REG - Genflow Biosciences - Full Text of Accounts
07/05/2024 13:15
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240507:nRSG4626Na&default-theme=true
RNS Number : 4626N Genflow Biosciences PLC 07 May 2024
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO
CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION
(EU) NO. 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW PURSUANT TO THE EUROPEAN
UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
7 May 2024
Genflow Biosciences Plc
Full Text of Final Accounts to 31 December 2023
Genflow Biosciences Plc (LSE:GENF) (OTCQB:GENFF) ("Genflow" or "the Company"),
an emerging leader in the field of longevity research, focused on developing
therapeutic solutions for the prevention of age-related diseases, sets out
below the full, unedited text of its final results for the year ended 31
December 2023, announced earlier today, to assist shareholders and other
interested parties.
Contacts
Genflow Biosciences Harbor Access
Dr Eric Leire, CEO Jonathan Paterson, Investor Relations
+32-477-495-881 +1 475 477 9401
Jonathan.Paterson@Harbor-access.com
Joint Corporate Brokers
Clear Capital Markets Capital Plus Partners Ltd
Bob Roberts, +44 203 869 6080 Dominic Berger, +44 203 821 6167
Keith Swann, +44 0203 821 6169
Jon Critchley, +44 0203 821 6168
Chairperson's Report
Dear Shareholders,
Introduction
I am pleased to present my statement as the Chairperson of Genflow Biosciences
Plc (GENF) (the "Company").
The Company is a preclinical biotechnology company focused on the development
of innovative biological interventions (namely gene therapies) which are aimed
at tackling the effects of aging, potentially slowing or halting the aging
process and so reducing the incidence of age-related diseases and thereby
increasing life span.
Over the past year, the Company has achieved numerous important milestones and
I would like to sincerely thank our team for its exceptional commitment to
execution and delivery.
As mentioned in greater detail in the Strategic report on page 5, the
Company's subsidiary Genflow Biosciences SRL (together the "Group") is making
great progress with its two principal longevity programs: NASH; now called
MASH (Metabolic Dysfunction-Associated Steatohepatitis), as well as its work
on Werner Syndrome. Most notably in relation to our MASH program, the Company
had its first interaction with the Federal Agency for Medicines and Health
Products (FAHMP) which was successful. FAHMP concurred with Genflow's proposal
to commence Phase I/II clinical trials in MASH patients rather than with
healthy volunteers once we reach the clinical trial phase. We hope that this
will provide a first signal of efficacy in humans more speedily and,
furthermore, we are hopeful that these trials will showcase the ability of
longevity gene-therapy in assisting patients with life-limiting illnesses.
In the same month, we were also able to report that that the Company's shares
had successfully commenced trading on the OTCQB Venture Market in the United
States. We continue to believe this move expands our reach to a larger
investor base and has the potential to enhance liquidity for our shares,
making it easier for US investors to trade Company shares. Our acceptance onto
the OTCQB also aligned (and continues to do so) with our strategic emphasis on
the US due to its significant advancements and understanding in longevity and
our ongoing collaborations with US-based institutions.
Another notable achievement this year, was the expansion our intellectual
property portfolio through a provisional patent application focusing on the
ability to edit the SIRT6 gene, shown to play a key role in longevity and
age-related diseases. If granted the patent will represent a significant
milestone in the field of gene editing, with potential implications for
longevity and other forms of gene therapy.
2024
In January 2024, we announced two exciting collaborations with other biotech
companies: a sarcopenia project with Revatis SA and an exosome-mRNA project
with EXO Biologics. Both projects are backed by substantial non-diluting and
non-reimbursable research grants by the Government of Wallonia in Belgium
totalling a combined €2.89m. The first payment of €777,000 is due to be
received imminently. The opportunity to collaborate with Revatis SA and EXO
Biologics; plus the granting of funding, will allow us to strengthen our cash
runway, enabling us to continue executing on our research and conduct
additional development programs such as our sarcopenia program and therefore
broaden our research pipeline and expand the size of the Company's therapeutic
markets.
To strengthen the Company's financial position and increase our institutional
investor base, the Company completed a placing and subscription to raise
£715,000 (before expenses) recently. We were privileged to have the
participation of Premier Miton, a well-known UK institution, in this
fundraise.
In addition to this, Genflow Biosciences SRL also received €350,000 in April
2024 from the Wallonia Region representing the second half of the first
tranche of the grant.
We have ambitious goals for our MASH and Werner research programs in 2024,
including key Investigational New Drug ("IND")-enabling development activities
that will help define the pharmacological and toxicological properties of our
lead drug candidate, GF-1002, and its potential benefits for MASH patients.
Additionally, we plan to start preliminary discussions with the European
Medicines Agency (EMA) on Mechanism of Action (MoA) data for the Orphan Drug
Application (ODA) for our second compound GF-3001, targeting Werner Syndrome.
We also plan to initiate discussion with the FDA regarding our MASH program.
Governance and the Board
Genflow was pleased to further strengthen its exceptional Scientific Advisory
Board (SAB) with the appointment of Prof. Sven Francque (University of
Antwerp) and Prof. Dr Mary E. Rinella (University of Chicago) in May 2023.
Prof. Dr. Francque is currently Chairman of the Department of Gastroenterology
and Hepatology of the University Hospital Antwerp and Full Professor of
Medicine at the Faculty of Medicine and Health Sciences of the University of
Antwerp in Belgium. He has a longstanding interest and expertise in
non-alcoholic fatty liver disease and has conducted research focusing on
steatosis.
Prof. Dr. Mary E. Rinella, is the Director of the Metabolic and Fatty Liver
Disease Department at the University of Chicago. She has investigated a broad
range of topics within fatty liver disease, including the use of non-invasive
measures to minimize the use of liver biopsy and the study of new therapies to
treat fatty liver disease.
In light of the ongoing progress being achieved by the Company, including its
OTCQB listing and evolving focus on the US, leadership of the board and SAB
were transitioned to individuals who are based in the US and have strong ties
with the US markets and academic research institutions: I was appointed
Chairperson of the Board and Vera Gorbunova PhD became Chairperson of the SAB.
Dr. Gorbunova's contributions to the field of longevity and her invaluable
insights in this sector will be instrumental in guiding the Company's
scientific research.
These appointments to the SAB and leadership transitions are aimed at
strengthening Genflow's links with the U.S. market, its investors and its
research institutions, while continuing our commitment to the UK market, its
investors and UK and European research institutions.
Yassine Bendiabdallah, former Chair, remains a key member of our Board and
continues to act as a Non-Executive Director, and Dr Eric Verdin remains a key
member of the SAB.
Forward look
I would like to extend my gratitude to the members of the Genflow board and
wider team for their indispensable contributions to the Company. Their
diligent efforts have played a pivotal role in realising the achievements
outlined in my report. The Company eagerly anticipates collaborating on
forthcoming projects with partners such as Revatis SA and EXO Biologics as we
continue to maintain a robust financial position, ensuring our readiness to
pursue our objectives for the fiscal year 2024. I look forward to providing
further updates as developments materialise.
Tamara Joseph
Non-Executive Chairperson
3 May 2024
Strategic Report
Introduction
We are a pre-clinical biotechnology company committed to using gene therapy
technologies to develop drugs that potentially halt, slow or reverse the aging
process. Our products will aim at improving the health span (living
healthier for longer) and potentially, life expectancy. Our objective is to
develop gene therapies that address the growing medical need to prevent and
delay age-related diseases by using adeno-associated viruses ("AAV") vectors
to deliver copies of a SIRT6 gene variant found in Centenarians.
Research and Development Update
The Company's focus is the creation of innovative interventions in gene
therapies that provide hope for halting, slowing or even reversing the aging
process. The Group seeks to streamline and accelerate pre-clinical,
regulatory, clinical, and production pathways.
Genflow continues with the research, development and safe implementation of
its two longevity programs:
1. Metabolic Dysfunction-Associated Steatohepatitis (formerly known as
Non-Alcoholic Steatohepatitis ("NASH")) ("MASH") where the Company is seeking
to reverse aging fibrotic livers to normal functionality. MASH affects an
estimated 35 million people globally and is one of the leading causes of
chronic liver disease and liver transplants; and
2. Werner Syndrome where the Company is seeking to improve the life of
patients with this accelerated aging disease. The Company is seeking to
ensure swift first-in-human trials.
We are pleased to report that our MASH program is advancing, underscoring our
firm commitment to combatting this global health issue. In collaboration with
Dr. Manlio Vinciguerra, (a Genflow SAB member based at the University of
Liverpool), we are gaining a significantly deeper understanding of the
biochemical changes that occur in the treatment of MASH using the centenarian
SIRT6. This research has led to us clearly identifying the workings of our
lead drug candidate, GF-1002 and its potential benefits for MASH patients.
Our studies demonstrate the absorption and distribution of the Company's drug
candidates in the human body. The data from these studies, which is owned by
the Company, formed a significant part of the presentation to the regulatory
authorities in June 2023 which resulted in a favorable response from the
Federal Agency for Medicines and Health Products (FAHMP).
We were most pleased to receive written comments from the FAHMP of Belgium
which recommended that the Company commence clinical trials of its drug,
GF-1002, with patients suffering from MASH, rather than in healthy
volunteers. This follows promising results from the Company's research in
in-vitro human cells and in-vivo rodent studies. MASH clinical trials are
expected to begin in Q2 2025 following dialogue and subsequent agreement with
the European Medicine Agency.
As a result of our findings thus far, we have accumulated important data and
filed a new patent application for editing the SIRT6 gene, linked to longevity
and age-related diseases. If successful, this research could have significant
positive implications for the field of gene therapy and beyond. Based on this
work, further IP opportunities are also being continually explored.
Additionally, part of these results have been published in a peer controlled
journal (reference: Human centenarian-associated SIRT6 mutants modulate
hepatocyte metabolism and collagen deposition in multilineage hepatic 3D
spheroids - PubMed (nih.gov)) with the Company's CEO and members of its SAB
listed as co-authors.
Simultaneously, we are making progress on gene therapy targeting Werner
Syndrome, an accelerated aging disease. Here, our vision is clear: to enhance
the quality of life for affected patients and expedite the path towards swift
and successful first-in-human trials under orphan drug designation. Our lead
compound GF-3001, is a topical delivery of SIRT6 to the fibroblasts in the
skin. The Company has already conducted a preliminary feasibility study for a
clinical site in Northern Sardinia, Italy.
Note that all costs in relation to the Group's research and development
activity have been recognized as an expense in the Consolidated Statement of
Comprehensive Income due to the Group being in the research phase of its
journey.
Strategic Development - Collaborative Research Agreements
Since incorporation, the Company has entered into several scientific
collaborations with top-tier longevity research institutions and, in
early-2024, was pleased to announce it had entered into new collaborative
research agreements with two prestigious organisations in the biotechnology
space.
The two new research programs are a part of a broader innovation partnership
that the Walloon Government, dedicated to Advanced Therapy Medicinal Products
(ATMPs).
Sarcopenia Research Program with Revatis SA
Genflow, together with Revatis SA, launched a 3-year sarcopenia research
program, generously funded by a grant totalling €1.34m. Sarcopenia, the
progressive loss of muscle mass and function associated with aging, poses a
significant health risk and affects the quality of life for millions of
elderly people worldwide.
mRNA Delivery Research with EXO Biologics
Genflow and EXO Biologics initiated a 3-year scientific program, supported by
a grant of €1.55m. The project focuses on the development of a novel mRNA
delivery system using exosomes to encapsulate and transport Genflow's
proprietary centenarian SIRT6 gene. The Company plan to use these loaded
exosomes for topical delivery to patients with Werner Syndrome.
Outlook for 2024
Our key objectives for 2024 are:
· Continuing to identify suitable grant funding to support the
Group's project pipeline.
· Undertake key Investigational New Drug (IND)-enabling development
activities that will help define the pharmacological and toxicological
properties of our lead drug candidate, GF-1002, and its potential benefits for
MASH patients.
· Select site and QMS framework for clinical readiness, expected by
the end of 2025 for the MASH program.
· Commence preliminary discussions with the European Medicines
Agency (EMA) on Mechanism of Action (MoA) data for Orphan Drug Application
(ODA) for our second compound GF-3001, targeting Werner Syndrome.
· Select Contract Development and Manufacturing Organization (CDMO) for
advancing the GMP manufacturing of the MASH clinical lot of lead drug
candidate, GF-1002.
· Develop and implement project management, budgeting and
governance for collaborative partners, in line with clinical and pre-clinal
activities that will enable IND applications.
· Move key patent applications under the Patent Cooperation Treaty (PCT)
to the national phase, while further expanding our development pipeline with
new products and new indications.
Intellectual Property
Genflow BE holds an exclusive worldwide patent license along with the
University of Rochester concerning the GF-1002 compound and its administration
to treat humans and pets. The GF-1002 patent application principally relates
to the cDNA of the variant of the human sirtuin 6 gene found in Centenarians.
This represents the broadest possible scope for a "gene patent application"
since it encompasses any use of the variant, including specifically, the
Group's product GF-1002, but also any product that contains the variant for
use in any application. Genflow's collaborative partners include: the
University of Rochester, The Trustees of Columbia University in the City of
New York, and Albert Einstein College of Medicine, New York.
Genflow BE also holds a provisional patent application focussing on the
ability to edit the SIRT6 gene. This gene has been shown to play a role in
longevity and age-related diseases. If granted, the patent will represent a
significant breakthrough in the field of gene editing, with potential
implications for longevity and other forms of gene therapy.
Late in 2022, the Company filed a new patent application with the United
States Patent and Trademark Office that relates to methods of administration
of variants of SIRT6, and the gene variant's therapeutic uses for the
treatment of two disorders involving the liver: Non-alcoholic fatty liver
disease NAFLD, and MASH. The application was filed via Genflow Biosciences SRL
("Genflow BE").
Investment To Date
The Company has an agreement with the Wallonia region in Southern Belgium to
receive a non-dilutive research grant award of up to €3.375m. To date, the
Company has accessed funding under tranche one of the grant which totals
€767,000, of which partial payment was received in the previous reporting
period, and the balance received in April 2024. The Company expects to apply
for the second tranche of funding in 2024.
