, its cash flows and liquidity position are
set out in these financial statements. As at 30 September 2023, the Group had
cash and cash equivalents of £2,319,061. As at the date of this report, the
Group had approximately £1,684,000 of cash and cash equivalents.
The Group has prepared monthly cash flow forecasts based on reasonable
estimates of key variables including operating costs and capital expenditure
through to March 2025 that supports the conclusion of the Directors that they
expect sufficient funding to be available to meet the Group's anticipated cash
flow requirements to this date.
These cashflow forecasts are subject to a number of risks and uncertainties,
in particular the ability of the Group to achieve additional funding to
support the planned levels of expenditure.
Management has performed detailed analyses of these forecasts to assess the
economic impact of various downside scenarios from a going concern
perspective. Based on the financial and operational performance analysis and
reviews done for the period up to January 2024 the Company is operating in
line with its budget in terms of costs.
The assessment as to whether the going concern basis is appropriate has also
taken into account all information available up to the date of authorisation
of these financial statements.
The Group will need additional funding to finance ongoing operations and any
acquisitions it might make. There can be no guarantee that sufficient funds
will be raised and this creates a material uncertainty that may cause
significant doubt about the going concern basis of the Group. The Board is
confident however that sufficient additional capital will be raised to ensure
adequate funds are available to the Group. The Board has therefore concluded
that the going concern basis remains appropriate in the preparation of these
Consolidated Financial Statements due to the anticipated availability of
sufficient financial resources in the 12 months from the date of the financial
statements.
e) Segment reporting
IFRS 8 defines operating segments as those activities of an entity about which
separate financial information is available and which are evaluated by the
Board of Directors to assess performance and determine the allocation of
resources. The Board of Directors is of the opinion that under IFRS 8 the
Group has only one operating segment, being that of biotechnology. The
Company was incorporated in 2018 with the objective of creating value for its
shareholders through an acquisition-led growth strategy with a focus on
acquiring businesses in the biotechnology, innovative marketing and e-commerce
sectors. The acquisition of 3DBT is an integral part of the Group's strategy
for this sector. The operations of the Company and 3DBT are within the UK
whilst those of BSF Hong Kong Limited, which are not yet significant, are
conducted in Hong Kong.
The Board of Directors assesses the performance of the operating segment using
financial information that is measured and presented in a manner consistent
with that in the Financial Statements. Segmental reporting will be reviewed
and considered in light of the development of the Group's business over the
next reporting period.
f) Revenue
The Group's revenue represents the fair value of the consideration received or
receivable for the rendering of services and sale of goods, net of value added
tax.
Revenue is recognised at an amount that reflects the consideration to which
the entity expects to be entitled in exchange for transferring goods or
services to a customer net of sales taxes and discounts. A performance
obligation may be satisfied at a point in time or over time. The amount of
revenue recognised is the amount allocated to the satisfied performance
obligation.
(i) Performance obligations and timing of revenue recognition
Sales of goods
The Group derives revenue from selling consumable with revenue recognised at a
point in time when control of the goods has transferred to the customer.
Revenue from sales of consumables to consumers is recognised when the order is
despatched. There is limited judgement needed in identifying the point at
which the performance obligation is satisfied.
Sales of services
The Group enters into contracts for the provision of research services with
its customers. Research revenues are recognised as the services are performed
and the obligations are discharged, or if there are no key performance
obligations, straight line over the relevant period. This method best
depicts the transfer of services to the customer as there is no reliable
prediction that can be made as to if and when any individual customer will
require the service.
(ii) Determining the transaction price
Most of the Group's revenue is derived from fixed price contracts and
therefore the amount of revenue to be earned from each contract is determined
by reference to those fixed prices.
(iii)Allocating amounts to performance obligations
For most contracts, there is a fixed unit price for each service or product
sold. Therefore, there is no judgement involved in allocating the contract
price to each sale.
g) Grants receivable
The Group recognises grant income only when there is reasonable assurance that
the entity will comply with the conditions attached to them and the grants
will be received. Grants are recognised in profit or loss on a systematic
basis over the periods in which the entity recognises as expenses the related
costs for which the grants are intended to compensate.
h) Employee benefits
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis
and are expensed as the related service is provided. A liability is recognised
for the amount expected to be paid under short-term cash bonus or
profit-sharing plans if the Group has a present legal or constructive
obligation to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
Long-term benefits
Defined contribution plans
The income statement expense for the defined contribution pension plans
operated represents the contributions payable for the year. Once the
contributions have been paid, the Group has no further liabilities in respect
of the defined contribution plans.
i) Property, plant and equipment
Property and equipment are stated at cost less accumulated depreciation and
impairment losses, if any. The cost of an item of property, plant and
equipment initially recognised includes its purchase price and any cost that
is directly attributable to bringing the asset to the location and condition
necessary for it to be capable of operating in the manner intended by the
Group.
Property, plant and equipment are generally depreciated on a straight-line
basis over their estimated useful live as follows:
Plant and equipment: 20 per cent. straight line
Depreciation methods, useful lives and residual values are reviewed at
each balance sheet date.
j) Intangible assets
Goodwill
Goodwill represents the amount by which the fair value of the cost of a
business combination exceeds the fair value of the net assets acquired.
Goodwill is not amortised and is stated at cost less any accumulated
impairment losses.
The recoverable amount of goodwill is tested for impairment annually or when
events or changes in circumstance indicate that it might be impaired.
Impairment charges are deducted from the carrying value and recognised
immediately in the income statement. For the purpose of impairment testing,
goodwill is allocated to each of the Group's cash generating units expected to
benefit from the synergies of the combination. If the recoverable amount of
the cash generating unit is less than the carrying amount of the unit, the
impairment loss is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets of the unit
pro-rata on the basis of the carrying amount of each asset in the unit. An
impairment loss recognised for goodwill is not reversed in a subsequent
period.
k) Research and development expenditure
Research expenditure is recognised as an expense when it is incurred.
Development expenditure is recognised as an expense except that costs incurred
on development projects are capitalised as long-term assets to the extent that
such expenditure is expected to generate future economic benefits. Development
expenditure is capitalised if, and only if an entity can demonstrate all of
the following:-
(i) its ability to measure reliably the expenditure attributable to the
asset under development;
(ii) the product or process is technically and commercially feasible;
(iii) its future economic benefits are probable;
(iv) its ability to use or sell the developed asset; and
(v) the availability of adequate technical, financial and other resources to
complete the asset under development.
Capitalised development expenditure is measured at cost less accumulated
amortisation and impairment losses, if any. Development expenditure initially
recognised as an expense is not recognised as assets in subsequent periods.
No amounts were capitalised in the year.
l) Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The
right-of-use asset is measured at cost, which comprises the initial amount of
the lease liability, adjusted for, as applicable, any lease payments made at
or before the commencement date net of any lease incentives received, any
initial direct costs incurred, and an estimate of costs expected to be
incurred for dismantling and removing the underlying asset, and restoring the
site or asset.
Right-of-use assets are depreciated on a straight-line basis over the
unexpired period of the lease or the estimated useful life of the asset,
whichever is the shorter. Right-of use assets are subject to impairment or
adjusted for any re-measurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding
lease liability for short-term leases with terms of 12 months or less and
leases of low-value assets. Lease payments on these assets are expensed to
profit or loss as incurred.
m) Leases
The determination of whether an arrangement is, or contains, a lease is based
on the substance of the arrangement at inception date: whether fulfilment of
the arrangement is dependent on the use of a specific asset or assets or the
arrangement conveys a right to use the asset.
All leases are accounted for by recognising a right-of-use asset and a lease
liability except for:
· leases of low value assets; and
· leases with a duration of 12 months or less.
Identifying leases
The Group accounts for a contract, or a portion of a contract, as a lease when
it conveys the right to use an asset for a period of time in exchange for
consideration. Leases are those contracts that satisfy the following criteria:
· there is an identified asset;
· the Group obtains substantially all the economic benefits from use
of the asset; and
· the Group has the right to direct use of the asset.
The Directors consider whether the supplier has substantive substitution
rights. If the supplier does have those rights, the contract is not identified
as giving rise to a lease.
In determining whether the Group obtains substantially all the economic
benefits that arise from use of the asset, the Directors consider only the
economic benefits that arise from use of the asset, not those incidental to
legal ownership or other potential benefits.
In determining whether the Group has the right to direct use of the asset, the
Directors consider whether the Group directs how and for what purpose the
asset is used throughout the period of use. If there are no significant
decisions to be made because they are pre-determined due to the nature of the
asset, the Directors consider whether the Group was involved in the design of
the asset in a way that predetermines how and for what purpose the asset will
be used throughout the period of use. If the contract or portion of a contract
does not satisfy these criteria, the Group applies other applicable IFRSs
rather than IFRS 16 "Leases".
Lease liabilities are measured at the present value of the contractual
payments due to the lessor over the lease term, with the discount rate
determined by reference to the rate inherent in the lease unless (as is
typically the case) this is not readily determinable, in which case the
Group's incremental borrowing rate on commencement of the lease is used.