Additionally, the Company's research with Revatis SA and EXO Biologics is
backed by substantial non-diluting and non-reimbursable research grants by the
Government of Wallonia in Belgium, of which a combined total of €1.55m is
receivable. Funding for the two research programs, as part of the Wallonia
Recovery Plan by the Walloon Government in Belgium, will be disbursed annually
to the Company, contingent upon Genflow and its collaborators achieving
specific, activity-based milestones.
The Scientific Advisory Board (SAB)
Genflow has established what the Directors believe is a strong scientific
advisory board ("SAB") experienced in the field of longevity. The role of the
SAB is to provide the Company with specific guidance on its research &
development programmes. Furthermore, the Company can benefit from constant
external perspectives which the members of the SAB can bring to steer its
research & development strategies. Details of the SAB members are as
follows:
Dr Vera Gorbunova
Dr Vera Gorbunova, PhD is the Co-Director of the Rochester Ageing Research
Center, University of Rochester New York. Dr Gorbunova is an endowed Professor
of Biology at the University and a Co-Director of the Rochester Ageing
Research Center. Her research is focused on understanding the mechanisms of
longevity and genome stability and on the studies of exceptionally long-lived
mammals. Her work has received awards from the Ellison Medical Foundation, the
Glenn Foundation, American Federation for Ageing Research, and from the
National Institutes of Health. Her work was awarded the Cozzarelli Prize from
PNAS, the prize for research on ageing from ADPS/Alianz, (France), the Prince
Hitachi Prize in Comparative Oncology, (Japan), and the Davey prize from
Wilmot Cancer Center.
Dr Eric Verdin
Dr Eric Verdin, M.D. has been Chief Executive Officer and President of Buck
Institute For Age Research since 18 November 2016. Dr Verdin served as an
Associate Director and Senior Investigator at the Gladstone Institute of
Virology and Immunology and a Professor of Medicine at the University of
California. Dr Verdin's laboratory work focuses on the role of protein
acetylation in biological processes, particularly in modulating the immune
response. Specifically, his laboratory studies histone deacetylase enzymes
(HDACs) that remove acetyl groups from histones and non-histone proteins.
Dr Matthew Hirschey
Dr Matthew Hirschey, PhD is an Assistant Professor in the Departments of
Medicine (Division of Endocrinology, Metabolism and Nutrition) and
Pharmacology & Cancer Biology at Duke University Medical Center and a
faculty member of the Sarah W. Stedman Nutrition and Metabolism Center and the
newly formed Duke Molecular Physiology Institute. His research focuses on
mitochondrial metabolism, with a particular interest in how cells use
metabolites and chemical modifications to sense metabolism. He, and his lab,
study the regulation of this process by a family of enzymes called sirtuins,
and how sirtuins maintain energy homeostasis. His work has appeared in several
leading journals, including Nature, Science, Cell Metabolism and Molecular
Cell. He has received several awards including an Innovator Award from the
American Heart Association, a New Scholar in Ageing Award from the Ellison
Medical Foundation, and the Helmholtz Young Investigator in Diabetes (HeIDi)
Award. His work is supported by grants from the American Heart Association,
the Mallinckrodt Foundation, Friedreich's Ataxia Research Alliance, the
Ellison Medical Foundation, and the National Institutes of Health.
Dr Manlio Vinciguerra
Dr Manlio Vinciguerra, PhD is a Principal Investigator at the International
Clinical Research Center (ICRC), Brno, Czech Republic. Previously he held a
position of Senior Lecturer at the Institute for Liver and Digestive Health at
University College London (UCL), London, United Kingdom. He received his PhD
in Internal Medicine (2004) and research training at the University of Geneva,
Switzerland, and at the European Molecular Biology Laboratory (EMBL), in Italy
and in Germany (2005-2011). He obtained a degree in Biomolecular Sciences from
the University of Catania, Italy, in 1999. Dr. Vinciguerra unravelled
important cellular signalling and epigenetics mechanisms involved in metabolic
and infectious processes, stress and ageing in the heart and in the liver,
such as PI3K/AKT/mTOR pathway and sirtuins, using a systems biology approach
in cells and rodent models. He is a member of Who's Who in Gerontology.
Professor Dr. Sven Francque
Professor Francque is a renowned expert in the field of NAFLD and its advanced
form, nonalcoholic steatohepatitis now known as Metabolism-Associated
Steatohepatitis (MASH). He has a long-standing interest and expertise in NAFLD
and MASH, with research focusing on the vascular changes in steatosis and
their contribution to disease progression. Genflow stands to gain
significant value from Professor Francque's extensive knowledge of MASH,
particularly in identifying new targets and potential therapies for the
disease. Moreover, Professor Francque's expertise in clinical research and
clinical trial design will be invaluable in the development of clinical trial
programs for the Company's novel therapeutics. His membership of the SAB will
play a vital role in shaping and broadening the Company's strategy and
direction, and his vast experience will be integral to achieving the Company's
goal of improving the lives of patients with MASH.
Dr. Mary E. Rinella, MD
Mary Rinella, MD, is a board-certified transplant hepatolgist at University of
Chicago Medicine. Dr. Rinella is an expert in fatty liver disease (steatotic
liver disease). She has become an expert in the various types of fatty liver
diseases during her 20-year tenure, while also learning extensively about
autoimmune and biliary liver diseases. Dr. Rinella has significant experience
treating these illnesses, utilizing remedies such as nutritional intervention,
the use of medications, endoscopy and clinical trials to deliver the most
advanced treatment options. Dr. Rinella earned her medical degree at the
University of Illinois School of Medicine before completing her residency and
fellowship at the University of Chicago and Northwestern University,
respectively. Her studies on the matters have led to over 150 articles
published in prestigious journals such as Nature Reviews Gastroenterology
& Hepatology, Gastroenterology, Hepatology, Journal of the American
Medical Association (JAMA), The Lancet and more.
In order to align the objectives of the SAB members with that of the Group, a
portion of the SAB member's remuneration is in the form of Ordinary Shares in
the Company.
Organisational Progress
Since incorporation, the Company has made significant progress in its
commitment to best practice in Corporate Governance.
The Company is proud to uphold a good standard of corporate governance by
putting in place:
· An effective board of directors that is collectively responsible
for ensuring success in the long term, led by a chairperson who is committed
to continuous improvement
· A board that features a balance of competencies, experience, diversity,
company knowledge and independence
· Directors that are able to dedicate sufficient time to their
responsibilities, receive a great induction and have the opportunity to
regularly update their skillset
· Regular evaluation of the board performance as well as that of
the individual directors and committees.
The Company's Corporate Governance policy has been further detailed in the
Corporate Governance Report on page 17.
Being a great place to work
Underlying our strategy is our dedication to ensuring we are able to attract
and retain great talent by being, and remaining a great place to work. As our
business grows, we believe our success will require ideas that can only come
from people encouraged to be themselves at work, enabled to contribute to
their full potential, and empowered to challenge conventional thinking. For us
that means being an inclusive and diverse workplace, attracting and retaining
the best people. Genflow's current staff based is made up of Directors and
contractors, however we plan to take on more employees as we grow, and we are
committed to implementing the aforementioned strategy from the start of our
journey.
Diversity Statement
The Company's culture allows and encourages every person to make a unique and
positive contribution to the organisation irrespective of their differences.
The Company encourages contributions from all groups and actively seeks to
maintain a diverse board of Directors, which will in turn be reflected in its
workforce when the Company begins to recruit.
Roles by gender
2023 2022
Female Male Female Male
Non-executive Director 1 3 2 4
Executive Director - 1 - 1
In 2023, 20% of the board was made up of women. As the Company grows and
develops it is eager to increase its gender diversity by appointing more women
to its Board, adding new perspectives and contributions. However, at present,
the Board and Company remains fairly small and only meets one out of two
gender diversity targets set by the Listing Rules.
Roles by ethnicity
One fifth of the Company's board is formed of individuals from ethic minority
backgrounds, as defined by the Listing Rules.
Financial Overview
As at 31 December 2023, the Group had cash reserves of £683,974 (2022:
£2,356,225) and is debt free.
Group administration expenses for the 2023 year totaled £1,798,559 (2022:
£1,822,232) which consisted of professional, legal and consulting fees of
£215,971 (2022: £381,534) and PR and marketing costs of £106,819 (2022:
£165,889). Expenditure on research and development was £960,314 for the year
(2022: £724,465), all of which has been recognised as an expense due to the
Group being in the research phase.
During the year ended 31 December 2023, the Company recognized grant income of
£169,854 (2022: £487,293) relating to tranche one of non-dilutive research
grant award from the regional government of Wallonia in southern Belgium SPW
("Wallonia Grant"). The ongoing agreement with the Walloon region allows
Genflow BE to claim reimbursement in further tranches of €767,253, up to the
amount of €3.375 million.
Other Comprehensive Income was charged with a translation gain of £11,853
(2022: £75,158 loss) upon converting the Subsidiary's results for the year
since acquisition to GBP.
Key Performance Indicators ("KPIs")
The Board monitors the activities and performance of the Group on a regular
basis. The Board uses financial indicators based on budget versus actual to
assess the performance of the Group. The indicators set out below will be used
by the Board to assess performance.
The main financial KPI for the Group at this stage are the level of cash and
cash equivalents. Non-financial KPIs are more relevant at this stage, in line
with the monitoring of progress of key milestones in the R&D phase. These
below key KPIs allow the Board to monitor costs and plan future research and
development activities.
2023 2022
Cash and cash equivalents £683,974 £2,356,225
Interaction with health authorities 1 -
Intellectual property held 4 2
In vivo data for targeted indication (Werner and MASH) 2 2
Due to the Group being in the early stages of research and development, it is
yet to reach its key milestones such as completing clinical trials. However,
the Group continues to hit soft-milestones as its journey progresses.
Statement by the directors in performance of their statutory duties in
accordance with s172(1) of the Companies Act 2006
The Director's believe they have acted in the way most likely to promote the
success of the Group for the benefit of its members as a whole, as required by
s172(1) 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 Group's employees;
· Foster the Group's relationships with suppliers and others; and
· Consider the impact of the Group's operations on the community
and environment.
The application of the s172 requirements are demonstrated throughout this
report and the financial statements as a whole, with the following examples
representing some of the key decisions made in 2023 and up to the date of the
approval of these financial statements:
· Entering into Collaboration Agreements with prestigious
organisations to widen the Group's ability to obtain valuable research and to
tap into the knowledge of other researchers.
· Exploring non-dilutive financing opportunities such as regional
government grants to expedite areas of key research and development without
diluting the holding of existing shareholders.
· Expanding on the Company's portfolio of intellectual property by
filing new patent applications in order to protect the Company's research and
development progress.
· Attending the annual AGM and prepared to answer any questions
raised by shareholders.
· Presenting at conferences and published recordings on the Group's
research and development.
· Securing arrangements with SAB members who are experts in sub-sectors
of the longevity field, to enhance the skills and experience required for the
Company as it progresses.
· Expanding organisational capability through appointing experienced
Board members to govern and lead the Company.
· Intending to limit the use of animal models to what is necessary
by the regulatory authorities (FDA, EMA, MHRA) and to that extent, the Company
will seek to use alternatives, such as artificial organs built with human cell
organoids, in testing rather than using animal models. These organoids mimic
the function of a natural organ, therefore they deliver more relevant
information on the potential safety and efficacy of the drug in humans.
However, these organoids do not reflect the interaction of the organ with
other organs, therefore testing on animals cannot always be avoided.
· Ensuring all experiments using animal models are put to an
independent ethical committee for appropriate approval.
Principles 2 and 3 of the Corporate Governance Statement on page 17 provides
further evidence for how Section 172(1) has been applied to strategic issues,
risks or opportunities across key stakeholder groups.
By order of the Board
Eric Leire
Chief Executive Officer
3 May 2024
Operating Risks and Uncertainties
Set out below are the key operating risks and uncertainties affecting the
Group.
Research and development risk
The Group operates in the biotechnology development sectors and will carry out
complex scientific research. If the research, preclinical testing or clinical
trials of any of its product candidates fail, meaning that these candidates
will not be licensed or marketed, this would result in a complete absence of
revenue from these failed candidates. Additionally, any positive results
from trials carried out on animals may not necessarily transfer to humans. For
example, the mouse model study for Werner Syndrome cannot yet be seen to be
fully reliable.
Mitigation: The Company will minimise this risk by broadening its drug
candidate portfolio. Furthermore, the Company establishing a culture of
collaboration with other research organisations with complementary
expertise. Translational projects such as pre-clinical development of
SIRT6-AAV require the integration of many scientific disciplines and breaking
down of the 'cultural' barriers that sometimes exist between the disciplines.
Timeline risk
Failure can occur at any stage of clinical development and, as a result,
enforced delays to the clinical development plan could hinder or prevent
commercialisation of the Group's product candidates. Many markets where the
Group intends to market its future products, including the US, Europe and
Asia, expect proposed new pharmaceutical products to pass stringent standards.
As a result, clinical trial design is extremely important, but costly and
time-consuming, in order to satisfy national government regulatory
authorities, clinical investigators, hospital ethics committees, institutional
review boards, customers and distributors.
Mitigation: The Company intends to minimise this risk by retaining the
skills and knowledge of the Scientific Advisory Board and monitoring R&D
progress against budget and millstones. The Company will also apply for Orphan
Drug Designation which provides a form of scientific advice, allowing sponsors
to get answers to their questions on the types of studies needed to
demonstrate the medicine's quality, benefits and risks, and information on the
significant benefit of the medicine.
Risks related to future funding requirements
The funds raised by the Company, plus the Wallonia Grant are intended to
support the Group's pre-clinical development activities. Additional capital
will have to be raised to support clinical trial activities through
established and highly-regulated pathways to assess safety, tolerability and
efficacy of each of its products before applications can be made to individual
countries or markets. Furthermore, such clinical trials are typically
expensive, complex and can take considerable time to complete.
Whilst the Company believes that it has raised sufficient funds to enable it
to undertake all work preparatory to large animal studies over the next 18
months, the Company will need to raise further funds to complete the
development and commercialisation of its products and to proceed with any
future product candidates.
Mitigation: The Company keeps close control over budgeted vs actual
expenditure to minimise over spending and to track progress against
milestones. The Group will also seek to look at alternative funding such as
grants. The Group also has further fundraising at its disposal, however, it
cannot be guaranteed that further funding from investors will be available
when required.