Variable lease payments are only included in the measurement of the lease
liability if they depend on an index or rate. In such cases, the initial
measurement of the lease liability assumes the variable element will remain
unchanged throughout the lease term. Other variable lease payments are
expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also
includes:
· amounts expected to be payable under any residual value guarantee;
· the exercise price of any purchase option granted in favour of the
company if it is reasonably certain to assess that option; and
· any penalties payable for terminating the lease, if the term of the
lease has been estimated on the basis of termination option being exercised.
Subsequent to initial measurement lease liabilities increase as a result of
interest charged at a constant rate on the balance outstanding and are reduced
for lease payments made. Right-of-use assets are amortised on a straight-line
basis over the remaining term of the lease or over the remaining economic life
of the asset if, rarely, this is judged to be shorter than the lease term.
When the Group revises its estimate of the term of any lease (because, for
example, it re-assesses the probability of a lessee extension or termination
option being exercised), it adjusts the carrying amount of the lease liability
to reflect the payments to make over the revised term, which are discounted at
the same discount rate that applied on lease commencement. The carrying value
of lease liabilities is similarly revised when the variable element of future
lease payments dependent on a rate or index is revised. In both cases an
equivalent adjustment is made to the carrying value of the right-of-use asset,
with the revised carrying amount being amortised over the remaining (revised)
lease term.
n) Taxation
Tax currently payable is based on taxable profit for the year. Taxable profit
differs from profit as reported in the income statement because it excludes
items of income and expense that are taxable or deductible in other years and
it further excludes items that are never taxable or deductible. The Company's
liability for current tax is calculated using tax rates that have been enacted
or substantively enacted by the balance sheet date.
Deferred tax is recognised on differences between the carrying amounts of
assets and liabilities in the financial 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 initial recognition of goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Company is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
year when the liability is settled, or the asset realised. Deferred tax is
charged or credited to profit or loss, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and
liabilities on a net basis.
o) Financial instruments
Initial recognition
A financial asset or financial liability is recognised in the statement of
financial position of the Company when it arises or when the Company becomes
part of the contractual terms of the financial instrument.
Classification
Financial assets at amortised cost
The Company measures financial assets at amortised cost if both of the
following conditions are met:
- the asset is held within a business model whose objective is to
collect contractual cash flows; and
- the contractual terms of the financial asset generating cash flows
at specified dates only pertain to capital and interest payments on the
balance of the initial capital.
Financial assets which are measured at amortised cost, are measured using the
Effective Interest Rate Method (EIR) and are subject to impairment. Gains and
losses are recognised in profit or loss when the asset is derecognised,
modified or impaired.
Financial liabilities at amortised cost
Financial liabilities measured at amortised cost using the effective interest
rate method include current borrowings and trade and other payables that are
short term in nature. Financial liabilities are derecognised if the Company's
obligations specified in the contract expire or are discharged or cancelled.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the effective
interest rate ("EIR"). The EIR amortisation is included as finance costs in
profit or loss. Trade payables other payables are non-interest bearing and are
stated at amortised cost using the effective interest method.
Derecognition
A financial asset is derecognised when:
- the rights to receive cash flows from the asset have expired, or
- the Group has transferred its rights to receive cash flows from the
asset or has undertaken the commitment to fully pay the cash flows received
without significant delay to a third party under an arrangement and has either
(a) transferred substantially all the risks and the assets of the asset or (b)
has neither transferred nor held substantially all the risks and estimates of
the asset but has transferred the control of the asset.
Impairment
The Group recognises a provision for impairment for expected credit losses
regarding all financial assets. Expected credit losses are based on the
balance between all the payable contractual cash flows and all discounted cash
flows that the Group expects to receive. Regarding trade receivables, the
Group applies the IFRS 9 simplified approach in order to calculate expected
credit losses. Therefore, at every reporting date, provision for losses
regarding a financial instrument is measured at an amount equal to the
expected credit losses over its lifetime without monitoring changes in credit
risk. To measure expected credit losses, trade receivables and contract assets
have been grouped based on shared risk characteristics.
Trade and other receivables
Trade and other receivables are initially recognised at fair value when
related amounts are invoiced then carried at this amount less expected credit
losses.
IFRS 9 "Financial Instruments" requires an expected credit loss model as
opposed to an incurred credit loss model under IAS 39 "Financial Instruments:
Recognition and Measurement". The expected credit loss (ECL) model requires
the Group to account for expected credit losses and changes in those expected
credit losses at each reporting date to reflect changes in credit risk since
initial recognition of the financial assets. The credit event does not have to
occur before credit losses are recognised. IFRS 9 "Financial Instruments"
allows for a simplified approach for measuring the loss allowance at an amount
equal to lifetime expected credit losses for trade receivables and contract
assets.
The Group has one type of financial asset subject to the expected credit loss
model: trade receivables.
The Group recognises a loss allowance for expected credit losses on trade
receivables. The amount of expected credit losses is updated at each reporting
date to reflect changes in credit risk since initial recognition of the
respective financial instrument.
The expected credit losses are estimated using a provision based on the
Group's historical credit loss experience, adjusted for factors that are
specific to the debtors, general economic conditions and an assessment of both
the current as well as the forecast direction of conditions at the reporting
date, including time value of money where appropriate.
As the Group is at an early stage and the volume of sales is very low, it does
not have significant amounts of historic information on credit losses.
Accordingly, only specific provisions have been made. To analyse and adjust
for any expected credit loss would likely skew the reported results for the
year.
The Group considers a financial asset in default when contractual payments are
between 30 to 180 days past due. However, in certain cases, the Group may also
consider a financial asset to be in default when internal or external
information indicates that the Group is unlikely to receive the outstanding
contractual amounts in full before taking into account any credit enhancements
held by the Group. A financial asset is written off when there is no
reasonable expectation of recovering the contractual cash flows.
Cash and cash equivalents
The Group considers any cash on short-term deposits and other short-term
investments to be cash equivalents.
The Group considers the credit ratings of banks in which it holds funds in
order to reduce its exposure to credit risk. The Group will only keep its
holdings of cash and cash equivalents within institutions which have a strong
credit rating.
Trade payables
These financial liabilities are all non-interest bearing and are initially
recognised at the fair value of the consideration payable.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is
based on the first-in-first-out principle and includes expenditure incurred in
acquiring the inventories and other costs in bringing them to their existing
location and condition.
Provisions
A provision is recognised when the Group has a present obligation, legal or
constructive, as a result of a past event and it is probable that an outflow
of resources embodying economic benefits will be required to settle the
obligation, and a reliable estimate can be made. Provisions are reviewed at
each reporting date and adjusted to reflect the current best estimate. If it
is no longer probable that an outflow of economic resources will be required
to settle the obligation, the provision is reversed. Where the effect of the
time value of money is material, provisions are discounted using a current
pre-tax rate that reflects, where appropriate, the risks specific to the
liability. When discounting is used, the increase in the provision due to the
passage of time is recognised as an interest expense.
Contingent liabilities
Contingent liabilities are possible obligations whose existence depends on the
outcome of uncertain future events or present obligations where the outflow of
resources is uncertain or cannot be measured reliably. Contingent liabilities
are not recognised in the Group's Financial Statements but are disclosed
unless they are remote.
p) Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of the Company after deducting all of its liabilities. Equity
instruments issued by the Company are recorded at the proceeds received net of
direct issue costs.
Ordinary shares are classified as equity.
Share capital account represents the
nominal value of the shares issued.
The share premium account represents premiums received on the initial issuing
of the share capital. Any transaction costs associated with the issuing of
shares are deducted from share premium, net of any related income tax
benefits.
Retained earnings include all current and prior period results as disclosed in
the Statement of Comprehensive Income.
q) Earnings per share
Basic earnings per share is calculated by dividing:
· The loss attributable to owners of the Company, excluding any costs
of servicing equity other than Ordinary Shares;
· By the weighted average number of Ordinary Shares outstanding during
the financial period.
3. Critical accounting estimates and judgements
Preparation of financial information in conformity with UK-adopted
International Accounting Standards requires management to make judgements,
estimates and assumptions that affect the application of accounting policies
and the reported amounts of assets, liabilities, income and expenses. The
estimates and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making judgements about
carrying values of assets and liabilities that are not readily apparent from
other sources.
The key estimates and underlying assumptions concerning the future and other
key sources of estimation uncertainty at the statement of financial position
date, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial period
are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision
affects only that period, or in the period of the revision and future periods
if the revision affects both current and future periods. In particular:
Key judgments
Acquisition of 3DBT
The Directors judged that under IFRS 3 Business Combinations, the Company was
deemed to be the accounting acquirer as described below in the Note 9 which
describes the basis of consolidation. The acquisition of 3DBT has therefore
been accounted for under the acquisition method.
Key estimates
Valuation of Intangible Assets
The determination of the fair value of assets and liabilities including
goodwill arising on the acquisition of 3DBT in May 2022, and development
expenditure, which is expected to generate future economic benefits, is based
to a considerable extent on management's judgement.
No fair value adjustments were deemed necessary as book values were considered
to approximate their fair values. Further analysis is included in Note 9 to
the Consolidated Financial Statements.
Allocation of the purchase price affects the results of the Group as finite
life intangible assets are amortised, whereas indefinite lived intangible
assets, including goodwill, are not amortised and could result in differing
amortisation charges based on the allocation to indefinite lived and finite
lived intangible assets.
Acquisition costs
The Company has considered how the costs of the acquisition of 3DBT, which
involved both issuing new shares and Admission to the Official List should be
accounted for. In accordance with IAS 32 Financial Instruments: Presentation,
the Company has allocated such costs as follows:
- Incremental costs that are directly attributable to issuing new
shares have been deducted from equity (net of any income tax benefit) - IAS
32.37;
- Costs that relate to the stock market listing, or are otherwise not
incremental and directly attributable to issuing new shares, have been
recorded as an expense in the statement of comprehensive income; and
- Costs that relate to both share issuance and listing have been
allocated between those functions based on the proportion of new shares issued
to the total number of (new and existing) shares listed.
Impairment reviews
IFRS requires management to undertake an annual test for impairment of
indefinite lived assets and, for finite lived assets, to test for impairment
if events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. No such circumstances have come to management's
attention since the acquisition of 3DBT.
The Group prepares and approves a detailed annual budget and longer-term
strategic plan for its operations, which are used in the impairment reviews.
Goodwill of £2,485,290 relating to the acquisition of 3DBT was allocated to
the 3DBT business and represents a Cash Generating Unit ("CGU") and reviewed
for impairment as of the reporting date. Management considers that that there
are no events or changes in circumstances which would indicate that the
carrying amount of goodwill may not be recoverable.
Research and development costs
No amounts of research and development costs were capitalised in the year
ended 30 September 2023 (30 September 2022: £nil).
Research expenditure is recognised in the "Statement of Comprehensive Income"
in the period in which it is incurred. Development expenditure is recognised
in the "Statement of Comprehensive Income" in the period in which it is
incurred unless it is probable that economic benefits will flow to the Group
from the asset being developed, the cost of the asset can be reliably measured
and technical feasibility can be demonstrated, in which case it is capitalised
as an intangible asset on the statement of financial position.
Initial capitalisation of costs is based on the Directors' judgement that
technological and economic feasibility of the asset is confirmed, usually when
a development project has reached a defined milestone according to an
established project management model. In determining the amounts to be
capitalised, the Directors have made assumptions regarding the expected future
cash generation of the project, discount rates to be applied and the expected
period of benefits. Capitalisation ceases when the asset being developed is
ready for use.
The Company has undertaken an assessment of the specific IAS 38 criteria and
has concluded that these requirements have not been met. In particular, in
relation to the CityMix product, the product is still at the testing phase
with customers and sales to date, which have been at a minimal level, relate
to in-house testing by potential customers. The current forecasts prepared by
the Company have not anticipated significant revenues as the testing is not
complete and there are no sales contracts agreed or in negotiation which would
support significant sales levels. Accordingly, the Company does not consider
that the capitalisation criteria for development expenditure have not been met
and all such expenditure has been expensed to profit and loss.
Cost of internally generated intangible assets comprise of directly
attributable costs necessary to create, produce, and prepare the asset to be
capable of operating in the manner intended by the company. More specifically,
time spent that is eligible for capitalisation includes time that is intrinsic
to the development of know-how. Development costs that do not meet the above
criteria are expensed as it is incurred.
Issue of restricted shares
As more fully described in Note 17 to the Consolidated financial statements,
the Company recognised a deemed cost of issuing restricted shares of £175,587
in the year ended 30 September 2022. The Company applied a fair value discount
to the issue price of restricted shares based on the lack of marketability
over the three-year restriction period. The Directors assessed the fair value
to be 3.25 pence per share, a discount of 4.12 pence per share (approximately
56%) to the market value of ordinary shares at the time of issue. Any change
to the assumptions used in applying the discount would have a direct effect
within profit and loss and thus the Group's result for the year.
Going concern
As more fully described above, the Directors have prepared forecasts and
projections for the Group for the purposes of assessing the Company's going
concern assumptions.
The financial position of the Group, its cash flows and liquidity position are
set out in these financial statements. As at 30 September 2023, the Group had
cash and cash equivalents of £2,319,061. As at the date of this report, the
Group had approximately £1,684,000 of cash and cash equivalents.
The Group has prepared monthly cash flow forecasts based on reasonable
estimates of key variables including operating costs and capital expenditure
through to March 2025 that supports the conclusion of the Directors that they
expect sufficient funding to be available to meet the Group's anticipated cash
flow requirements to this date.
These cashflow forecasts are subject to a number of risks and uncertainties,
in particular the ability of the Group to achieve additional funding to
support the planned levels of expenditure.
Management has performed detailed analyses of these forecasts to assess the
economic impact of various downside scenarios from a going concern
perspective. Based on the financial and operational performance analysis and
reviews done for the period up to January 2024 the Company is operating in
line with its budget in terms of costs.
The assessment as to whether the going concern basis is appropriate has also
taken into account all information available up to the date of authorisation
of these financial statements.
The Group will need additional funding to finance ongoing operations and any
acquisitions it might make. There can be no guarantee that sufficient funds
will be raised and this creates a material uncertainty that may cause
significant doubt about the going concern basis of the Group. The Board is
confident however that sufficient additional capital will be raised to ensure
adequate funds are available to the Group. The Board has therefore concluded
that the going concern basis remains appropriate in the preparation of these
Consolidated Financial Statements due to the anticipated availability of
sufficient financial resources in the 12 months from the date of the financial
statements.
4. Sales
2023 2022
£ £
Research revenues 11,416 -
Consumable sales 1,526 - -
12,942 -
5. Other operating income
2023 2022
£ £
Grant income 87,226 -
87,226 -
6. Expenses by nature
Cost of sales 2023 2022
£ £
Consumables 71,324 -
71,324 -
Administrative expenses 2023
2022
£ £
Legal and professional fees 313,551 130,866
Consulting fees 249,135 - 134,817
Deemed cost of issuing restricted shares (Note 17) - 175,587
Accounting and tax fees 45,283 60,346
Audit fees - fees payable to the Company's auditors for the audit of the 45,090 39,600
Company's annual accounts
Stock exchange fees 34,029 20,508
Share registry expenses 11,263 3,410
Directors' remuneration 217,232 79,167
Staff costs 328,697 - 131,319
Management service fees (Note 20) 60,000 22,500
Property costs 28,171 4,142
Purchase of consumables* - 29,186
Marketing 18,501 - 5,589
Bank charges 1,822 36
Depreciation 109,073 21,522
Travel and accommodation 88,205 49,958
Printing and stationery 4,001 7,363
Other costs 45,099 11,406
1,599,152 927,322
*: Included in cost of sales in the year ended 30 September 2023 (see above).
Finance expenses 2023 2022
£ £
Lease finance expense 10,141 2,110
10,141 2,110
7. Staff costs
Aggregate staff costs (including directors) 2023 2022
£ £
Wages and salaries 489,822 156,929
Social security and other payroll taxes 42,861 56,273
Pension costs 13,245 2,724
545,928 215,926
Average monthly number of employees 2023 2022
No. No.
Directors 4 4
Other 8 - 1
12 5
Remuneration of key management personnel
Key management personnel of the Group comprised the directors. The emoluments
and benefits of key management personal were as follows:
2023 2022
£ £
Wages and salaries 217,232 79,167
Deemed cost of issuing restricted shares - 140,471
Social security and other payroll taxes 10,671 44,450
Pension costs - -
227,903 264,008
The remuneration of the highest paid director (including the deemed cost of
issuing restricted shares) was £109,732 (2022: £114,461).
8. Taxation
Income taxes are provided for the tax effects of transactions reported in the
Group's Financial Statements and consist of taxes currently due, plus deferred
taxes related to differences between the basis of assets and liabilities for
financial and income tax reporting.
For the year ended 30 September 2023, the Group had a tax credit of £83,418
(30 September 2022: £607). The effective tax rate was 5.02 per cent. for the
year ended 30 September 2022 (2022: (0.07) per cent.). The effective tax rate
was primarily impacted by R&D tax credits, loss carryovers for which no
deferred tax asset was recognised, and other deferred tax and permanent
differences, such as disallowable expenditure.
The components of the provision for taxation on income included in the
Statement of Comprehensive Income are summarised below. Corporation tax is
calculated at 19% of the estimated taxable profit for the year.