Risk related to dependence on key personnel
The Group is highly dependent on the expertise and experience of the
Directors, senior management and the Scientific Advisory Board and in
particular Dr Eric Leire and Dr Vera Gorbunova. Recruiting and retaining
qualified personnel (such as Dr Eric Leire and Dr Vera Gorbunova), consultants
and advisers with the relevant gene therapy expertise will be important to its
success.
Mitigation: The Company minimises this risk by bringing additional
competencies within the management team, offering an attractive remuneration
package and including share-based compensation within the remuneration
packages of Board members and key personnel. Furthermore, the Company is
entering into scientific collaborations with organisations in UK, Europe and
USA which allows the Company to utilise the experience of personnel within
these organisations.
The Exclusive Licence Agreement risk
The success of the Group's business is highly dependent upon the Exclusive
Licence granted to Genflow BE by the University of Rochester. Under the terms
of the Exclusive Licence Agreement, Genflow BE is required to maintain high
standards and meet various development milestones and expenditure
requirements.
If the Group fails to meet its obligations under the Exclusive Licence
Agreement or if the Exclusive Licence is terminated for any reason, it could
have a material adverse effect on the business, results of operations,
financial condition and prospects of the Group.
Mitigation: The Company put in place a mitigation strategy upon entering into
the License Agreement by designing a licensing agreement that aligns the
interests of all parties involved. Furthermore, the licensee's obligations
included in the agreement are realistic and proportionate to meet with
appropriate monitoring by the Board.
IP risk
There is no guarantee that the patent applications will result in granted
patents or provide the appropriate level of protection. The Exclusive Licence
granted to Genflow BE pursuant to the Exclusive Licence Agreement is
conditional upon the success of the GF-1002 patent application. The
commercial success of the Group is dependent, in part, on non-infringement of
patents by other third parties. An adverse judgment against the Group may give
rise to significant liability in monetary damages, legal fees and a
requirement to cease manufacturing, marketing or selling products.
Mitigation: A constant monitoring of third parties' activities by IP counsel
will reduce this risk and enable the Group to quickly react in case of
infringement. Moreover, the Group has the right to file infringement
complaints with the courts and to defend its patent rights.
Risk related to the use of Adeno Associated Viruses
There is a risk that safety issues may arise when the Group's products are
tested. This risk is common to all new classes of clinical treatment and, as
with all other biotechnology product companies, there is a general risk that
trials may not be successful.
Mitigation: The Company minimises this risk by engineering its AAVs as safer
non immunologic gene delivery vectors. Furthermore, in parallel to the design
of improved AAVs, the Company is also exploring other 'back-up' gene delivery
methods such as exosomes.
Directors' Report
The Directors present their Report, together with the Group financial
statements and Independent Auditor's Report, for the year ended 31 December
2023.
Principal Activities and Business Review
The Company is a preclinical biotechnology company focused on the development
of innovative biological interventions (namely gene therapies) which are aimed
at tackling the effects of aging, potentially slowing or halting the aging
process and so reducing the incidence of age-related diseases and thereby
increasing health span.
A detailed review of the business of the Group during the year and an
indication of likely future developments may be found in the Chairperson's
Statement on page 3.
Principal risks and uncertainties are discussed on page 10.
Section 172 of The Companies Act has been considered in the Strategic Report
on page 5. The Board is committed to consideration of all stakeholders in
their decision making and conduct of the Group's business.
Results and Dividends
The loss of the Group for the year ended 31 December 2023 from continued
operations amounts to £1,628,705 (2022: £1,335,325).
The Directors do not recommend the payment of a dividend for the year.
Directors
The Directors who held office during the year and up to the date of signature
of the financial statements were as follows:
Tamara
Joseph
Eric Leire
Peter King-Lewis
Guy-Charles Fenneau De La
Horie
Yassine Bendiabdallah
Directors' Interests
The Directors who served during the year ended 31 December 2023 had the
following beneficial interests in the shares of the Company at year end:
Director 31 December 2022 31 December 2023 As at the date of this report
Ordinary Shares Options Ordinary Shares Options Ordinary Shares Options
Eric Leire ((1)) 120,414,999 - 120,414,999 - 124,414,999 -
Yassine Bendiabdallah 470,500 - 470,500 - 1,270,500 -
Peter King-Lewis 382,000 - 382,000 - 1,182,000 -
Guy-Charles Fenneau De La Horie 300,000 - 300,000 - 1,100,000 -
Tamara Joseph - - - - 800,000 -
(1) Eric's wife, Ms J Pattison, holds 150,360 Ordinary Shares.
Substantial Shareholdings
The Company is aware that, as at 3 May 2024, other than the Directors, the
interests of Shareholders holding three per cent or more of the issued share
capital of the Company were as shown in the table below:
Shareholder Shares held Percentage of holdings
Eric Leire 120,414,999 35.5%
Premier Miton 32,000,000 9.2%
Adrian Beeston 17,475,000 5.0%
Jonathan Mark Swann 16,874,000 4.8%
Samantha Bauer 14,500,000 4.1%
Longevity Tech Fund 10,499,998 3.0%
Sarah Beeston 10,000,000 2.9%
Political Contribution
The Group did not make any contributions to political parties during the year.
Corporate Responsibility
Environmental
As a development stage biotechnology business, the Group's operations are at a
relatively small scale. As such, the Group's environmental impact is
relatively small when compared with larger businesses in the sector.
Nevertheless, the Board recognises its responsibility to protect the
environment (particularly as the business scales up) and is fully 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; minimise waste
production; and protect nature and people.
TCFD recommendations serve as a global foundation for effective
climate-related disclosures and set out recommended disclosures structured
under four core elements of how companies operate:
o Governance - The organisation's governance around climate-related risks
and opportunities;
o Strategy - The actual and potential impacts of climate-related risks and
opportunities for an organisation's businesses, strategy, and financial
planning;
o Risk Management - The processes used by the organisation to identify,
assess, and manage climate-related risks; and
o 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 the Group's current progress against the TCFD
recommendations.
TCFD Pillar Recommended Disclosure Genflow Response
Governance · The board's oversight of climate-related risks and opportunities As a research stage biotechnology business, the Group's operations are at a
relatively small scale and so is its environmental impact.
· Management's role in assessing and managing climate related risks
and opportunities 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 Genflow 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
The Board is committed to conserving natural resources and striving for
· Resilience of the organisation's strategy environmental sustainability, by ensuring that its facilities (and the
facilities of academic and contracted collaborators) are operated to optimise
energy usage; minimise waste production; and protect nature and people.
As Genflow progresses towards testing, 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, Genflow has the ability to
embed climate-related risk management systems into its overall internal
· Managing climate-related risks control systems from the start of its journey, thus almost eliminating the
occurrence of transition risk.
· Integration into overall risk management
As operations scale up, 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
and its status as a low energy user. The Group will seek to collect,
· Scope 1, Scope 2, and Scope 3 emissions. structure, and effectively disclose related performance data for the material,
climate-related risks and opportunities identified where relevant.
· Climate-related targets
The Board will also look to adopt the Sustainability Accounting Standards
Board (SASB) recommended disclosures once it is operating on a larger scale.
Greenhouse gas emissions
The Company used less than 40,000kWh of energy in the United Kingdom during
2023 and therefore, does not report on energy consumption and emissions under
the Companies (Directors' Report) and Limited Liability Partnerships (Energy
and Carbon Report) Regulations 2018.
Social
The Board is committed to creating a positive, inclusive and welcoming work
environment for its employees, workers, job applicants and academic and
business partners. The Group ensures that people receive equal treatment,
regardless of gender, gender-identity, age, disability, religion, belief,
political views, sexual orientation, marital status, nationality or race,
physical or mental health.
The Directors believe that diversity is fundamental to the Group and to the
success of developing innovative therapeutic treatments. The Board is
committed to creating a diverse environment, where the rights and differences
of everyone, directly or indirectly operating within the Group, are valued.
Health and safety
The Company operates a comprehensive health and safety programme which will
seek to ensure the wellbeing and security of its employees once it begins to
recruit. The Board will at all times work to ensure that the Group complies
with the highest standards of ethical and safety standards. In addition, the
Group uses hazardous, or potentially hazardous, chemical and biological
materials during its research and development programmes. These materials are
necessary for the core research activities undertaken by the Group. The Group
is committed to ensuring that hazardous chemicals and biological materials are
acquired, stored, transferred, modified, handled, and disposed of in a way
that minimises any potential adverse effects to human health and to the
environment. Their use is based on both an understanding of the hazards they
present and on the corresponding controls aimed at managing the risk of
exposure. The Group complies with the local and national guidelines in all
matters of health and safety.
For scientific and regulatory reasons, animal studies remain a crucial part of
the Group's work to deliver safe and effective therapies, which benefit animal
and patients' health and the wellbeing of our society. At present it is not
possible, either due to lack of suitable alternatives, or because animal
studies are required by regulatory authorities, for the Group to eliminate the
need for animal studies in its work. The Group recognises the ethical
responsibility to treat all animals respectfully, while striving to minimise
their pain or distress, and to avoid it completely when possible. To this end,
the Group strictly complies with all applicable international and local
legislation and regulatory guidelines and, furthermore, is committed to
following the high standards of internationally recognised practices on the
humane treatment of animals. The Group upholds and embraces the "3Rs" of
animal research, namely:
· the replacement of animals when possible and/or acceptable;
· the reduction of the numbers of experiments and of animals required by
each experiment; and
· the minimisation of pain and distress, by means of refinement of animal
studies procedures.
Principal Risks and Uncertainties
The management of the business and the execution of the Group's strategy are
subject to a number of risks. Risks are formally reviewed by the Board, and
appropriate processes are put in place to monitor and mitigate them. The
principal business risks affecting the Group are set out on page 10.
Financial Risk Management
The Group's operations expose it to a variety of financial risks that include
the effect of changes in foreign currency exchange rates, funding risk, credit
risk, liquidity risk and interest rate risk. The Group has a risk management
programme in place that seeks to limit the adverse effects on the financial
performance of the Group. The Group does not use derivative financial
instruments to manage foreign currency risk and, as such, no hedge accounting
is applied.
Details of the Group's financial risk management policies are set out in Note
3 to the financial statements.
Internal Controls
The Board recognises the importance of both financial and non-financial
controls and has reviewed the Group's control environment and any related
shortfalls during the year. Since the Group was established, the Directors are
satisfied that, given the current size and activities of the Group, adequate
internal controls have been implemented. Whilst they are aware that no system
can provide absolute assurance against material misstatement or loss, in light
of the current activity and proposed future development of the Group,
continuing reviews of internal controls will be undertaken to ensure that they
are adequate and effective.
Going Concern
Management has prepared a forecast covering 12 month post-year end and believe
that current cash reserves will adequately cover the working capital
requirements of the Group, in addition to meeting research and development
commitments. As such, the Directors have a reasonable expectation that the
Group has, and will have access, to adequate resources to continue in
operational existence for the foreseeable future and, therefore, continue to
adopt the going concern basis in preparing the Annual Report and financial
statements. Further details on their assumptions and their conclusion thereon
are included in the statement on going concern in Note 2.4 of the financial
statements.
Directors' and Officers' Indemnity Insurance
During the financial year, the Company maintained insurance cover for its
Directors and Officers under a Directors' and Officers' liability insurance
policy. The Company has not provided any qualifying indemnity cover for the
Directors.
Events after the reporting period
Events after the reporting year are set out in Note 20 to the financial
statements.
Provision of Information to Auditor
So far as each of the Directors is aware at the time this report is approved:
· there is no relevant audit information of which the Company's auditor
is unaware; and
· the Directors have taken all steps that they ought to have taken to
make themselves aware of any relevant audit information and to establish that
the auditor is aware of that information.
Auditor
PKF Littlejohn LLP has signified its willingness to continue in office as
auditor.
This report was approved by the Board on 3 May 2024 and signed on its behalf.
Tamara Joseph
Non-Executive Chairperson
3 May 2024
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulation.
Company law in the United Kingdom requires the Directors to prepare Group and
Company financial statements for each financial year which give a true and
fair view of the state of affairs of the Company and the Group and of the
profit or loss of the Group for that year. Additionally, the Financial Conduct
Authority's Disclosure Guidance and Transparency Rules require the Directors
to prepare the Group financial statements in accordance with UK-adopted
international financial reporting standards in accordance with the
requirements of the Companies Act 2006; the Company financial statements are
prepared on the same basis.
In preparing the Group and Company financial statements, the Directors are
required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the financial
statements;
• prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the group and company will continue in
business.
So far as each Director is aware, there is no relevant audit information of
which the Company's auditors are unaware, and the Directors have taken all the
steps that they ought to have taken as Directors in order to make themselves
aware of any relevant audit information and to establish that the Company's
auditors are aware of that information.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the 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 Group and Company
and for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
The maintenance and integrity of the Company's website is the responsibility
of the Directors: the work carried out by the auditors does not involve
consideration of these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to the financial
statements since they were initially presented on the website.
Legislation in the United Kingdom governing the preparation and dissemination
of the financial statements may differ from legislation in other
jurisdictions.
Corporate Governance Report
The Group is not required to comply with the UK Code of Corporate Governance
and has not voluntarily adopted it. However, the Directors recognise the
importance of sound corporate governance and the Board intends, to the extent
it considers appropriate in light of the Group's size, stage of development
and resources, to implement certain corporate governance recommendations.
The Directors have responsibility for the overall corporate governance of the
Group and recognise the need for the highest standards of behaviour and
accountability. As such, the Company follows the QCA Corporate Governance Code
("the Code") as its code of corporate governance. The Code is published by the
Quoted Companies Alliance ("QCA") and is available at www.theqca.com
(http://www.theqca.com) .
Corporate Governance Report
The QCA Code sets out 10 principles that should be applied. These are listed
below together with a short explanation of how the Group and Company applies
each of the principles:
Principle One
Business Model and Strategy
The Board has concluded that the highest medium and long term value can be
delivered to its shareholders by the adoption of a focussed strategy for the
Group.
The Group's strategy is to focus on the development of innovative biological
interventions (namely gene therapies) which are aimed at tackling the effects
of aging, potentially slowing or halting the aging process and so reducing the
incidence of age-related diseases and thereby increasing health span. Further
details on the Group strategy is set out in the Strategic Report on page 5.
Principle Two
Understanding Shareholder Needs and Expectations
The Board is committed to maintaining good communication and having
constructive dialogue with its shareholders. Shareholders are encouraged to
attend the Company's Annual General Meeting. Investors also have access to
current information on the Company though its website, www.genflowbio.com
(http://www.genflowbio.com) , and via communication with Directors, in
particular, Eric Leire, (Chief Executive Officer) who is responsible for
shareholder liaison.