The charge for the year is made up as follows:
2023 2022
£ £
Current tax
Research and development tax credit (85,400) -
Deferred tax
Deferred tax expense 5,993 607
Tax charge for the year (79,407) 607
The charge for the year can be reconciled to the loss in the Statement of
Comprehensive Income as follows:
Year ended 30 September 2023 £ %
Loss before tax on continuing operations (1,580,449)
Tax at the UK corporation tax rate of 19% (300,285) 19.0
Increase/(decrease) in tax resulting from:
Expenses not deductible 18,974 (1.20)
Research and development enhanced allowance (85,400) 5.40
Capital allowances less depreciation (320) 0.02
Deferred tax charge 5,993 (0.38)
Deferred tax asset not recognised in respect of losses 281,631 (17.82)
Tax credit for the year (79,407) 5.02
Year ended 30 September 2022 £ %
Loss before tax on continuing operations (929,432)
Tax at the UK corporation tax rate of 19% (176,592) 19.0
Increase/(decrease) in tax resulting from:
Expenses not deductible 59,002 (6.35)
Research and development enhanced allowance (16,239) 1.74
Capital allowances less depreciation 3,282 (0.35)
Deferred tax charge 607 (0.07)
Deferred tax asset not recognised in respect of losses 130,547 (14.04)
Tax charge for the year 607 (0.07)
The Group has accumulated tax losses of approximately £1,997,000 (2022:
£899,000). No deferred tax asset was recognised in respect of these
accumulated tax losses as there is insufficient evidence that the amount will
be recovered in future years.
The movements in tax receivable balances are summarised as follows:
2023 2022
£ £
Balance brought forward 33,950 -
Amounts received (33,950) -
Acquired on acquisition of 3DBT (Note 9) - 33,950
Balance carried forward - 33,950
The tax received comprised a claim for research and development tax credits
due to 3DBT.
Deferred tax:
The movements in deferred tax liabilities are summarised as follows:
2023 2022
£ £
Balance brought forward (13,963) -
Acquired on acquisition of 3DBT (Note 9) - (13,356)
Deferred tax expense (5,993) (607)
Balance carried forward (19,956) (13,963)
9. Earnings per share
The calculation of earnings per share is based on the
following loss and number of shares:
2023 2022
Loss for the year from continuing operations £(1,501,042) £(930,039)
Weighted average shares in issue 94,654,012 45,109,196
Earnings per share (in pence) (1.59p) (2.06p)
The Company presents basic and diluted loss per share information for its
ordinary shares. Basic loss per share is calculated by dividing the loss
attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares in issue during the reporting period. Diluted
earnings per share are determined by adjusting the profit or loss attributable
to ordinary shareholders and the weighted average number of ordinary shares
outstanding for the effects of all dilutive potential ordinary shares.
There is no difference between the basic and diluted earnings per share, as
the Company has no potential dilutive ordinary shares.
10. Acquisition of 3DBT
On 16 May 2022, the Company completed a conditional share sale and purchase
agreement (the "Acquisition Agreement") to acquire the entire issued share
capital of 3D Bio-Tissues Limited ("3DBT"), comprising 676,470 shares, in
consideration for the allotment and issue to the Sellers of an aggregate of
33,900,004 Consideration Shares (the "Acquisition"), an effective share
exchange ratio of 50:1, and readmission of the enlarged share capital to
trading on the Main Market of the London Stock Exchange.
In preparing the consolidated financial statements for the year ended 30
September 2022, the Company considered relevant accounting guidance and in
particular, whether the acquisition falls within IFRS3 Business Combinations.
In determining whether the acquisition falls within the scope of IFRS 3 and
who is the accounting acquiror, the Company has considered a number of
factors, including:
- The combination was effected primarily by exchanging equity
interests: the entity that issues the equity interests is normally considered
to be the accounting and legal acquiror which in this case was BSF;
- 3DBT was a small, early-stage pre-revenue entity not dissimilar to
the Company. The fair value of its net assets on acquisition were smaller than
that of the Company at only £13,140;
- The relative voting rights in the combined entity: the entity whose
owners as a group retain or receive the largest portion of the voting rights
in the combined entity, in this case the pre-acquisition shareholders in BSF
controlled 60.48% of the enlarged share capital;
- The composition of the governing body of the combined entity: the
entity whose owners have the ability to elect or appoint or remove a majority
of the members of the governing body of the combined entity, in this case,
Geoff Baker, Min Yang are also directors of BSF International Limited and BSF
Angel Limited (a 19.32% shareholder in the Company at the time);
- Senior management of the combined entity: the entity whose (former)
management dominates the combined management, post-acquisition; the Board of
BSF continued to comprise of Geoff Baker, Min Yang and Dennis Ow, with Che
Connor joining with effect from the acquisition date;
- Relative size: The consideration for the acquisition of 3DBT was
£2.5m. The market capitalisation of BSF on Admission was £6.32m, meaning BSF
comprised 60.48% of the combined entity's market capitalisation; and
- The Company initiated the combination.
Accordingly, the Company was deemed to be the acquiring party for accounting
purposes and the acquisition is considered to be a business combination within
the Scope of IFRS 3.
3DBT, a private company limited by shares, incorporated and registered in
England and Wales, is a
biotechnology spin out from Newcastle University founded by Professor Che
Connon and Dr Ricardo Gouveia. 3DBT's research and product development is
focused on producing biological tissue material, such as meat and skin, for
clinical and consumer use. Specialised technology enables 3DBT to apply
bio-focused manufacturing processes to generate complex structures such as
corneas for the human eye.
Under the terms of the Acquisition Agreement, the consideration was
£2,498,430 which was settled through the allotment and issue of 33,900,004
ordinary shares of £0.01 each in the capital of the Company (the
"Consideration Shares") at 7.37 pence per share. The following table
summarises the consideration paid for 3DBT, the fair value of assets acquired,
and liabilities assumed at the acquisition date.
Book value Fair value adjustments Fair value
Consideration £ £ £
Consideration shares 2,498,430
Total consideration 2,498,430
Recognised amounts of identifiable assets acquired and liabilities assumed
Cash and cash equivalents 12,370 - 12,370
Property, plant and equipment 70,294 - 70,294
Right-of-use assets 103,770 - 103,770
Intellectual property - - -
Trade and other receivables 29,326 - 29,326
Inventories 18,313 - 18,313
Corporation tax receivable 33,950 - 33,950
Trade and other payables (29,501) - (29,501)
Lease liabilities (112,026) - (112,026)
Loan from related party (100,000) - (100,000)
Deferred tax provision (13,356) - (13,356)
Total identifiable net assets 13,140 - 13,140
Deferred tax - - -
Goodwill 2,485,290 - 2,485,290
Total 2,498,430 - 2,498,430
The goodwill arising is attributable to the acquired
workforce and anticipated future profit from expansion opportunities of the
business. No fair value adjustments were deemed necessary as book values
were considered to approximate their fair values. 3DBT contributed no
revenue for the period between the date of acquisition and 30 September 2022
and £281,702 of loss before tax. If the acquisition of 3DBT had been
completed on 1 October 2021, Group revenues would have been approximately
unchanged (at £nil) and Group loss attributable to equity holders of the
parent would have been approximately £155,000 higher. Transaction costs of
£125,799 were expensed in the year ended 30 September 2022 relating to the
acquisition of 3DBT and re-admission to the Official List of the London Stock
Exchange. In addition, costs of £368,817 have been offset against share
premium.
11. Property, plant and equipment
Plant and equipment 2023 2022
£ £
Cost:
Balance brought forward 80,914 -
Additions 64,848 10,620
Acquired on acquisition of 3DBT (Note 10) - 70,294
Balance carried forward 145,762 80,914
-
Depreciation:
Balance brought forward 7,426 -
Charge for the year 33,304 7,426
Balance carried forward 40,730 7,426
-
Net book value:
As at 30 September 105,032 73,488
12. Right-of-use assets
Land and buildings 2023 2022
£ £
Cost:
Balance brought forward 237,656 -
Additions - 133,886
Acquired on acquisition of 3DBT (Note 10) - 103,770
Balance carried forward 237,656 237,656
-
Depreciation:
Balance brought forward 14,096 -
Charge for the year 75,759 14,096
Balance carried forward 89,855 14,096
Net book value:
As at 30 September 147,801 223,560
3DBT leases land and buildings for its offices and
laboratory under a five-year agreement. The lease has an initial rent-free
period with break-clauses annually after 12 months. The lease does not provide
for an extension to the five-year term and no extension to the lease has been
assumed.
13. Lease liabilities
Land and buildings 2023 2022
£ £
Cost:
Balance brought forward 231,879 -
Additions - 133,886
Acquired on acquisition of 3DBT (Note 10) - 112,026
Lease payments (74,946) (14,033)
Balance carried forward 156,933 231,879
The finance expense recognised in respect of these leases amounted to £10,141
in the year ended 30 September 2023 (2012: £2,110). The expense relating to
short-term or low value leases amounted to £7,063 in the year ended 30
September 2023 (year ended 30 September 2022: nil).
The total cash outflow for leases in the year ended 30 September 2023 was
£92,150 (2022: £40,283).