The Company's annual report, Notice of Annual General Meetings (AGM) is sent
to all shareholders and can be downloaded from the Company's website. Copies
of the interim report and other investor presentations are available on the
Company's website.
At the AGM, separate resolutions are proposed on each substantial issue. For
each proposed resolution, proxy forms are issued which provide voting
shareholders with an opportunity to vote in advance of the AGM if they are
unable to vote in person. The Company's registrars count the proxy votes which
are properly recorded and the results of the AGM are announced through
regulatory news flow ("RNS") . The Board is keen to ensure that the voting
decisions of shareholders are reviewed and monitored and that approvals sought
at the Company's AGM are, as much as possible, within the recommended
guidelines of the QCA Code.
Shareholders are kept up to date via RNS on matters of a material substance
and regulatory nature. Periodic updates are provided to the market and any
deviations to these updates are announced via RNS.
Non-deal roadshows may be arranged throughout the year to meet with existing
shareholders and potential new stakeholders to maintain, as much as possible,
transparency and dialogue with the market. Additionally investor presentations
can be found on the Company's website.
Principle Three
Considering wider stakeholder and social responsibilities
The Board recognises that the long term success of the Company is reliant upon
the efforts of the management and employees of the Company and its scientific
advisory board, contractors, suppliers, regulators and other stakeholders. As
the Group grows and develops, the Board have plans to put in place a range of
processes and systems to ensure that there is close oversight and contact with
its key resources and relationships. For example, all employees of the Company
will participate in structured Company-wide annual assessment processes which
are designed to ensure that there is an open and confidential dialogue with
each person in the Company to help ensure successful two way communication
with agreement on goals, targets and aspirations of the employee and the
Company. The Board recognises that these feedback processes will help to
ensure that the Company can respond to new issues and opportunities that arise
to further the success of employees and the Company. The Company has close
ongoing relationships with a broad range of its stakeholders and provides them
with the opportunity to raise issues and provide feedback to the Company.
Principle Four
Risk Management
In addition to its other roles and responsibilities, the Audit Committee is
responsible to the Board for ensuring that procedures are in place and are
being implemented effectively to identify, evaluate and manage the significant
risks faced by the Company. The risk assessment matrix below sets out those
risks, and identifies their ownership and the controls that are in place. This
matrix is updated as changes arise in the nature of risks or the controls that
are implemented to mitigate them. The Audit Committee reviews the risk matrix
and the effectiveness of scenario testing on a regular basis. The following
principal risks and controls to mitigate them, have been identified:
Activity Risk Impact Control(s)
Environmental Risk Negative environmental impact of operations The Group's operations are at a relatively small scale. As such, the Group's Ongoing monitoring to ensure that its facilities and the facilities of
environmental impact is relatively small. academic and contracted collaborators are operated to optimise energy usage
minimise waste production and protect nature and people.
Research and development Risk The research, preclinical testing or clinical trials of any product candidates This could result in a complete absence of revenue from these failed Ongoing monitoring of results, assessment by independent experts on
could fail, meaning that these candidates will not be licensed or marketed. candidates. viability of studies and the retention of the SAB members.
Availability of licenses Risk Failure to meet obligations under the Exclusive Licence Agreement could result The Group would not have any right to commercialise GF-1002 which could have a Ongoing monitoring of the Company's obligations under the Exclusive Licence
in its termination. material adverse effect on the business, result of operations, financial Agreement including the payments of amounts due and reporting obligations.
condition and prospects of the Group.
Grant and infringement of patents Risk There is no guarantee that the Patent Applications will result in granted The commercial success of the Group is dependent, in part, on non-infringement Provide ongoing assistance as may be required by the applicants to the Patent
patents. Also, the Company may not be able to monitor infringement of its of patents by other third parties. Application.
patents by third parties, allowing competitors to increase their market share.
In addition to IP protection, the Company also relies on trade secrets to
create entry barriers to potential competitors.
Dependence on key personnel Risk The Group is highly dependent on the expertise and experience of the A loss of key personnel could result in a loss of knowledge and personnel Recruiting and retaining and incentivising qualified personnel, consultants
Directors, senior management and the Scientific Advisory Board. taking their knowledge to competitors. and advisers with the relevant gene therapy expertise.
Strategic Risk Market downturn Change in macro-economic conditions Ongoing monitoring of economic events and markets
Active marketing and experienced management
Failure to deliver commerciality
Financial Risk Misappropriation of funds Fraudulent activity and loss of funds Robust financial controls and split of duties
Loss of critical financial data Regular back up of data online and locally.
IT security
The Group may be required to reduce the scope of its development Ongoing monitoring of economic events and markets.
Ability to raise further capital
Regulatory Risk The Group will need to obtain various approvals from a number of regulatory The Group's activities will be adversely affected by regulatory factors such Proactive engagement with Government at all levels.
authorities in order to market its future products. as the suspension of licences and changes to regulatory requirements that will
govern any novel gene therapy.
The Directors have established procedures, as represented by this statement,
for the purpose of providing a system of internal control. An internal audit
function is not considered necessary or practical due to the size of the
Company and the close day to day control exercised by the Executive Director.
However, the Board will continue to monitor the need for an internal audit
function. The Board works closely with and has regular ongoing dialogue with
the outsourced finance function and has established appropriate reporting and
control mechanisms to ensure the effectiveness of its control systems.
Principle Five
A Well-Functioning Board of Directors
As at the date hereof, the Board comprises, an Executive Director: Eric Leire,
a Non-Executive Chairperson Tamara Jospeh and three Non-Executive Directors
Yassine Bendiabdallah, Peter King-Lewis and Guy-Charles Fanneau de la Horie.
Details of the current Directors are set out within Principle Six below.
Executive and Non-Executive Directors are subject to re-election at intervals
as set out in the Company's articles of association (Article 29.1). The
service agreement and letters of appointment of all Directors are available
for inspection on reasonable notice at the Company's registered office during
normal business hours.
The Board meets in-person at least once per year and has quarterly Board
calls. During the year, the Company has established an Audit Committee, the
members of which are included in Principle Six below. A Remuneration Committee
and Nomination Committee was also established and seeks to follow the guiding
principles laid out by the Quoted Company Alliance (QCA). No Board member may
influence decisions relating to their own specific remuneration.
Dr Bendiabdallah, Ms Joseph, Dr Fanneau De La Horie and Dr King-Lewis are
considered to be Independent Directors and as such the Company is in
compliance with the requirement to have a minimum of two independent
non-executive directors on its Board. The Board notes that the expectation of
the QCA Code is that the Chairperson will not have an executive capacity and
that the role of the Chairperson and Chief Executive Officer ("CEO") are not
held by the same person. The Board shall review further appointments as scale
and complexity grows.
The Company shall report annually on the number of Board and committee
meetings held during the year and the attendance record of individual
Directors. To date in the current financial year, the Directors have a 100%
record of attendance at such meetings. Directors meet formally and informally
both in person and by telephone. Formal board meetings held and attended
during the year are detailed below:
Meetings Attended Meetings eligible to attend
Eric Leire 4 4
Yassine Bendiabdallah 7 7
Peter King-Lewis 6 6
Guy-Charles Fanneau De La Horie 6 6
Tamara Joseph 5 5
Principle Six
Appropriate Skills and Experience of the Directors
The Board consists of five Directors and, in addition, the Company engages the
services of Westend Corporate LLP to act as the Company Secretary and to
provide general financial and corporate assistance. The Company believes that
the current balance of skills in the Board as a whole, reflects a very broad
range of commercial and professional skills across geographies and industries
and two of the Directors have experience in public markets.
The Board shall review annually the appropriateness and opportunity for
continuing professional development whether formal or informal.
Tamara Joseph, Non-Executive Chairperson
Tamara is a seasoned health care leader, having extensive experience in both
early-stage and commercial biotech companies in the US and other markets. Her
expertise in the biotech sector includes public and private financings,
M&A, global expansions, and a Nasdaq uplisting. She has also supported
Nasdaq financings of over $1B. Her experience, spanning over 25 years,
includes acting as a member of the executive team (as Chief Legal Officer and
General Counsel) at multiple US publicly listed companies, as well as leading
IT, Public and Government Affairs, and People & Culture teams.
Tamara served as Chief Legal Officer at Nasdaq-listed Spero Therapeutics Inc.,
a multi-asset, clinical-stage biopharmaceutical company in Cambridge,
Massachusetts, at Nasdaq-listed, Millendo Therapeutics Inc., to support its
transition to a publicly-traded company, and as General Counsel at Enzyvant
Therapeutics Inc., a rare disease company focused on regenerative medicine
which is now a subdivision of Sumitomo Pharma. Previously, Tamara has served
as an adviser to the boards of five US publicly traded US biotechs, including
Cubist Pharmaceuticals Inc. Tamara has a BA in Economics from Duke University,
a JD from the University of Michigan Law School, and LLM degrees from the
College of Europe in Belgium and the University of Paris. She began her legal
career at the law firms of Morrison & Foerster and Fried Frank, working in
New York, Los Angeles, Brussels and Paris. She also serves as a non-executive
board member for the non-profit organizations of BINA Farm Center and Heluna
Health, a $1B+ agency focused on improving population health.
Tamara Joseph is a member of the Audit Committee.
Dr Eric Leire, Chief Executive Officer
Dr Eric Leire, MD, MBA, brings to the Company a solid biotechnology expertise
through his experience in the pharmaceutical industry (Pfizer, Schering Plough
and Pharmacia), biotechnology (CEO of several private and public biotech
companies such as APT Therapeutics and Paringenix), academia (Research
Associate at the Harvard AIDS Institute) and Private Equity (partner at
Biofund Venture Capital). He is the inventor of several patents. He also
serves on the board of several biotechnology companies such as Pherecydes
(ALPH.PA), Inhatarget, Immunethep andBSIM Therapeutics. Furthermore, Eric has
been CEO of several cell and gene therapy companies such as Enochian
Biosciences (Nasdaq: ENOB) and DanDrit Biotechnologies (OTC.QB: DDRT). He has
also served as Non-Executive Director on the board of several cell and gene
therapy companies such as Genizon (Canada) and FIT Biotechnology (Finland). He
holds an MD from Grenoble University and an MBA from HEC, Paris and Kellogg,
Northwestern University.
Dr Yassine Bendiabdallah, Non-Executive Director
Dr Yassine Bendiabdallah (MPharm, PhD, IP) is a Functional Medicine Healthy
Ageing Specialist and an expert in Bio-identical Hormone therapy (BHRT). His
previous academic degree as an anti-cancer drug discovery scientist with
Cancer Research UK at University College London has earned him various
distinctions and publications in peer-reviewed academic journals. After a few
years in academia, he embarked on an entrepreneurial journey and co-founded
the Zen Healthcare group of pharmacies and wellness clinics with multiple
sites in London and worldwide partnerships. His current role is a clinical
director and clinician with interests including age reversal therapies,
functional approaches to medicine and intravenous micronutrient therapies. He
also co-founded Pasithea Therapeutics, an innovative biotech company and
mental health group of clinics and was, until March 2023, Chief Operations
Officer and head of UK Clinics. He is a director and board member of a number
of companies within the healthcare industry.
Dr Yassine Bendiabdallah is the chairman of the Audit Committee and
Remuneration and Nomination Committee.
Dr Peter King-Lewis, Non-Executive Director
Dr Peter King-Lewis studied Medicine at St Bartholomew's Hospital in London.
Prior to that he served for ten years as a Submarine Seaman Officer and Diver
in The Royal Navy. Having completed Post Graduate Training in General Practice
(St Bartholomew's, St Thomas', The Chelsea and Westminster and The Priory
Roehampton) he founded a Private General Practice in Central London.
Continuing his interest in Hyperbaric Medicine he was an HSE approved Medical
Examiner of Divers. He has a strong interest in Bioidentical Hormones and has
practiced Acupuncture alongside more conventional medicine. Dr King-Lewis also
started and runs OfficeGP Ltd which provides Primary Care in the workplace for
a variety of companies. During the last 27 years he has also been the
President of The Independent Doctors Federation and Hon Sec, President and
Trustee of the Chelsea Clinical Society.
Dr Peter King-Lewis is a member of the Remuneration and Nomination Committee.
Dr Guy-Charles Fanneau De La Horie, Non-Executive Director
Over the past 20 years, Guy-Charles has built, and led, biotech executive
teams where he has acted as Chief Executive Officer. During his tenures, he
has successfully led IPOs and completed multiple fundraisings. Guy-Charles'
expertise in the biotech field in both public and private companies
encompasses launching and selling new drugs in untapped markets, with
successful early access programs. Specifically, Guy-Charles has served as
Chief Executive Officer at three biotech companies, including, until very
recently, Euronext Growth traded, Pherecydes Pharma, a biotech company that
develops treatments against resistant bacterial infections; and Neovacs, a
therapeutic vaccine company. Guy-Charles has also held senior positions at
Biogen, a Nasdaq listed global biotechnology company. Guy-Charles managed the
IPO and associated successful financing of Neovacs in 2010, and in 2021, led
Pherecydes Pharma through an oversubscribed placing.
Dr Guy-Charles Fanneau De La Horie is a member of the Remuneration and
Nomination Committee.
Principle Seven
Evaluate Board performance based on clear and relevant objectives, seeking
continuous improvement
Internal evaluation of the Board, the Committees and individual Directors is
to be undertaken on an annual basis in the form of peer appraisal and
discussions to determine the effectiveness and performance of the various
governance components, as well as the Directors' continued independence.
The results and recommendations that come out of the appraisals for the
Directors shall identify the key corporate and financial targets that are
relevant to each Director and their personal targets in terms of career
development and training. Progress against previous targets shall also be
assessed where relevant.
Principle Eight
Corporate Culture
The Board recognises that its decisions regarding strategy and risk will
impact the corporate culture of the Company as a whole and that this will
impact the performance of the Company. The Board is very aware that the tone
and culture set by the Board will greatly impact all aspects of the Company as
a whole and the way that its scientific advisory board members, research
collaborators and employees behave. The corporate governance arrangements that
the Board has adopted are designed to ensure that the Company delivers long
term value to its shareholders and that shareholders have the opportunity to
express their views and expectations for the Company in a manner that
encourages open dialogue with the Board. A large part of the Company's
activities are centred upon what needs to be an open and respectful dialogue
with employees, clients and other stakeholders.