Future minimum lease payments associated with the land and building leases
were as follows:
Land and buildings 2023 2022
£ £
Not later than one year 85,087 85,087
Later than one year and not later than two years 81,014 85,087
Later than two years and not later than five years - 81,014
Total minimum lease payments 166,101 251,188
Less: Future finance charges (9,167) (19,309)
Present value of minimum lease payments 156,934 231,879
The maturity of lease liabilities is as follows:
Land and buildings 2023 2022
£ £
Non-current liabilities 78,051 156,933
Current liabilities 78,883 74,946
Right-of-use lease liabilities 156,934 231,879
14. Cash and cash equivalents
2023 2022
£ £
Cash at Bank 2,319,061 1,061,529
15. Inventories
2023 2022
£ £
Raw materials and laboratory consumables 45,811 21,855
45,811 21,855
The cost of inventories recognised in profit and loss for the year ended 30
September 2023 was £71,324 (2022: £29,186).
16. Receivables and prepayments
2023 2022
£ £
Trade receivables 11,917 -
Less: provision for impairment of trade receivables - -
Trade receivables - net 11,917 -
Prepayments 15,075 11,759
Amounts receivable on issue of restricted shares (Note 17) 77,985 - 77,985
Vat recoverable 52,603 43,018
Other receivables 32 -
157,612 132,762
All balances are reviewed specifically due to the limited number of
receivables and limited history of average rates of default losses to rely on.
No provision was deemed necessary.
17. Trade and other payables
2023 2022
£ £
Current:
Trade payables 90,594 58,498
Accruals 76,170 104,323
166,764 162,821
18. Share capital and share premium
Number of shares Share Share premium
capital
Issued Ordinary shares of £0.01 each £ £
At 30 September 30 September 2021 20,340,002 203,400 407,984
Issue of Ordinary shares on acquisition of 3DBT 33,900,004 339,000 2,159,430
Placing of Ordinary shares 23,744,912 237,449 1,512,551
Issue of shares as restricted share awards 7,798,491 77,985 -
Issue of shares in settlement of fees 203,528 2,035 12,965
Issue of warrants - - (12,537)
Costs of share issue - - (368,817)
As at 30 September 2022 85,986,937 859,869 3,711,576
Exercise of warrants 50,000 500 7,000
Placing of Ordinary shares 16,317,647 163,176 2,610,824
Subscription for Ordinary shares 882,353 8,824 141,176
Issue of shares 100,000 1,000 16,000
Costs of share issue - (171,440)
Issue of warrants - - (22,248)
As at 30 September 2023 103,336,937 1,033,369 6,292,888
Issue and fully paid 95,538,446 955,384 6,292,888
Issued and unpaid 7,798,491 77,985 -
As at 30 September 2023 103,336,937 1,033,369 6,292,888
The Company issued the following shares in the year ended 30 September 2023:
Exercise of warrants
On 9 February 2023, the Company issued 50,000 ordinary shares following the
exercise of warrants at a price of £0.15 per share.
Placing and subscription for shares
On 29 March 2023, the Company raised £2,924,000 by way of an oversubscribed
placing (the "Placing") of 16,317,648 new ordinary shares in the capital of
the Company ("Placing Shares") at a price of 17p per share (the "Placing
Price") and additionally, the subscription of 882,353 new ordinary shares
("Subscription Shares") by investors procured directly by the Company
("Subscribers") also at the Placing Price (the "Subscription").
The Company entered into deeds of variation with each of the subscribers in
respect of the Subscription Shares pursuant to which 264,739 of the
Subscription Shares ("Second Tranche Shares") were allotted and issued
conditional on (i) the Company convening a general meeting and obtaining
approval from shareholders to disapply statutory pre-emption rights
("Resolutions'') and (ii) the publication of a prospectus, as soon as
reasonably practicable following Admission. The Second Tranche Shares and the
Fundraising Warrants were allotted and issued on the passing of the
Resolutions and the publication of a prospectus on 26 September 2023.
Placees were granted one warrant for every two Placing Shares subscribed for
as part of the Placing, exercisable at 34 pence per Ordinary Share ("Exercise
Price"), representing 8,158,824 warrants, all exercisable at the Exercise
Price and expiring on the third anniversary of Admission.
In addition, the Subscribers have also been granted a warrant for every two
Subscription Shares purchased representing 441,176 warrants, exercisable at
the Exercise Price and which also expire on the third anniversary of Admission
(the Subscription and the Placing together referred to as the "Fundraising"
and the Placing Warrants and the Subscription Warrants together referred to as
the "Fundraising Warrants"). The Fundraising Warrants were granted conditional
on (i) any requirement for the Company to publish or procure the publication
of a prospectus as soon as reasonably practicable following Admission, and
(ii) the Company obtaining approval from shareholders to disapply statutory
pre-emption rights.
In total, 8,600,000 warrants were granted pursuant to the Placing, all
exercisable at the Exercise Price and expiring on the third anniversary of
Admission.
In addition, Shard Capital were also been granted broker warrants equal to 2
per cent of the total number of Placing Shares subscribed for pursuant to the
Placing, representing 326,352 warrants.
A total of 16,985,261 Ordinary shares of £0.01 each (being the aggregate of
the Placing Shares, the Subscription Shares less the Second Tranche Shares and
50,000 ordinary shares issued on 9 February 2023 following the exercise of
warrants) were admitted to the standard segment of the Official List and to
trading on the Main Market of the London Stock Exchange ("Admission") on 14
April 2023.
Issue of shares to advisers
The Company issued 100,000 Ordinary Shares to Roast PR at 17 pence per share
in satisfaction of certain fees due for services rendered.
The holders of the new Ordinary Shares issued during the year rank pari passu
in all respects with the holders of the existing Ordinary Shares.
The total number of ordinary shares in the Company in issue is 103,336,937.
A total of £171,440 of costs were incurred in relation to the issue of
Ordinary Shares and this amount has been deducted from the share premium
account.
Issue of warrants
As noted above, the Company issued an aggregate of 8,926,352 warrants during
the period. A total of 50,000 warrants (issued in 2022) were exercised during
the period. Accordingly, a total of 21,196,569 warrants remained outstanding
and exercisable at 30 September 2023 at a weighted average exercise price of
23.00 pence (2022: 15.00 pence), summarised as follows:
Number of warrants
At 30 September 2022 12,320,217
Exercise of warrants (50,000)
Issue of Fundraising Warrants 8,600,000
Issue of Broker Warrants 326,352
As at 30 September 2023 21,196,569
Using the Black-Scholes pricing model, the valuation of the Broker Warrants
has been calculated at 6.82p each, giving rise to an aggregate value of the
Warrants of £22,248.
The issue of the Broker Warrants resulted in an increase to the warrant
reserve of £22,248 and a decrease to share premium of £22,248.
The inputs in the model were as follows:
- Share price: 17.0 pence
- Exercise price: 34.0 pence
- Expected life of warrant: 3 years
- Risk-free rate: 3.47%
- Volatility: 85.0%
The volatility assumption was calculated with reference to the Company's
sector and market capitalisation.
The exercise price of outstanding warrants in issue ranges from 15.00 pence to
34.00 pence (2022: 15.00 pence). As at 30 September 2023, the weighted average
exercised price of the outstanding warrants in issue was 23.00 pence (2022:
15.00 pence).
The weighted average remaining contractual life of warrants outstanding at the
end of the year was 804 days (2022: 594 days).
Employee Share Option Plan ("ESOP")
On 16 May 2022, the Company resolved to adopt an Employee Share Option Plan
("ESOP"), which will allow for the grant of EMI options and non-approved share
options over shares in the Company to be granted to selected individuals. An
option will become exercisable at some future date and the participant will
then have the right to acquire shares at a price (the "option price") fixed
when the option was granted. The ESOP will be administered by the board (as
defined below).
The principal terms of the ESOP are as follows.
Eligibility
The board of directors of the Company (or its remuneration committee) (the
"Board") will select employees (including executive directors) to participate
in the ESOP. Options may only be granted within (1) a period of 42 days from
the day the ESOP is adopted (2) a period of 42 days immediately after the end
of a close period affecting the Company or (3) any other period as the Board
decides due to exceptional circumstances.
Option price
The price per share the participant has to pay to acquire the shares on
exercise will be no less than the market value of the shares as at the date
the option is granted (the "date of grant") or the nominal value of the share
(if higher). The market value of a share is the lesser of (a) the average
market value of the share determined by reference to the opening price from 1
January to the closing price of 31 December in the year prior to the date of
grant or (b) the mid-market value of the share as quoted on the London Stock
Exchange on the business day immediately prior to the date of grant or the
average mid-market price of the share as quoted on the London Stock Exchange
in the three business days prior to the date of grant or (c) such other value
as the Board determines to be the market value. Subject to the requirements of
the listing rules, the Board may grant options with an option price which is
lower than the market value of the shares as at the date of grant.
Exercise period
The option will first become exercisable on the third anniversary of the date
of grant. It can then be exercised at any time up to the day before the tenth
anniversary of the date of grant provided it does not lapse early under the
terms of the ESOP.
Performance conditions
The Board has power to impose performance conditions which will need to be
satisfied before an option can be exercised.
No options were issued in the year ended 30 September 2023 (year ended 30
September 2022: nil).
Restricted share plan
On 16 May 2022, the Company resolved in General Meeting to adopt the
Restricted Share Plan, which allow for the grant of shares to selected
employees subject to restrictions and forfeiture risks which will be lifted
after a certain period. It is intended that participants will be executive
directors and senior employees of the Company. The Restricted Share Plan will
be administered by the Board (as defined below).
The principal terms of the Restricted Share Plan are as follows are set out
below.
On Admission, the Company issued an aggregate of 7,798,491 Ordinary Shares at
a subscription price of £0.01 nominal value per share pursuant to the
Restricted Share Plan for a total consideration of £77,985.
Eligibility
The board of directors of the Company (or its remuneration committee) (the
"Board") may select employees (including executive directors) to participate
in the Restricted Share Plan. Itwas intended that participants would be
executive directors and senior employees of the Company. Awards may only be
granted within:
- a period of 42 days from the day the Restricted Share Plan is
adopted
- a period of 42 days immediately after the end of a close period
affecting the Company or
- any other period as the Board decides due to exceptional
circumstances.
Subscription price
The participant will pay nominal value per share for the shares subject to the
award.
Restrictions
For a period of three years from the date of the award (the "employment
period"), the participant cannot sell, transfer or otherwise deal with the
shares unless the Board agrees in writing. The Board may agree to a transfer
subject to such conditions as it sees fit.
Performance conditions
The Board has power to impose performance conditions which will need to be
satisfied during the employment period in order for the forfeiture risk to
lift.
Voting
During the employment period, unless the Board otherwise decides, the
participant cannot vote his shares.
Dividends
During the employment period, the participant will waive entitlement to
dividends unless the Board specifies otherwise when the award is granted.
19. Financial instruments
The Group's principal financial instruments comprise cash and cash
equivalents, receivables and other payables. The Group's accounting policies
and method adopted, including the criteria for recognition, the basis on which
income and expenses are recognised in respect of each class of financial
assets, financial liability and equity instrument are set out in note 2. The
Group does not use financial instruments for speculative purposes. The
principal financial instruments used by the Group, from which financial
instruments risk arises, are as follows:
Financial assets at amortised cost 2023 2022
£ £
Cash and cash equivalents 2,319,061 1,061,529
Trade and other receivables 11,949 -
Amounts receivable on restricted shares 77,985 77,985
2,408,995 1,139,514
Financial liabilities at amortised cost 2023 2022
£ £
Payables and accruals 224,737 203,630
224,737 203,630
a) Financial risk management objectives and policies
The Group's major financial instruments include bank balances and amounts
payable to suppliers. The risks associated with these financial instruments,
and the policies on how to mitigate these risks are set out below. The
Directors manage and monitor these exposures to ensure appropriate measures
are implemented on a timely and effective manner.
The Group has no foreign currency transactions or borrowings. Therefore, it is
not exposed to market risk in respect of foreign exchange risk or interest
risk.
Risk management is undertaken by the Board of Directors.
b) Liquidity risk
Liquidity risk arises from the Group's management of working capital. The
Group regularly reviews its major funding positions to ensure that it has
adequate financial resources in meeting its financial obligations.
The Directors have considered the liquidity risk as part of their going
concern assessment (see Note 2). Controls over expenditure are carefully
managed in order to maintain its cash reserves whilst it targets a suitable
transaction. With the exception of its lease liabilities disclosed in Note 12,
all of the Group's financial obligations fall due for payment in less than 12
months.
As at 30 September 2023, the Group's financial liabilities have contractual
maturities (including interest payments where applicable) as summarised below:
Financial liabilities maturity 2023 2022
£ £
Amounts due not later than one year:
Payables and accruals 224,737 203,630
Lease liabilities 85,087 85,087
309,824 288,717
Amounts due later than one year and not later than two years:
Lease liabilities 81,014 85,087
Amounts due later than two years and not later than three years:
Lease liabilities - 8 81,014
390,838 454,818
c) Credit risk
The Group's credit risk is wholly attributable to its cash balance. The credit
risk from its cash and cash equivalents is limited because the counter parties
are banks with high credit ratings and have not experienced any losses in such
accounts.
d) Interest risk
The Group's exposure to interest rate risk is the interest received on the
cash held, which is immaterial.
e) Capital risk management
The Group's objectives when managing capital is to safeguard the Group's
ability to continue as a going concern, in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure. The Group has no borrowings. In order to maintain or adjust
the capital structure, the Company may adjust the amount of dividends paid to
shareholders, return capital to shareholders or issue new shares. The Company
monitors capital on the basis of the total equity held being £4,858,980 as at
30 September 2023.
f) Market risk
The Group is exposed to market risk through its use of financial instruments
and specifically to interest rate risk which result from both its operating
and investing activities. The Group does not have any borrowings other than
its lease liabilities and accordingly market risks are not considered to be
significant.
g) Fair value of financial assets and liabilities
There are no material differences between the fair value of the Group's
financial assets and liabilities and their carrying values in the financial
information.
20. Subsequent events
On 26 October 2023, the Company incorporated a new 100% owned subsidiary,
Kerato Limited. The subsidiary is a new lab-grown cornea company, which
will form part of the Company's growing portfolio. It will seek to accelerate
the transition of 3DBT's advanced corneal products into clinical trials, as
well as address the growing industrial demand for these products.
On 8 December 2023, the Company entered into a Terms Sheet for an exclusive
Joint Venture with CellulaRevolution Ltd (CellRev), a leader in continuous
cell manufacturing , to help develop a new Foodtech company focused on
developing, and offering to the market, an end to end solution for
manufacturing cultivated meat at scale. The Joint Venture, Cultivated Meat
Technologies Limited (CMT), will combine CellRev's continuous bioprocessing
expertise, that can facilitate faster, cheaper and more sustainable production
of muscle cells, with 3DBT's leading knowhow in forming meat tissue and its
City-Mix™ animal-free cell culture supplement. City-Mix™ is already used
in the growth of skin, muscle and fat cells for use in cultivated meat. The
aim of CMT is to provide the market with the premier platform for
manufacturing cultivated meat in a scalable and cost-competitive manner.
21 Related party transactions
a) Geoff Baker and Min Yang are directors of both BSF Enterprise plc and
BSF International Limited. As described above in the Strategic Report, both
Geoff Baker and Min Yang who are directors of 3DBT and are directors of BSF
Angel Funding Limited which is a shareholder in the Company.
b) Key management are considered to be the directors and their
remuneration is disclosed in Note 6 above.
c) BSF International Limited, a shareholder in the Company, provided
accounting support and other administration services to the Group during the
year ended 30 September 2023 totalling £60,000 (2022: £22,500). These
services were made on terms equivalent to those that prevail in arm's length
transactions.
22 Ultimate controlling party
There is no ultimate controlling party of the Company.
23. Capital commitments
As at 30 September 2023, there were no capital commitments entered into by the
Group (30 September 2022: nil).
24. Contingent liabilities
As at 30 September 2023, there were no contingent liabilities (30 September
2022: nil).
Company Statement of Financial Position as at 30 September 2023
2023 2022
Note £ £
Assets
Non-Current assets
Investment in subsidiaries 5 3,949,430 2,498,430
Total non-current assets 3,949,430 2,498,430
Assets
Current assets
Cash and cash equivalents 9 2,121,927 1,018,481
Loan to subsidiary 6 - 350,000
Amounts due from subsidiary 7 - 36,000
Other receivables and prepayments 8 120,467 94,418
Total current assets 2,242,394 1,498,899
Total assets 6,191,824 3,997,329
Equity and liabilities
Capital and reserves
Share capital - issued and fully paid 11 955,384 781,884
Share capital - issued and unpaid 11 77,985 77,985
Share premium 11 6,292,888 3,711,576
Warrant reserve 11 34,785 12,537
Retained deficit (1,351,343) (718,709)
Total equity 6,009,699 3,865,273
Liabilities
Current liabilities
Trade and other payables 10 182,125 132,056
Total liabilities 182,125 132,056
Total equity and liabilities 6,191,824 3,997,329
The notes to the financial statements on pages 81 to 90 form an integral part
of these financial statements.
The loss attributable to members of the Company for the year ended 30
September 2023 is £632,634 (year ended 30 September 2022: loss of £647,728).
This report was approved by the Board of Directors and authorised for issue on
30 January 2024 and signed on its behalf by;
SIGNED
………………………………
Geoffrey Baker
Director
Registered number: 11554014
79
Company Statement of Changes in Equity
for the year ended 30 September 2023
Share capital issued and paid Share capital issued and unpaid Share premium Warrant reserve Retained deficit Total
£ £ £ £ £ £
As at 1 October 2021 203,400 407,984 - (246,568) 364,816
-
Comprehensive income for the period
Loss during the year - - (647,728) (647,728)
- -
Total comprehensive loss for the year - - (647,728) (647,728)
- -
Issue of shares 578,484 3,762,931 - - 4,419,400
77,985
Transfer on issue of restricted shares - - - 175,587 175,587
-
Issue of warrants - (12,537) - -
- 12,537
Share issue costs - (446,802) - - (446,802)
-
Transactions with shareholders 578,484 3,303,592 12,537 175,587 4,148,185
77,985
As at 30 September 2022 781,884 3,711,576 12,537 (718,709) 3,865,273
77,985
Comprehensive income for the year
Loss during the year - - - (632,634) (632,634)
-
Total comprehensive loss for the year - - (632,634) (632,634)
- -
Issue of shares 173,500 - 2,775,000 - - 2,948,500
Issue of warrants - (22,248) - -
- 22,248
Share issue costs - (171,440) - (171,440)
- -
Transactions with shareholders 173,500 2,581,312 - 2,777,060
- 22,248
As at 30 September 2023 955,384 6,292,888 34,785 (1,351,343) 6,009,699
77,985
The notes to the financial statements on pages 81 to 90 form an integral part
of these financial statements.