Therefore, the importance of sound ethical values and behaviours is crucial to
the ability of the Company to successfully achieve its corporate objectives.
The Directors believe that diversity is fundamental to the Group and to the
success of developing innovative therapeutic treatments. The Board is
committed to creating a diverse environment, where the rights and differences
of everyone, directly or indirectly operating within the Group, are valued.
The Board places great importance on this aspect of corporate life and seeks
to ensure that this flows through all that the Company does. The Directors
consider that at present the Company has an open culture facilitating
comprehensive dialogue and feedback and enabling positive and constructive
challenge. The Company has adopted, with effect from the date of Admission, a
code for Directors' and employees' dealings in securities which is appropriate
for a company whose securities are traded and is in accordance with the
requirements of the Market Abuse Regulation which came into effect in 2016.
Issues of bribery and corruption are taken seriously, The Company has a
zero-tolerance approach to bribery and corruption and has an anti-bribery and
corruption policy in place to protect the Company, its employees and those
third parties to which the business engages with. The policy is provided to
staff upon joining the business and training is provided to ensure that all
employees within the business are aware of the importance of preventing
bribery and corruption. Each employment contract specifies that the employee
will comply with the policies. There are strong financial controls across the
business to ensure on going monitoring and early detection.
Principle Nine
Maintenance of Governance Structures and Processes
Ultimate authority for all aspects of the Company's activities rests with the
Board, the respective responsibilities of the Chairperson and Chief Executive
Officer arising as a consequence of delegation by the Board. The Board has
adopted appropriate delegations of authority which set out matters which are
reserved to the Board. The Chairperson is responsible for the effectiveness of
the Board, while management of the Company's business and primary contact with
shareholders has been delegated by the Board to the Chief Executive Officer.
Audit Committee
The Audit Committee comprises Ms Joseph and Dr Bendiabdallah, who chairs this
committee. This committee has primary responsibility for monitoring the
quality of internal controls and ensuring that the financial performance of
the Company is properly measured and reported. It receives reports from the
executive management and auditors relating to the interim and annual accounts
and the accounting and internal control systems in use throughout the Company.
The Audit Committee shall meet not less than twice in each financial year
and it has unrestricted access to the Company's auditors.
Remuneration and Nomination Committee
The Remuneration comprises Dr King-Lewis, Dr Fanneau De La Horie and Dr
Bendiabdallah, who chairs this committee. The Remuneration and Nomination
Committee reviews: remuneration, including making recommendations to the
Company and the Board on the Company's policy on executive remuneration,
including setting the overarching principles, parameters and governance
framework of each of the Company's Executive Directors and certain senior
executives; and the composition and make-up of the Board and any committees of
the Board and evaluating the balance of skills, knowledge and experience and
the size, structure and composition of the Board and committees of the Board,
retirements and appointments of additional and replacement directors and
committee members and will make appropriate recommendations to the Board on
such matters.
Non-Executive Directors
The Board has adopted guidelines for the appointment of Non-Executive
Directors which have been in place and which have been observed throughout the
year. These provide for the orderly and constructive succession and rotation
of the Chairperson and Non-Executive Directors insofar as both the Chairperson
and Non-Executive Directors will be appointed for an initial term of three
years and may, at the Board's discretion believing it to be in the best
interests of the Company, be appointed for subsequent terms. The Chairperson
may serve as a Non-Executive Director before commencing a first term as
Chairperson.
In accordance with the Companies Act 2006, the Board complies with: a duty to
act within their powers; a duty to promote the success of the Company; a duty
to exercise independent judgement; a duty to exercise reasonable care, skill
and diligence; a duty to avoid conflicts of interest; a duty not to accept
benefits from third parties and a duty to declare any interest in a proposed
transaction or arrangement.
Principle Ten
Shareholder Communication
The Board is committed to maintaining good communication and having
constructive dialogue with its shareholders in compliance with regulations
applicable to companies whose shares trade on the Standard Segment of the
London Stock Exchange. All shareholders are encouraged to attend the Company's
Annual General Meeting where they will be given the opportunity to interact
with the Directors.
Copies of all Annual Reports, Notices of Meetings, Circulars sent to
shareholders and Prospectus (in respect of the last 5 years) are included on
the Company's website www.genflowbio.com (http://www.genflowbio.com/) .
Tamara Joseph
Non-Executive Chairperson
3 May 2024
Audit Committee Report
Dear Shareholders,
I am pleased to present the Group's Audit Committee report for the year to 31
December 2023.
Meeting Attendance
The Audit Committee met once in 2023, with the Company's auditors in
attendance. Y Bendiabdallah chaired the meetings and the Committee's second
board member T Joseph attended.
Composition of the Audit Committee
In line with the QCA, the Committee comprises two independent Non-Executive
Directors, including the Chair. The members of the Audit Committee are Y
Bendiabdallah and T Joseph. All current members of the Audit Committee have
held, or currently hold, board-level positions in Biotech with international
reach.
The Audit Committee's membership, as a whole, has competence relevant to the
sector in which the Group operates and is able to function effectively with
the appropriate degree of challenge.
Committee Duties
The Audit Committee is committed to:
· Monitoring the integrity of the financial statements and financial
performance;
· Reviewing financial statements, significant financial returns to
regulators and any financial information of a sensitive nature;
· Reviewing and challenging internal financial controls and risk
management systems including the review of matters of a non-financial nature,
including environmental matters;
· Reviewing and challenging accounting policies, accounting methods and
adherence to accounting standards;
· Reviewing and making recommendation with regards to the external
auditor, including appointment, independence, objectivity, effectiveness,
performance and remuneration;
· Consulting with the external auditor on the scope of their work and
reviewing all major points arising from the audit;
· Ensuring full functionality of the whistleblowing policy.
External Auditor
The external auditor, PKF Littlejohn LLP ("PKF"), was reappointed after
consideration by the audit committee and scrutiny of their independence,
objectivity and capabilities. The Audit Committee also received and reviewed a
report from the external auditor setting out to its satisfaction how its
independence and objectivity is safeguarded when providing non-audit services.
The value of non-audit services provided by PKF in respect of the year ending
31 December 2023 amounted to £nil (2022: £nil). During the year there were
no circumstances where PKF was engaged to provide services prohibited by the
FRC's 2019 ethical standard or which might have led to a conflict of interest.
Financial Statements
The Audit Committee reviewed and agreed the external auditor's strategy and
approach in advance of their audit for the year ended 31 December 2023, and
reviewed reports on the outcome of the audit.
Going Concern and Viability
The Audit Committee reviews supporting papers from management to support the
Going Concern statement set out in note 2.4 and the Directors report. This
includes sensitivity analysis over key assumptions. Following this review, the
Audit Committee recommended to the Board the approval of both statements.
Internal Audit
The Group does not have a formal internal audit function due to the size of
the Group and the low number of transactions during the year. The Audit
Committee considers this is appropriate given the close involvement of the
executive director and external accountant on a day-to-day basis. However, the
need for an internal audit function will be kept under review by the Audit
Committee on behalf of the Board.
The Year Ahead
The Audit Committee is focused on maintaining a framework of internal control,
the effectiveness of which will be regularly reviewed by the Audit Committee
in light of an ongoing assessment of significant risks facing the Company and
the Group. The Audit Committee is committed to assisting the Board in
discharging its duties regarding the financial statements, accounting policies
and the maintenance of proper internal business, and operational and financial
controls.
This report was approved by the Board on 3 May 2024.
Yassine Bendiabdallah
Chairman of the Audit Committee
3 May 2024
Remuneration and Nomination Committee Report
Dear Shareholders,
I am pleased to present the Group's Remuneration and Nomination Committee
report for the year to 31 December 2023.
Committee Composition and Meeting Attendance
The Committee is made up of Independent, Non-Executive Directors and shall
meet not less than twice in each financial year. The Remuneration and
Nomination Committee last met on 16 October 2023.
Committee Duties
The Remuneration Committee is responsible for:
· Determining and agreeing with the Board the framework or broad policy
for the remuneration of the executive offices and other senior managers;
· Take into account all factors which it deems necessary including
the level of the Company's remuneration relative to other companies to ensure
that members of the company are provided with appropriate incentives to
encourage enhanced performance and are, in a fair and reasonable manner,
rewarded for their individual contributions to the success of the Company; and
· Determining each year whether awards will be made, and if so, the
overall amounts of such awards, the individual awards to executive directors
and other senior executives and the performance targets to be used.
Remuneration Policy
Due to the Group being in the early stages of its journey and the Board's
collective commitment to conserve cash, a bonus and incentive awards scheme
does not form part of the executive or non-executive remuneration package.
This will be kept under review by the Committee as the Group's activity
progresses.
Directors notice periods
The Executive Director is subject to a twelve month notice period and all
non-executive Directors are subject to a three month notice period.
Loss of office
None of the Directors contractually have claim to compensation for loss of
office.
Base salary
The Committee's objective is to provide a competitive base salary reflective
of the skills and experience of the relevant individual. These will be
reviewed annually or on a significant change of responsibilities or change in
market practice or a change in the size or complexity of the business. The
Remuneration Committee also takes into account external market data and pay
and employment conditions elsewhere in the Group and industry when considering
increases to base salary levels. There are no performance criteria associated
with receiving this benefit.
Pension
Pensions are provided to aid recruitment and retention by allowing the
Directors to make provision for long-term retirement benefits. These are
comparable with similar roles in similar companies. A Pension scheme has been
set-up where by Directors receive 3% per cent of their base salary. There is
no performance criteria associated with receiving this benefit.
Non-Executive Directors
Non-Executive Directors each receive a market rate basic fee, subject to time
commitment requirements, for holding the office of Non-Executive Director
which is set by the board as a whole.
Annual Report on directors' remuneration
Executive Directors (audited)
The remuneration of the Executive Directors for the year ended 31 December
2023 and period ended 31 December 2022 was as shown in the table below:
31 December 2023
Directors' fees Bonus Taxable benefits Pension benefits Options issued Total
£ £ £ £ £ £
Eric Leire 232,008 - - - - 232,008
232,008 - - - - 232,008
31 December 2022
Directors' fees Bonus Taxable benefits Pension benefits Options issued Total
£ £ £ £ £ £
Eric Leire 235,432 - - - - 235,432
235,432 - - - - 235,432
The Company has presented an annual percentage change of nil% (2022: 63%) in
the amount paid to the CEO.
Non-Executive Directors (audited)
The basic fee for the Non-Executive Directors for 2023 and 2022 was £30,000.
The remuneration of the Non-Executive Directors for the year ended 31 December
2023 and period ended 31 December 2022 was as shown in the table below:
31 December 2023
Directors' fees Bonus Taxable benefits Pension benefits Options issued Total
£ £ £ £ £ £
Yassine Bendiabdallah 30,000 - - 713 - 30,713
Peter King-Lewis 30,000 - - 713 - 30,713
Guy-Charles Fanneau de La Horie 30,000 - - - - 30,000
Tamara Joseph 30,000 - - - - 30,000
120,000 - - 1,426 - 121,426
31 December 2022
Directors' fees Bonus Taxable benefits Pension benefits Options issued Total
£ £ £ £ £ £
Yassine Bendiabdallah 28,810 - - 653 - 29,463
Peter King-Lewis 28,810 - - 653 - 29,463
Gabrielle Silver 13,810 - - 297 - 14,107
Andrew Scott 12,522 - - 179 - 12,701
Guy-Charles Fanneau de La Horie 15,000 - - - - 15,000
Tamara Joseph 15,000 - - - - 15,000
113,952 - - 1,782 - 115,734
Statement of Directors' shareholding and share interests (audited)
The tables below set out the Directors' interests (including those of their
connected persons) in Genflow Biosciences Plc shares as at 31 December 2023.
Executive Directors
Shares owned outright
Eric Leire ((1)) 120,414,999
· Eric indirectly holds a further 150,360 Ordinary Shares by way of
his wife's shareholding.
There were no changes in the Executive Director's interests between the year
end and the date of this report.
Non-Executive Directors
As at the date of this report, Non-Executive Directors' interests were as
follows;
Shares owned outright
Yassine Bendiabdallah 470,500
Peter King-Lewis 382,000
Tamara Joseph -
Guy-Charles Fanneau De La Horie 300,000
Group spend on pay
During the year, the Group's administration expenses totalled £1,798,559
(2022: £1,822,232) of which 21.04% (2022: 19.8%) represented remuneration
paid to Directors of the Company.
Shareholder Voting at the Annual General Meeting
The Directors' Remuneration Report for the period ended 31 December 2022 was
approved by the shareholders at the adjourned Annual General Meeting held on 8
June 2023.
The votes cast were as follows:
Number of votes % of votes cast
For 128,514,675 99.9%
Against 71,531 0.1%
Withheld - -
The year ahead
The Committee has been charged by the Board to ensure that the Group's pay and
benefits practices are competitive, able to attract high calibre people and to
ensure those people are suitably incentivised to perform and remain with the
Group over the long term. The Committee will continue to meet twice a year to
ensure remuneration remains aligned with the Company's objectives and
strategy.
The Committee and I are focused on ensuring that reward at the Company
continues to be closely aligned with the delivery of long-term shareholder
value.
This report was approved by the Board on 3 May 2024.
Yassine Bendiabdallah
Chairman of the Remuneration Committee
3 May 2024
Independent Auditor's Report to the Members of Genflow Biosciences plc
Opinion
We have audited the financial statements of Genflow Biosciences Plc (the
'parent company') and its subsidiaries (the 'group') for the year ended 31
December 2023 which comprise the Consolidated and Parent Company Statements
of Financial Position, the Consolidated Statement of Comprehensive Income,
the Consolidated Statement of Changes in Equity, the Parent Company
Statement of Changes in Equity, the Consolidated and Parent Company Statements
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 and as regards the parent company financial statements, 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 31 December 2023 and of
the group's loss for the year then ended;
· the group 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 UK-adopted international accounting standards and as applied
in accordance with the provisions of the Companies Act 2006; 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.