80
Notes to the Company Financial Statements for the year ended 30 September 2023
1. General Information
The Company is a public limited liability company, listed on the London Stock
Exchange, incorporated and registered in England and Wales on 5 September 2018
with registered company number 11554014.
The principal activity of the Company is to undertake the acquisition of
businesses in the biotechnology, innovative marketing and e-commerce sectors.
The address of the registered office is Aldgate Tower, 2 Leman Street, London
E1 8QN.
On 16 May 2022, the Company completed the acquisition of the entire issued
share capital of 3D Bio-Tissues Limited ("3DBT"), (together, the "Group"), a
biotechnology start-up and spin-out from the University of Newcastle. 3DBT has
developed a propriety platform technology termed "tissue templating" that
facilitates the production of a variety of animal tissue types for multiple
uses, commonly referred to as "tissue engineering".
The Company has a standard listing on the London Stock Exchange. The
Company's Ordinary Shares commenced trading on the OTCQB Venture Market in
the United States on 24 May 2023, under the symbol BSFAF.
2. Summary of significant accounting policies
(a) Basis of preparation
These financial statements have been prepared in accordance with applicable
United Kingdom accounting standards, including Financial Reporting Standard
101 - 'Reduced Disclosure Framework' applicable in the United Kingdom and
Republic of Ireland' ('FRS 101'), and with the Companies Act 2006.
The financial statements have been prepared using the historical cost basis.
No fair value adjustments have been applied in the preparation of the Company
Financial Information. The financial statements are presented in British
Pounds Sterling, the currency of the primary economic environment in which the
Company operates and its functional currency.
The financial statements are presented in £ unless otherwise stated.
The Company has taken advantage of Section 408 of the Companies Act 2006 and
has not included a Profit and Loss account in these separate financial
statements. The loss attributable to members of the Company for the year ended
30 September 2023 is £632,634 (year ended 30 September 2022: loss of
£647,728).
The Company has taken advantage of the following disclosure exemptions in
preparing these Financial Statements, as permitted by FRS 101:
- Disclosure exemption allowing no cash flow statement or related
notes to be presented;
- Disclosure exemption allowing the Company not to disclose related
party transactions when transactions are entered into wholly within the Group;
- Disclosure exemption around Key Management Personnel compensation
(though see note 6 of the Group accounts and the Directors' Remuneration
Report);
81
- Capital management disclosures (though see Note 19 of the
consolidated financial statements);
- Disclosure exemption on the effect of future accounting standards;
- Disclosure exemption on share-based payment information disclosures
(IFRS 2), as this information has been presented for the Group in Note 18 of
the consolidated financial statements; and
- Disclosure exemption on financial instrument disclosures (IFRS 7) as
this information has been presented for the Group in Note 19 of the
consolidated financial statements.
The Company produces true and fair consolidated accounts which include the
results of the Company.
Going concern
As at 30 September 2023, the Company had £2,121,927 (2022: £1,018,481) in
cash which is considered sufficient for its present needs. At the date of this
report cash balances were approximately £1,600,000.
The Company has prepared monthly cash flow forecasts based on reasonable
estimates of key variables including operating costs and capital expenditure
through to March 2025 that supports the conclusion of the Directors that they
expect sufficient funding to be available to meet the Company's anticipated
cash flow requirements to this date.
These cashflow forecasts are subject to a number of risks and uncertainties,
in particular the ability of the Company to achieve additional funding to
support the planned levels of expenditure.
Management has performed detailed analyses of these forecasts to assess the
economic impact of various downside scenarios from a going concern
perspective. Based on the financial and operational performance analysis and
reviews done for the period up to January 2024 the Company is operating in
line with its budget in terms of costs.
The assessment as to whether the going concern basis is appropriate has also
taken into account all information available up to the date of authorisation
of these financial statements.
The Company will need additional funding to finance ongoing operations and any
acquisitions it might make. Whilst there can be no guarantee that sufficient
funds will be raised, the Board is confident that sufficient additional
capital will be raised to ensure adequate funds are available to the Company.
The Board has therefore concluded that the going concern basis remains
appropriate in the preparation of these Financial Statements due to the
anticipated availability of sufficient financial resources in the 12 months
from the date of the financial statements.
The Directors are not aware of any other indicators which would give doubt to
the going concern status of the Company.
The Company will need additional funding to finance ongoing operations and any
acquisitions it might make. There can be no guarantee that sufficient funds
will be raised and this creates a material uncertainty that may cause
significant doubt about the going concern basis of the Company. The Board is
confident however that sufficient additional capital will be raised to ensure
adequate funds are available to the Company. The Board has therefore concluded
that the going concern basis remains appropriate in the preparation of these
Financial Statements due to the anticipated availability of sufficient
financial resources in the 12 months from the date of the financial
statements.
(b) Fixed asset investments
Fixed asset investments are carried at cost less, where appropriate, any
provision for impairment.
(c) Loans to subsidiaries
Loans to subsidiaries are measured at the present value of the future cash
payments discounted at a market rate of interest for a similar debt instrument
unless such amounts are repayable on demand. The present value of loans that
are repayable on demand is equal to the undiscounted cash amount payable
reflecting the Company's right to demand immediate repayment.
The Company's loan to 3DBT has been transferred to non-current investments as
the Company does not intend to recall the loan for the foreseeable future as
the funds are to be used for the long-term development of 3DBT's business.
Accordingly, the loan has been reclassified as a non-current investment.
(d) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, bank balances, deposits with
financial institutions and short-term, highly liquid investments that are
readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
(e) Trade and other receivables
Trade and other receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method,
less provision for impairment.
(f) Income taxes
Income tax expense represents the sum
of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from profit as reported in the statement of comprehensive
income because of items of income or expense that are taxable or deductible in
other years and 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 end of the reporting period.
Deferred tax is provided on timing differences which arise from the inclusion
of income and expenses in tax assessments in periods different from those in
which they are recognised in the financial statements. The following timing
differences are not provided for: differences between accumulated depreciation
and tax allowances for the cost of a fixed asset if and when all conditions
for retaining the tax allowances have been met; and differences relating to
investments in subsidiaries, to the extent that it is not probable that they
will reverse in the foreseeable future and the reporting entity is able to
control the reversal of the timing difference. Deferred tax is not
recognised on permanent differences arising because certain types of income or
expense are non-taxable or are disallowable for tax or because certain tax
charges or allowances are greater or smaller than the corresponding income or
expense.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the period in which the liability is settled or the asset
realised, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period. The measurement of
deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the Company expects, at the end of the
reporting period, to recover or settle the carrying amount of its assets and
liabilities.
Current or deferred tax for the year is recognised in profit or loss, except
when they relate to items that are recognised in other comprehensive income or
directly in equity, in which case, the current and deferred tax is also
recognised in other comprehensive income or directly in equity
respectively.
(g) Trade and other payables
Trade and other payables are initially recognised at fair value and thereafter
stated at amortised cost using the effective interest method unless the effect
of discounting would be immaterial, in which case they are stated at cost.
(h) Share capital
Proceeds from issuance of ordinary shares are classified as equity.
Incremental costs directly attributable to the issuance of new ordinary shares
or options are shown in equity as a deduction from the proceeds.
(i) Financial instruments
Financial instruments are recognised in the statements of financial position
when the Company has become a party to the contractual provisions of the
instruments.
Financial instruments are classified as liabilities or equity in accordance
with the substance of the contractual arrangement. Interest, dividends, gains
and losses relating to a financial instrument classified as a liability are
reported as an expense or income. Distributions to holders of financial
instruments classified as equity are charged directly to equity.
Financial instruments are offset when the Company has a legally enforceable
right to offset and intends to settle either on a net basis or to realise the
asset and settle the liability simultaneously.
A financial instrument is recognised initially at its fair value plus, in the
case of a financial instrument not at fair value through profit or loss,
transaction costs that are directly attributable to the acquisition or issue
of the financial instrument.
Financial instruments recognised in the statements of financial position are
disclosed in the individual policy statement associated with each item.
(i) Financial liabilities
Financial liabilities are recognised when, and only when, the Company becomes
a party to the contractual provisions of the financial instrument.
All financial liabilities are recognised initially at fair value plus directly
attributable transaction costs and subsequently measured at amortised cost
using the effective interest method other than those categorised as fair value
through profit or loss.