Conclusions relating to going concern
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 management's assessment of
going concern and associated cashflow forecasts for a period of more than 12
months from the date of approval of the financial statements. We reviewed
management's assessment and made enquiries of management to confirm key
assumptions and inputs used in the assessment. We evaluated the inputs to the
cashflow forecast for reasonableness, including all grant income receivable
and the recent equity fundraise, which are expected to cover working capital
for the going concern period. We also performed sensitivity analysis to test
the going concern model.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the group's or parent company's
ability to continue as a going concern for a period of at least twelve months
from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit,
and in evaluating the effect of misstatements. At the planning stage,
materiality is used to determine the financial statement areas that are
included within the scope of our audit and the extent of sample sizes during
the audit. This is reviewed accordingly during fieldwork and completion
dependent on adjustments made during the audit.
The group was audited to a level of materiality for the financial statements
as a whole of £79,900 (PY: £64,500), a benchmark calculated using 5% of
the loss before tax of the group (PY: 5% of the loss before tax). We
consider the loss before tax to be the most significant determinant of the
group's financial position and performance used by shareholders and investors
for the current period, with the significant balances in the period being the
administrative expenditure and loss for the period.
The performance materiality applied at the group level was £56,000 (PY:
£45,150) and we have reported misstatements during our audit work above
£3,995 (PY: £3,225), as well as differences below that threshold that, in
our view, warranted reporting on qualitative grounds. The group performance
materiality was set by us at 70% of materiality (PY: 70% of materiality). This
was deemed reasonable due to the relatively low level of transactions and
simple nature of these transactions and also due to this being the third year
we are performing the audit. Performance materiality was set to ensure
sufficient coverage of the key balances.
The materiality applied to the parent company was £72,000 (PY: £44,000)
being 5% of the loss before tax (PY: 5% of loss before tax). Loss before tax
was deemed an appropriate benchmark for materiality calculation as it provides
the best indication of annual performance during the research phase and given
no development assets are capitalised. Performance materiality was £50,400
(PY: £30,800) and this was set by us at 70% of materiality (PY: 70% of
materiality). This was deemed reasonable due to the relatively low level of
transactions and simple nature of these transactions and also due to this
being the third year we are performing the audit.
No component auditors were used and both subsidiaries were audited by us.
Genflow Biosciences SRL was assessed as a significant component and was
audited to a materiality of £47,000 (PY: £23,000) being 5% of the loss
before tax (PY: 5% of loss before tax), with performance materiality applied
of £33,000 (PY: £16,100). We agreed with the audit committee that we would
report any individual audit difference in excess of £2,350 (PY: £1,150) for
Genflow Biosciences SRL and differences below this threshold that, in our
review, warranted reporting on qualitative grounds.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risks of
material misstatement in the financial statements. We looked at areas
involving significant accounting estimates and judgements by the directors
including the recoverability and recognition of grant income and the carrying
value of investments - parent company. We also addressed the risk of
management override of internal controls, including among other matters,
consideration of whether there was evidence of bias that represented a risk of
material misstatement due to fraud. Procedures were then performed to address
the risks identified and for the most significant assessed risks of material
misstatement, the procedures performed are outlined below in the Key audit
matters section of this report.
The audit of the parent company and its subsidiaries was performed in London
by us, using a team with specific experience of auditing publicly listed
entities.
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.
Key Audit Matter How our scope addressed this matter
Recoverability and recognition of grant income (Group only - see Note 2.7 and
10 in the financial statements)
Our work in this area included:
The Group received a non-dilutive research grant award of up to €3.375m from
the regional government of Wallonia in southern Belgium SPW. The Grant
contributes to the costs of the pre-clinical research and development program. · Documenting our understanding and performing a walkthrough of the
information system and key controls relevant to research and development
expenditure and submission of grant claims;
There is a significant risk that the grant income recognised is not yet earned · Evaluating the effectiveness of the design and implementation of the key
by the group due to the conditions set out in the grant not being met, and controls in respect of grant income;
as such the recoverability and recognition of grant income has been deemed a
key audit matter. · Substantive testing of receipts relating to grant income, including
accrued income balances recognised at the year-end;
· Reviewing the grant terms and conditions, together with the grant claims,
and ensuring compliance with the terms therein;
· Confirming the treatment of grant income is in accordance with IAS 20,
Accounting for Government Grants and Disclosure of Government Assistance being
the applicable accounting standard; and
· Reviewing post year-end receipts to ensure recoverability and
completeness of income recorded in the accounting period.
We are satisfied that grant income is recoverable and has been recognised
appropriately by management.
Carrying value of investment (Parent company - see Note 9 in the financial
statements)
Genflow Biosciences Plc is the ultimate parent company of the group. The Our work in this area included:
carrying value of investment in subsidiary undertakings as at 31 December 2023
amounted to £770,187 (2022: £1,058,266).
The value of the investment in subsidiaries is material in the parent company · Considering the valuation of the investments in the year and evaluating
financial statements. There is a significant risk the carrying amount of the for any potential impairment indicators;
investment which is subject to management's estimation and judgement might not
reflect any possible impairment and as such this has been deemed to be a key · Obtaining management's impairment review and reviewing the
audit matter. reasonableness of key assumptions and inputs;
· Assessing progress of the research and development activities in the
underlying subsidiaries;
· Reviewing the reassignment of the loan in Genflow Biosciences SRL from
Genflow Biosciences Plc to Genflow Biosciences Inc, including reviewing the
signed agreements and accounting treatment of this in all the impacted
entities; and
· Vouching the increase in the loan in Genflow Biosciences Inc to bank
statements.
Management's assessment of the carrying value of investments was concluded as
reasonable.
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 detailed discussions with management
about and potential instances of non-compliance with laws and regulations both
in the UK and in overseas subsidiaries. We also selected a specific audit team
based on experience with auditing entities within this industry of a similar
size.
· We determined the principal laws and regulations relevant to the
group and parent company in this regard to be those arising from:
o Main Market Listing Rules;
o The Companies Act 2006;
o UK Employment law;
o The Prospectus Directive;
o Anti Bribery Legislation;
o Market Abuse Directive;
o Financial Services and Market Act;
o Disclosure and Transparency Rules;
o Belgium and US law and company reporting requirements; and
o Local tax and employment law.
· 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 Conducting inquiries of management and those charged with governance
regarding potential instances of non-compliance;
o Review of Board minutes and other correspondence from management;
o Review of regulatory news service announcements; and
o Review of legal and professional fees for evidence of any litigation or
claims against the group.
These procedures were carried out for all entities within the group to ensure
no instances of non-compliance within the parent company or any of its
subsidiaries.
· We also identified the potential 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, that a potential for management bias exists in relation to the
recoverability and recognition of grant income and the carrying value of
investment - parent company. See key audit matters section above.
· 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: testing over all journals on a risk based approach to
identify any unusual transactions that could be indicative of fraud; reviewing
accounting estimates for evidence of bias; evaluating the business rationale
of any significant transactions that are unusual or outside the normal course
of business; and reviewing transactions through the bank statements to
identify potentially large or unusual transactions that do not appear to be in
line with our understanding of business operations.
In our audit procedures, we have considered matters of non-compliance with
laws and regulations, including fraud at the group and component levels. We
have performed audit procedures on all material components within the Group.
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 Audit Committee on 21 January 2022 to audit the
financial statements for the period ending 31 December 2021 and subsequent
financial periods. Our total uninterrupted period of engagement is 3 years,
covering the periods ending 31 December 2021 to 31 December 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.
David Thompson (Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn LLP
Canary Wharf
Statutory Auditor
London E14 4HD
3 May 2024
Consolidated and Company Statement of Financial Position
Group Company
Notes Year ended 31 December 2023 Year ended 31 December 2022 Year ended 31 December 2023 Year ended 31 December 2022
£ £ £ £
Non-Current Assets
Property, plant & equipment 3,394 2,351 - -
Investments 9 - - 770,187 1,058,266
Total non-current assets 3,394 2,351 770,187 1,058,266
Current Assets
Trade and other receivables 10 384,285 258,885 144,338 153,874
Cash and cash equivalents 11 683,974 2,356,225 247,539 1,639,776
Total current assets 1,068,259 2,615,110 391,877 1,793,650
Total Assets 1,071,653 2,617,461 1,162,064 2,851,916
Current Liabilities
Trade and other payables 12 345,738 250,988 117,014 71,515
Total Liabilities 345,738 250,988 117,014 71,515
Net Assets 725,915 2,366,473 1,045,050 2,780,401
Equity attributable to owners of the Parent
Share capital 14 87,752 87,752 87,752 87,752
Share premium 14 4,190,900 4,190,900 4,190,900 4,190,900
Other reserves 15 219,488 231,341 - -
Retained earnings (3,772,225) (2,143,520) (3,233,602) (1,498,251)
Total Equity 725,915 2,366,473 1,045,050 2,780,401
The Company has taken advantage of the exemption under Section 408 of the
Companies Act 2006 from presenting its own profit and loss account. During the
year ended 31 December 2023, the Company made a loss for the year of
£1,735,351 (2022: £882,842).
The financial statements were approved and authorised for issue by the Board
of Directors on 3 May 2024 and were signed on its behalf by:
Eric Leire
Chief Executive Officer
Consolidated Statement of Comprehensive Income
Group
Continuing Operations Notes Year ended 31 December 2023 Year ended 31 December 2022
£ £
Other operating income 169,854 487,293
Operating Profit 169,854 487,293
Administration expenses 6 (1,798,559) (1,822,236)
Operating Loss (1,628,705) (1,334,943)
Net finance costs - (382)
Loss before Taxation (1,628,705) (1,335,325)
Income tax 8 - -
Loss for the year from continuing operations (1,628,705) (1,335,325)
Loss attributable to:
- owners of the Parent (1,628,705) (1,335,325)
(1,628,705) (1,335,325)
Other Comprehensive Income:
Items that may be subsequently reclassified to profit or loss
Exchange differences on translating foreign operations
(11,853) 75,158
Total Comprehensive Income (1,640,558) (1,260,167)
Attributable to:
- owners of the Parent (1,640,558) (1,260,167)
Total Comprehensive Income from continuing operations (1,640,558) (1,260,167)
Earnings per share (pence) from continuing operations attributable to owners 16 (0.557) (0.457)
of the Parent - Basic & Diluted
Consolidated Statement of Changes in Shareholders' Equity
Attributable to Equity Shareholders- Group
Share capital Share premium Other reserves Retained losses Total equity
£ £ £ £ £
As at 1 January 2022 73,371 633,765 156,183 (808,195) 55,124
Loss for the period - - - (1,335,325) (1,335,325)
Other comprehensive income
Exchange differences on translating foreign operations - - 75,158 - 75,158
Total comprehensive income for the period - - 75,158 (1,335,325) (1,260,167)
Transactions with owners
Issue of ordinary shares 14 14,381 3,820,539 - - 3,834,920
Cost of capital - share issue costs 14 - (263,404) - - (263,404)
Total transactions with owners 14,381 3,557,135 - - 3,571,516
As at 31 December 2022 87,752 4,190,900 231,341 (2,143,520) 2,366,473
As at 1 January 2023 87,752 4,190,900 231,341 (2,143,520) 2,366,473
Loss for the period - - - (1,628,705) (1,628,705)
Other comprehensive income
Exchange differences on translating foreign operations - - (11,853) - (11,853)
Total comprehensive income for the period - - (11,853) (1,628,705) (1,640,558)
As at 31 December 2023 87,752 4,190,900 219,488 (3,772,225) 725,915
Company Statement of Changes in Shareholders' Equity
Attributable to Equity Shareholders- Company
Share capital Share premium Retained losses Total equity
£ £ £ £
As at 18 January 2022 73,371 633,765 (615,409) 91,727
Loss for the period - - (882,842) (882,842)
Other comprehensive income - - - -
Total comprehensive income for the period - - (882,842) (882,842)
Transactions with owners
Issue of ordinary shares 14 14,381 3,820,539 - 3,834,920
Cost of Capital - share issue costs 14 - (263,404) - (263,404)
Total transactions with owners 14,381 3,557,135 - 3,571,516
As at 31 December 2022 87,752 4,190,900 (1,498,251) 2,780,401
As at 1 January 2023 87,752 4,190,900 (1,498,251) 2,780,401
Loss for the period - - (1,735,351) (1,735,351)
Other comprehensive income - - - -
Total comprehensive income for the period - - (1,735,351) (1,735,351)
As at 31 December 2023 87,752 4,190,900 (3,233,602) 1,045,050
Consolidated and Company Statement of Cash flows
Group Company
Notes Year ended 31 December 2023 Year ended 31 December 2022 Year ended 31 December 2023 Year ended 31 December 2022
Cash flows from operating activities
Loss after taxation (1,628,705) (1,335,325) (1,735,351) (882,842)
Adjustments for:
Depreciation & amortisation 1,034 129 - -
Forgiveness of loan - - 1,116,367 -
Share based payments - 72,000 - 72,000
Increase in trade and other receivables 10 (131,014) (206,339) 12 (102,371)
Increase/(decrease) in trade and other payables 12 103,228 29,561 55,023 (137,108)
Foreign exchange - 71,120 - -
Net cash used in operating activities (1,655,457) (1,368,324) (563,949) (1,050,321)
Cash flows from investing activities
Purchase of property, plant & equipment (2,439) (2,480) - -
Cash paid for acquisitions - - - -
Loans granted to subsidiaries - - (828,288) (975,985)
Net cash used in investing activities (2,439) (2,480) (828,288) (975,985)
Cash flows from financing activities
Proceeds from issue of shares 14 - 3,762,920 - 3,762,920
Share issue costs 14 - (263,404) - (263,404)
Net cash generated from financing activities - 3,499,516 - 3,499,516
Net (decrease)/increase in cash and cash equivalents (1,657,896) 2,128,183 (1,392,237) 1,473,210
Cash and cash equivalents at beginning of year 2,356,225 224,004 1,639,776 166,566
FX on cash (14,355) 4,038 - -
Cash and cash equivalents at end of year 11 683,974 2,356,225 247,539 1,639,776
Non-cash investing and financing activities
Consultancy fees settle in shares
- (72,000) - (72,000)
Notes to the Financial Statements
ACCOUNTING POLICIES
1. General Information
The principal activity of Genflow Biosciences Plc ("the Company") and its
subsidiaries (together "the Group") is the research and development of gene
therapy targeting the upstream biology of aging.
The Company is incorporated and domiciled in the United Kingdom. The Company
was incorporated on 18 January 2021 and commenced trading on this date.
The address of its registered office is 6 Heddon Street, London, W1B 4BT.
2. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these
financial statements are set out below. These policies have been consistently
applied to all the periods presented, unless otherwise stated.
2.1 Basis of Preparation of Financial Statements
The financial statements of the Company are prepared in accordance with Part
15 of the Companies Act 2006, which applies to companies generally.
The Group financial statements have been prepared in accordance with
UK-adopted international accounting standards and the Companies Act 2006. The
Group financial statements have been prepared under the historical cost
convention.
The financial statements are presented in UK Pounds Sterling rounded to the
nearest pound.
The preparation of financial statements in conformity with IFRSs requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's Accounting
Policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the financial
statements, are disclosed in Note 4.
2.2 Changes in accounting policy and disclosures
(a) New and amended standards mandatory for the first time for the financial
periods beginning on or after 1 January 2023
The International Accounting Standards Board (IASB) issued various amendments
and revisions to International Financial Reporting Standards and IFRIC
interpretations. The amendments and revisions were applicable for the year
ended 31 December 2023 but did not result in any material changes to the
financial statements of the Group or Company.
b) New standards, amendments and interpretations in issue but not yet
effective or not yet endorsed and not early adopted
Standards, amendments and interpretations that are not yet effective and have
not been early adopted are as follows:
Standard Impact on initial application Effective date
IFRS 16 (Amendments) Property, plant, and equipment 1 January 2024
IAS 1 (Amendments) Classification of Liabilities as Current or Non-Current. 1 January 2024
IFRS S1* Disclosure of Sustainability-related Financial Information 1 January 2024
IFRS S2* Climate-related Disclosures 1 January 2024
(* )IFRS S1/S2 are subject to local regulation.
The Group is evaluating the impact of the new and amended standards
above which are not expected to have a material impact on future Group
financial statements.
2.3 Basis of Consolidation
The Group financial statements consolidate the financial statements of Genflow
Biosciences Plc and the financial statements of all of its subsidiary
undertakings made up to 31 December 2023.
Subsidiaries are entities over which the Group has control. The Group controls
an entity when the Group is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those
returns through its power over the entity. Where an entity does not have
returns, the Group's power over the investee is assessed as to whether control
is held. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are deconsolidated from the date that control
ceases.
The Group applies merger accounting to account for the acquisition of
subsidiaries under common control. The consideration transferred for the
acquisition of a subsidiary is equal to the assets transferred without any
restatement to fair value, the liabilities incurred to the former owners of
the acquiree and the equity interests issued by the Group. The difference that
arises on consolidation is deducted from, or added to, reserves.
Acquisition-related costs are expensed as incurred unless they result from the
issuance of shares, in which case they are offset against the premium on those
shares within equity.
Investments in subsidiaries are accounted for at cost less impairment.
Inter-company transactions, balances, income and expenses on transactions
between group companies are eliminated. Profits and losses resulting from
intercompany transactions that are recognised in assets are also eliminated.
Where considered appropriate, adjustments are made to the financial
information of subsidiaries to bring the accounting policies used into line
with those used by other members of the Group. All intercompany transactions
and balances between Group enterprises are eliminated on consolidation.
2.4 Going Concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position, are set out in the
Chairman's Report from page 3. In addition, Note 3 to the financial
statements includes the Group's objectives, policies and processes for
managing its capital; its financial risk management objectives; and details of
its exposure to credit and liquidity risk.
Although the Group's assets are not generating revenue streams, an operating
loss has been reported and an operating loss is expected in the 12 months to
31 December 2024, the Directors believe that the Group will have sufficient
funds to meet its immediate working capital requirements over the next 12
months from the date of approval of these financial statements. As at 31
December 2023, the Group has cash resources of £683,974 and completed a
placing of £715,000 (before expenses) in April 2024. The Group also received
the second half of the initial grant reimbursement from the Wallonia Region,
totalling €340,000 in April, in addition to securing further grant funding
of €1.55m, of which €777,273 is due to be received imminently.
Management plan to use these funds to meet the working capital requirements of
the Group and to further its research and development activities. Management
has prepared forecast covering 18 month post-year end and believe that current
cash reserves will adequately cover the working capital requirements of the
Group in addition to meeting research and development commitments.
As such, the Directors have a reasonable expectation that the Group has and
will have future access to adequate resources to continue in operational
existence for the foreseeable future and, therefore, continue to adopt the
going concern basis in preparing the Annual Report and financial statements.
2.5 Segment Reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of
Directors that makes strategic decisions.
Segment results, include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis.
2.6 Foreign Currencies
(a) Functional and presentation currency
Items included in the financial statements of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the 'functional currency'). The functional currency of the
Company is Sterling, the functional currency of the US subsidiary is US
Dollars and the functional currency of the Belgian subsidiary is Euros. The
financial statements are presented in Pounds Sterling, rounded to the nearest
pound.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions or
valuation where such items are re-measured. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in the Income Statement.
(c) Group companies
The results and financial position of all the Group's entities (none of which
has the currency of a hyperinflationary economy) that have a functional
currency different from the presentation currency are translated into the
presentation currency as follows:
· assets and liabilities for each statement of financial position
presented are translated at the closing rate at the date of that statement of
financial position;
· income and expenses for each statement of comprehensive income
presented are translated at average exchange rates (unless this average is not
a reasonable approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are translated at the
dates of the transactions); and
· all resulting exchange differences are recognised in other
comprehensive income where material.
On consolidation, exchange differences arising from the translation of the net
investment in foreign entities, and of monetary items receivable from foreign
subsidiaries for which settlement is neither planned nor likely to occur in
the foreseeable future, are taken to other comprehensive income. When a
foreign operation is sold, such exchange differences are recognised in the
income statement as part of the gain or loss on sale.
2.7 Grant income recognition
Grant income is recognised within other operating income. Grants are
recognised as due to the Group when there is reasonable assurance that:
• the Group will comply with the conditions attached to the
payments; and
• the grants or contributions will be received.
Amounts recognised as due to the Group are credited to the Statement of
Comprehensive Income if the conditions attaching to the grant have been met.
Monies advanced as grants for which conditions have not been satisfied are
carried in the Balance Sheet as a creditor. Where the conditions to the grant
have been met but the grant income is yet to be received, a debtor will be
recognised equal to the submission made, accruing evenly over the period in
which the submission relates.
2.8 Research and development
Expenditure on research activities undertaken with the prospect of gaining new
scientific or technical knowledge and understanding is recognised in the
income statement as an expense as incurred. Development costs that are
directly attributable to the design and testing of identifiable and unique
products controlled by the Group are recognised as intangible assets where the
following criteria are met:
o It is technically feasible to complete the asset so that it will be
available for use;
o Management intends to complete the asset and use or sell it;
o There is an ability to use or sell the asset;
o It can be demonstrated how the asset will generate probable future
economic benefits;
o Adequate technical, financial and other resources to complete the
development and to use or sell the asset are available; and
o The expenditure attributable to the asset during its development can be
reliably measured.
Directly attributable costs that are capitalised as part of the asset include
the product development employee costs and an appropriate portion of relevant
overheads. Other development expenditures that do not meet these criteria are
recognised as an expense as incurred. Development costs previously recognised
as an expense are not recognised as an asset in a subsequent period.
2.9 Financial Assets
(a) Classification
The Group classifies its financial assets in the following categories: at
amortised cost including trade receivables and other financial assets at
amortised cost, at fair value through other comprehensive income and at fair
value through profit or loss, loans and receivables, and available-for-sale.
The classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial assets
at initial recognition.
(b) Recognition and measurement
Amortised cost
Trade and other receivables are recognised initially at the amount of
consideration that is unconditional, unless they contain significant financing
components, in which case they are recognised at fair value. The group holds
the trade and other receivables with the objective of collecting the
contractual cash flows, and so it measures them subsequently at amortised cost
using the effective interest method.
The group classifies its financial assets as at amortised cost only if both of
the following criteria are met:
· the asset is held within a business model whose objective is to
collect the contractual cash flows; and
· the contractual terms give rise to cash flows that are solely
payments of principle and interest.
(c) Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all
debt instruments not held at fair value through profit or loss. ECLs are based
on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original effective interest rate. The
expected cash flows will include cash flows from the sale of collateral held
or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has
not been a significant increase in credit risk since initial recognition, ECLs
are provided for credit losses that result from default events that are
possible within the next 12-months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the
default (a lifetime ECL).
For trade receivables (not subject to provisional pricing) and other
receivables due in less than 12 months, the Group applies the simplified
approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group
does not track changes in credit risk, but instead, recognises a loss
allowance based on the financial asset's lifetime ECL at each reporting date.
The Group considers a financial asset in default when contractual payments are
90 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 and usually occurs when
past due for more than one year and not subject to enforcement activity.
At each reporting date, the Group assesses whether financial assets carried at
amortised cost are credit impaired. A financial asset is credit-impaired when
one or more events that have a detrimental impact on the estimated future cash
flows of the financial asset have occurred.
(d) Derecognition
The Group derecognises a financial asset only when the contractual rights to
the cash flows from the asset expire, or when it transfers the financial asset
and substantially all the risks and rewards of ownership of the asset to
another entity.
On derecognition of a financial asset measured at amortised cost, the
difference between the asset's carrying amount and the sum of the
consideration received and receivable is recognised in profit or loss. This is
the same treatment for a financial asset measured at fair value through profit
and loss.
2.10 Financial Liabilities
Financial liabilities are classified, at initial recognition, as financial
liabilities at fair value through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging instruments in an effective
hedge, as appropriate. All financial liabilities are recognised initially at
fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs. The Group's financial liabilities
include trade and other payables.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as
described below:
Trade and other payables
Trade payables are obligations to pay for goods or services that have been
acquired in the ordinary course of business from suppliers. Accounts payable
are classified as current liabilities if payment is due within one year or
less. If not, they are presented as non-current liabilities.
Trade payables are recognised initially at fair value, and subsequently
measured at amortised cost using the effective interest method.
Derecognition
A financial liability is derecognised when the associated obligation is
discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is recognised in
profit or loss and other comprehensive income.
2.11 Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and in hand and are subject to
an insignificant risk of changes in value.
2.12 Taxation
Tax is recognised in the Income Statement, except to the extent that it
relates to items recognised in other comprehensive income or directly in
equity. In this case, the tax is also recognised in other comprehensive income
or directly in equity, respectively.
Deferred income tax is recognised, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. Deferred income tax
is determined using tax rates (and laws) that have been enacted, or
substantially enacted, by the end of the reporting year and are expected to
apply when the related deferred income tax asset is realised, or the deferred
income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is
probable that future taxable profit will be available against which the
temporary differences can be utilised.
Deferred income tax assets are recognised on deductible temporary differences
arising from investments in subsidiaries, associates and joint arrangements
only to the extent that it is probable the temporary difference will reverse
in the future and there is sufficient taxable profit available against which
the temporary difference can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax
liabilities, and when the deferred income tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the taxable
entity or different taxable entities where there is an intention to settle the
balances on a net basis.
There has been no tax credit or expense for the period relating to current or
deferred tax.
2.13 Share Capital and reserves
Ordinary shares are classified as equity.
Share Premium - the reserve for shares issued above the nominal value. This
also includes the cost of share issues that occurred.
Retained Earnings - the retained earnings reserve includes all current and
prior periods retained profit and losses.
Other Reserves - consists of the following;
- Merger Reserve - represents the difference between the value of
shares issued by the Company in exchange for the value of shares acquired in
respect of the acquisition of subsidiaries.
- Foreign Currency Translation Reserve - represents the translation
differences arising from translating the financial statement items from
functional currency to presentational currency.
2.14 Earnings per share
Basic earnings per share is calculated by dividing:
- the profit 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 year, adjusted for bonus elements in ordinary shares issued
during the year and excluding treasury shares (note 14).
Diluted earnings per share adjusts the figures used in the determination of
basic earnings per share to take into account:
- the after-income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares; and
- the weighted average number of additional ordinary shares that would
have been outstanding, assuming the conversion of all dilutive potential
ordinary shares.
2.15 Operating Leases
Leases of assets under which the short-term exemption under IFRS 16 has been
taken and which a significant amount of the risks and benefits of ownership
are effectively retained by the lessor are classified as operating leases.
Operating lease payments are charged to the income statement on a
straight-line basis over the period of the respective leases. During the year
the Group has one lease agreement in place on a one-month rolling basis, which
is exempt from disclosure under IFRS 16.
3. Financial Risk Management
3.1 Financial Risk Factors
The Group's activities expose it to a variety of financial risks being market
risk (including, interest rate risk and currency risk), credit risk and
liquidity risk. The Group's overall risk management programme focuses on the
unpredictability of financial markets and seeks to minimise potential adverse
effects on the Group's financial performance.
Market Risk
(a) Foreign currency risks
The Group operates internationally and is exposed to foreign exchange risk
arising from various currency exposures, primarily with respect to the Euro
against the UK pound. Foreign exchange risk arises from future commercial
transactions, recognised assets and liabilities and net investments in foreign
operations. The Parent Company sends funds to the operating subsidiary to fund
research and development and is at risk of being exposed to unfavourable
exchange rates. The Company mitigates this risk by buying Euros when exchange
rates are favourable and holding them in a designated foreign currency
account. The Company only issues loan funding to the subsidiary in Euros. The
Group negotiates all material contracts for activities in relation to its
subsidiary in Euros. The Directors will continue to assess the effect of
movements in exchange rates on the Group's financial operations and initiate
suitable risk management measures where necessary.
An analysis of the Group's net monetary assets by functional currency of the
underlying companies at the year-end is as follows:
Currency Total
GBP EUR USD
2022 2022 2022 2022
Currency of net monetary assets £ £ £ £
Pound Sterling 1,623,713 - - 1,623,713
Euro 4,059 716,449 - 720,508
US Dollar 1,992 - - 1,992
Australian Dollar 10,012 - - 10,012
At 31 December 2022 1,639,776 716,449 - 2,356,225
Currency Total
GBP EUR USD
2023 2023 2023 2023
Currency of net monetary assets £ £ £ £
Pound Sterling 244,487 - - 244,487
Euro 370 436,435 - 436,805
US Dollar 2,682 - - 2,682
Australian Dollar - - - -
At 31 December 2023 247,539 436,435 - 683,974
The table above indicates that the Company's primary exposure is to exchange
rate movements between UK Pound Sterling and the Euro. The table below shows
the impact of changes in exchange rates on the result and financial position
of the Company.