Fair value through profit or loss category comprises financial liabilities
that are either held for trading or are designated to eliminate or
significantly reduce a measurement or recognition inconsistency that would
otherwise arise. Derivatives are also classified as held for trading unless
they are designated as hedges. There were no financial liabilities classified
under this category.
A financial liability is derecognised when the obligation under the liability
is discharged, cancelled or expires. When an existing financial liability is
replaced by another from the same party on substantially different terms, or
the terms of an existing liability are substantially modified, such an
exchange or modification is treated as a derecognition of the original
liability and the recognition of a new liability, and the difference in the
respective carrying amounts is recognised in the profit or loss.
(ii) Equity instruments
Ordinary shares are classified as equity. Dividends on ordinary shares are
recognised as liabilities when approved for appropriation.
(iii) Other financial instruments
Other financial instruments not meeting the definition of Basic Financial
Instruments are recognised initially at fair value. Subsequent to initial
recognition other financial instruments are measured at fair value with
changes recognised in profit or loss except as follows:
· investments in equity instruments that are not publicly traded and
whose fair value cannot otherwise be measured reliably shall be measured at
cost less impairment; and
· hedging instruments in a designated hedging relationship shall be
recognised as set out below.
3. Critical accounting judgements and key sources of estimation
uncertainty
In the application of the Company's accounting policies, which are described
in Note 2, management is required to make judgements, estimates and
assumptions about the carrying values of assets and liabilities that are not
readily apparent from other sources. The estimates and underlying assumptions
are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period
of the revision and future periods if the revision affects both current and
future periods.
The key sources of judgment that have a significant effect on the amounts
recognised in the financial statements are described below.
Impairment of fixed asset investments and amounts due from subsidiaries
As described in Note 2 to the financial statements, fixed asset investments
are stated at the lower of cost less provision for impairment.
At each reporting date fixed asset investments and loans made to subsidiaries
are reviewed to determine whether there is any indication that those assets
have suffered an impairment loss. If there is an indication of possible
impairment, the recoverable amount of any affected asset is estimated and
compared with its carrying amount. If estimated recoverable amount is lower,
the carrying amount is reduced to its estimated recoverable amount, and an
impairment loss is recognised immediately in profit or loss. The Directors
have carried out an impairment test on the value of the loans due from
subsidiaries and have concluded that no impairment provision is necessary.
If an impairment loss subsequently reverses, the carrying amount of the asset
is increased to the revised estimate of its recoverable amount, but not in
excess of the amount that would have been determined had no impairment loss
been recognised for the asset in prior years. A reversal of an impairment
loss is recognised immediately in profit or loss.
Issue of restricted shares
As more fully described in Note 18 to the Consolidated financial statements,
the Company recognised a deemed cost of issuing restricted shares of £175,587
in the year ended 30 September 2022. The Company applied a fair value discount
to the issue price of restricted shares based on the lack of marketability
over the three-year restriction period. The Directors assessed the fair value
to be 3.25 pence per share, a discount of 4.12 pence per share (approximately
56%) to the market value of ordinary shares at the time of issue. Any change
to the assumptions used in applying the discount would have a direct effect
within profit and loss and thus the Group's result for the year.
Acquisition costs
The Company has considered how the costs of the acquisition of 3DBT, which
involved both issuing new shares and Admission to the Official List should be
accounted for. In accordance with IAS 32 Financial Instruments: Presentation,
the Company has allocated such costs as follows:
- Incremental costs that are directly attributable to issuing new
shares have been deducted from equity (net of any income tax benefit);
- Costs that relate to the stock market listing or are otherwise not
incremental and directly attributable to issuing new shares, have been
recorded as an expense in the statement of comprehensive income; and
- Costs that relate to both share issuance and listing have been
allocated between those functions based on the proportion of new shares issued
to the total number of (new and existing) shares listed.
4. Loss before tax
The loss before income tax is stated after charging:
2023 2022
£ £
Deemed cost of issuing restricted shares - 175,587
Fees payable to the Company's auditors
- Audit of the Company's annual accounts 45,090 39,600
5. Fixed asset investments
Investments in subsidiary undertakings
2023 2022
£ £
Balance brought forward 2,498,430 -
Additions 1,000 2,498,430
Reclassified from loan to subsidiary (Note 6) 1,450,000 -
Balance at end of year 3,949,430 2,498,430
The Company's investments comprise a 100% holdings in the issued ordinary
share capital of 3D-Bio Tissues Limited and BSF Enterprise (Hong Kong)
Limited.
No impairment provision has been made against the
investments in subsidiaries.
Note 10 to the consolidated financial statements contains
further information on the Company's holdings in subsidiaries including their
activities and address of registered office.
6. Loan to subsidiary
2023 2022
£ £
Balance brought forward at beginning of year 350,000 -
Amounts advanced 1,100,000 350,000
Amount reclassified to non-current investments (1,450,000) -
Balance at end of year - 350,000
The Company's loan to 3DBT has been transferred to non-current investments as
the Company does not intend to recall the loan for the foreseeable future as
the funds are to be used for the long-term development of 3DBT's business.
Accordingly, the loan has been reclassified as a non-current investment in
2023.
7. Amounts due from subsidiary
2023 2022
£ £
Balance at end of year - 36,000
The amounts due from 3DBT are in respect of management service charges and are
unsecured and repayable on demand.
8. Other receivables and prepayments
2023 2022
£ £
Prepayments 14,168 2,625
Amounts receivable on issue of restricted shares 77,985 - 77,985
Vat recoverable 28,314 13,808
120,467 94,418
9. Cash and cash equivalents
2023 2022
£ £
Bank balances 2,121,927 1,018,481
Cash and cash equivalents 2,121,927 1,018,481
10. Trade and other payables
2023 2022
£ £
Trade payables 70,117 19,505
Accruals 67,558 62,101
VAT - 6,000
Other taxes and social security 44,450 44,450
182,125 132,056
The directors consider that the carrying amounts of amounts falling due within
one year approximate to their fair values.
11. Share capital
Details of the Company's allotted, called-up and fully paid share capital are
set out in Note 18 to the Consolidated Financial Statements.
12. Reserves
The share premium account represents the excess of the fair value of the
consideration received over the nominal value of shares issued and is not
distributable by way of dividends.
The warrant reserve arises from the requirement to value warrants in existence
at the year end at fair value (see Note 17 to the Consolidated Financial
Statements).
13. Share based payments
Details of the Company's share option plan and warrants are contained in Note
18 to the Consolidated Financial Statements.
14. Employees
The average monthly number of employees including directors
was as follows:
2023 2022
No. No.
Management 4 3
4 3
15. Related party transactions
a) The only key management personnel of the Company are the Directors.
Details of their remuneration are contained in Note 7 to the Consolidated
Financial Statements and the Remuneration Report.
b) Details of amounts due between the Company and its subsidiary is shown
in Note 6 above. The Company also received £120,000 from its subsidiary in
respect of management charges (year ended 30 September 2022: £30,000).
c) Geoff Baker and Min Yang are directors of both BSF Enterprise plc and
BSF International Limited. As described above in the Strategic Report, both
Geoff Baker and Min Yang who are directors of 3DBT and are directors of BSF
Angel Funding Limited which is a shareholder in 3DBT.
d) BSF International Limited, a shareholder in the Company, provided
services to the Group during the year ended 30 September 2022 totalling
£60,000 (2022: £22,500). These services were made on terms equivalent to
those that prevail in arm's length transactions.
e) The Company subscribed for 100% of the issued share capital of BSF
Enterprise (Hong Kong) Limited for HK$10,000 (£1,000).
16. Subsequent events
On 26 October 2023, the Company incorporated a new 100% owned subsidiary,
Kerato Limited. The subsidiary is a new lab-grown cornea company, which will
form part of the Company's growing portfolio. It will seek to accelerate the
transition of 3DBT's advanced corneal products into clinical trials, as well
as address the growing industrial demand for these products.
On 8 December 2023, the Company entered into a Terms Sheet for an exclusive
Joint Venture with CellulaRevolution Ltd (CellRev), a leader in continuous
cell manufacturing , to help develop a new Foodtech company focused on
developing, and offering to the market, an end to end solution for
manufacturing cultivated meat at scale. The Joint Venture, Cultivated Meat
Technologies Limited (CMT), will combine CellRev's continuous bioprocessing
expertise, that can facilitate faster, cheaper and more sustainable production
of muscle cells, with 3DBT's leading knowhow in forming meat tissue and its
City-Mix™ animal-free cell culture supplement. City-Mix™ is already used
in the growth of skin, muscle and fat cells for use in cultivated meat. The
aim of CMT is to provide the market with the premier platform for
manufacturing cultivated meat in a scalable and cost-competitive manner.
17. Ultimate controlling party
There is no ultimate controlling party of the Company.
18. Capital commitments
As at 30 September 2023, there were no capital commitments entered into by the
Company (30 September 2022: nil).
19. Contingent liabilities
As at 30 September 2023, there were no contingent liabilities (30 September
2022: nil).
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