2023 2022
£ £
Pound Sterling 10% weakening against Euro (43,681) (72,051)
Pound Sterling 10% strengthening against Euro 43,681 72,051
Pound Sterling 20% weakening against Euro (87,361) (144,102)
Pound Sterling 20% strengthening against Euro 87,361 144,102
(b) Interest rate risk
As the Group has no borrowings, it is not exposed to interest rate risk on
financial liabilities. The Group's interest rate risk arises from its cash
held on short-term deposit, which is not significant.
Credit Risk
Credit risk arises from cash and cash equivalents as well as outstanding
receivables. The Group does not currently generate sales and any receivable
balances are granted after careful assessment by Management to ensure there is
a high chance of recoverability. Management does not expect any losses from
non-performance of these receivables.
The Group considers the credit ratings of banks in which it holds funds in
order to reduce exposure to credit risk.
Liquidity Risk
The Group's continued future operations depend on the ability to raise
sufficient working capital through the issue of equity share capital or debt.
The Directors are reasonably confident that adequate funding will be
forthcoming with which to finance operations. Controls over expenditure are
carefully managed. See note 2.4 for further details on going concern and
liquidity.
3.2 Capital Risk Management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern, in order to provide returns for
shareholders and to enable the Group to continue its research and development
activities. The Group has no debt at 31 December 2023 and defines capital
based on the total equity of the Company. The Group monitors its level of cash
resources available against future planned operational activities and the
Company may issue new shares in order to raise further funds from time to
time.
4. Critical Accounting Estimates and Judgements
The preparation of the Group financial statements in conformity with IFRSs
requires Management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amount of
expenses during the year. Actual results may vary from the estimates used to
produce these financial statements.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
The significant items subject to such estimates and assumptions are as
follows;
Research and development
IAS 38 Intangible Assets requires management to differentiate between research
and the development phase of R&D activities and their related costs. In
accordance with IAS 38, an intangible asset arising from development shall be
recognised if, and only, if, an entity can demonstrate certain criteria. The
Board continually monitor its activities against the prescribed criteria to
determine the point in which the Group would enter the development phase of
its activities. The entity is currently in the phases of formulation, design
and evaluation of its product and therefore management are confident that the
entity is in the research phase. As a result, any expenditure arising from
R&D activities are expensed in the Statement of Comprehensive Income.
Intercompany loans
In the prior year management assessed the recovery profile of the Parent
Company loans granted to subsidiaries and noted the research and development
timetable would mean that repayment of the amounts loaned would not commence
in the short to medium term and accordingly the loans were considered to not
be repayable and have been classified as an investment in subsidiary.
Management performed an assessment over whether the investment in Genflow US
of £684,860 and loans to Genflow BE of £85,326 were impaired. The
determination of the assumptions is subjective and requires the exercise of
considerable judgement about the outcome of research and development activity,
probability of technical and regulatory success, amount and timing of
projected future cash flow or changes in market conditions. Any changes in key
assumptions could materially affect whether an impairment exists. Several
factors such as Genflow BE receiving positive feedback from regulatory
agencies and successful patent applications give management comfort that no
impairment indicators exist.
Impairment of receivables
Included in other receivables is an amount of £303,791 (2022: £92,535) as at
31 December 2023 in respect of grant income. As at 31 December 2023, the
Directors were confident that the amount will be recovered in full and
therefore did not recognised any impairment to the carrying value of this
amount. The full amount was received in April 2024.
5. Segmental Information
As at 31 December 2023, the Group operates in two geographical areas, the UK
and Belgium. The Parent Company operates in one geographical area, the UK.
Activities in the UK are mainly administrative in nature whilst activities in
Belgium relate to research and development. The US entity is dormant. The
reports used by the chief operating decision maker are based on these
geographical segments.
2023 Belgium UK Total
£ £ £
Other operating income 169,854 - 169,854
Administrative expenses (1,084,700) (713,859) (1,798,559)
Loss from operations per reportable segment (914,845) (713,860) (1,628,705)
Reportable segment assets 771,258 297,001 1,068,259
Reportable segment liabilities 228,724 117,014 345,738
2022 Belgium UK Total
£ £ £
Other operating income 487,293 - 487,293
Administrative expenses (887,130) (935,106) (1,822,236)
Other losses - - -
Loss from operations per reportable segment (399,837) (935,106) (1,334,943)
Reportable segment assets 821,460 1,793,650 2,615,110
Reportable segment liabilities 179,473 71,515 250,988
6. Expenses by Nature
Group
31 December 2023 31 December 2022
£ £
Directors' fees 362,312 349,384
Directors' pensions 1,093 1,782
Directors' social security contributions 14,945 9,329
Fees payable to the Company's auditors for the audit of the Parent Company and 53,285 41,790
group financial statements
Professional, legal and consulting fees 215,971 381,534
PR and marketing 106,819 165,889
Accounting related services 7,839 7,245
Insurance 22,476 33,423
Office and administrative expenses 18,897 4,496
IT and software services 5,828 2,249
Travel and entertainment 23,830 14,193
Research and development costs 960,314 724,465
Share based payments - 72,000
Other expenses 3,916 14,327
Depreciation 1,034 130
Total administrative expenses 1,798,559 1,822,236
7. Employees
The average monthly number of employees, including Directors, during the year
was 5 (2022: 5). There were no employees during the year other than the
Directors. See the Remuneration and Nomination Committee Report on page 24 for
details of remuneration paid to Directors serving during the year.
8. Taxation
Group Company
Tax recognised in profit or loss 2023 2022 2023 2022
£ £ £ £
Current tax - - - -
Deferred tax - - - -
Total tax charge in the Statement Of Comprehensive Income - - - -
The tax on the Group's loss differs from the theoretical amount that would
arise using the weighted average tax rate
applicable to the losses of the consolidated entities as follows:
Group 2023 2022
£ £
Loss before tax (1,628,705) (1,335,325)
Tax at the weighted average rate of 23.5% (Company: 19%) (382,746) (272,405)
Expenditure not deductible for tax purposes 40,754 25,343
Net tax effect of losses carried forward on which no deferred tax asset is 341,992 247,062
recognised
Income tax for the year - -
The weighted average applicable tax rate of 23.5% used is a combination of the
23.5% standard rate of corporation tax in the UK (UK corporation tax changed
from 19% to 25% in the period), 21% US corporation tax and 25% Belgian
corporation tax.
The Group has accumulated tax losses of approximately £3,521,598 (2022:
£2,066,314) and the Company had accumulated tax losses of approximately
£1,951,009 (2022: £1,384,255) available to carry forward against future
taxable profits. A deferred tax asset has not been recognised because of
uncertainty over future taxable profits against which the losses may be
utilized.
9. Investment in Subsidiary Undertakings
Company
2023 2022
£ £
Shares in subsidiary undertakings
At beginning of the period 1,058,266 68,131
Additions to investments - -
Additions to loans 763,346 -
Loan reassignment (1,116,367) -
Loans receivable 64,942 990,135
At period end 770,187 1,058,266
During the year, £143,428 (2022: £990,135) was loaned by the Company to
Genflow Biosciences Srl and £Nil (2022: £Nil) was repaid. During the year,
£1,116,367 owing from Genflow Biosciences Srl was reassigned to Genflow
Biosciences Inc in return for cash consideration of £1. £64,942 was owing to
the Company by Genflow Biosciences Srl at the year end.
Also during the year, £684,860 was loaned by the Company to Genflow
Biosciences Inc.
The additions and resignment to the loans owing to the Company by Genflow
Biosciences Inc at the year-end is in respect of working capital and is not
expected to be repaid. As such, it forms part of the amount invested into
Genflow Biosciences Inc by the Company.
Investments in Group undertakings are stated at cost less impairment.
Details of subsidiaries at 31 December 2023 are as follows:
Name of subsidiary Country of incorporation Share capital held by Group Share capital held by Company Principal activities
Registered office address
Genflow Biosciences Inc. United States £20,383 100% Dormant Harvard Square, One Miffin Place #400, Cambr idge, MA 02138
Genflow Biosciences SRL Belgium £684,183 100% Research and development Rue Auguste Piccard 48 6041 Gosselies
10. Trade and Other Receivables
Group Company
2023 2022 2023 2022
£ £ £ £
VAT receivable 36,278 32,612 6,337 15,861
Prepayments 41,041 131,414 41,041 38,879
Other receivables 306,966 94,859 96,960 99,134
384,285 258,885 144,338 153,874
Included in other receivables is £303,791 due from the Wallonia Region of
Southern Belgium in respect of an R&D grant awarded to Genflow Biosciences
SRL. The balance was received in full post year end.
The Company is entitled to claim up to 70% of qualifying expenditure which has
been spent on R&D activities. To date, the Company has received £332,527.
Grant income of £169,854 (2022 - £487,293) has been recognised within the
Consolidated Statement of Other Comprehensive Income.
Trade and other receivables are all due within one year. The fair value of all
receivables is the same as their carrying values stated above. These assets,
excluding prepayments, are the only form of financial asset within the Group,
together with cash and cash equivalents. There are no trade receivables
therefore an ageing analysis has not been provided.
The carrying amounts of the Group's trade and other receivables are
denominated in the following currencies:
Group Company
2023 2022 2023 2022
£ £ £ £
UK Pounds 49,462 153,874 144,338 153,874
Euros 333,881 103,949 - -
US Dollars 942 1,062 - -
Current receivables 384,285 258,885 144,338 153,874
The maximum exposure to credit risk at the reporting date is the carrying
value of each class of receivable mentioned above. The Group does not hold any
collateral as security. All trade and other receivables are considered fully
recoverable and performing.
11. Cash and Cash Equivalents
Group Company
2023 2022 2023 2022
£ £ £ £
Cash at bank and in hand 683,974 2,356,225 247,539 1,639.776
The Group's cash is held with facilities with an A credit rating.
The carrying amounts of the Group and Company's cash and cash equivalents are
denominated in the following currencies:
Group Company
2023 2022 2023 2022
£ £ £ £
UK Pounds 244,487 1,623,713 246,744 1,623,713
Euros 436,805 720,508 370 4,059
US Dollars 2,682 1,992 425 1,992
Australian Dollars - 10,012 - 10,012
Cash at bank and in hand 683,974 2,356,225 247,539 1,639,776
12. Trade and Other Payables
Group Company
2023 2022 2023 2022
£ £ £ £
Trade payables 254,695 83,590 52,480 2,053
Other payables 31,029 8,799 9,717 4,217
Accrued expenses 60,014 158,599 54,817 65,245
345,738 250,988 117,014 71,515
All trade and other payables are due for payment within twelve months of the
year end. Trade payables are settled within normal commercial terms, usually
between 30-60 days.
The carrying amounts of the Group and Company's trade and other payables are
denominated in the following currencies:
Group Company
2023 2022 2023 2022
£ £ £ £
UK Pounds 117,014 69,270 117,014 71,515
Euros 228,724 144,053 - -
Current payables 345,738 213,323 117,014 71,515
13. Financial Instruments by Category
31 December 2023 31 December 2022
Group At amortised cost Total At amortised cost Total
Assets per Statement of Financial Position
Trade and other receivables (excluding prepayments) 343,244 371,981 127,471 127,471
Cash and cash equivalents 683,974 683,974 2,356,225 2,356,225
Total 1,027,218 1,055,955 2,483,696 2,483,696
Liabilities per Statement of Financial Position
Trade and other payables 345,738 345,738 250,988 250,988
Total 345,738 345,738 250,988 250,988
31 December 2023 31 December 2022
Company At amortised cost Total At amortised cost Total
Assets per Statement of Financial Position
Trade and other receivables (excluding prepayments) 103,297 103,297 114,995 114,995
Cash and cash equivalents 247,539 247,539 1,639,776 1,639,776
Total 350,836 350,836 1,754,771 1,754,771
Liabilities per Statement of Financial Position
Trade and other payables 117,014 117,014 71,515 71,515
Total 117,014 117,014 71,515 71,515
14. Share Capital and Share Premium
Issued share capital
Company Number of shares Ordinary shares Share premium Total
£ £ £
At 1 January 2022 244,570,118 73,371 633,765 707,136
Issue of new shares - 17 January 2022 47,036,500 14,111 3,748,809 3,762,920
Issue of new shares - 17 January 2022 900,000 270 71,730 72,000
Cost of Capital - 15 February 2022 - - (263,404) (263,404)
At 31 December 2022 292,506,618 87,752 4,190,900 4,278,652
At 1 January 2023 292,506,618 87,752 4,190,900 4,278,652
At 31 December 2023 292,506,618 87,752 4,190,900 4,278,652
15. Other reserves
Group Foreign currency translation differences Merger reserve Total
£ £ £
At 31 December 2021 (14,065) 170,248 156,183
Currency translation differences 75,158 - 75,158
Acquisition of subsidiaries - - -
As at 31 December 2022 61,093 170,248 231,341
Currency translation differences (11,853) - (11,853)
Acquisition of subsidiaries - - -
As at 31 December 2023 49,240 170,248 219,488
16. Earnings per Share
The calculation of the total basic loss per share of 0.557 pence (2022: 0.457
pence) is based on the loss attributable to equity owners of the group of
£1,628,705 (2022: £1,335,325) and on the weighted average number of ordinary
shares of 292,506,618 (2022: 292,506,618) in issue during the year.
In accordance with IAS 33, basic and diluted earnings per share are identical
as the effect of the exercise of share options or warrants would be to
decrease the loss per share.
17. Commitments
During the period, Genflow Biosciences Srl entered into various collaboration
agreements which contain commitments and milestone payments, as follows;
- Organips: Amounts payable of €75.000 in relation to the study of
cent SIRT9 in liver organoids (MASH and Werner).
- IVEX Labs; Amounts have been payable under the contact in place with
IVEX Labs in connection with the study of cloning mouse Sirt6 and human SIRT6
(both wild-type and centenarian variants) into AAV2 ("Task1"). A final payment
of €50,000 is payable on completion of the research, receipt of reports for
Tasks 1-2, a final report and other deliverables due.
- CSZBio; €10,240 payable per month over two years from June 2021.
18. Related Party Transactions
Group
During the year, £143,427 (2022: £990,135) was loaned by the Company to
Genflow Biosciences Srl and £Nil (2022: £Nil) was repaid. During the year,
£1,116,367 owing from Genflow Biosciences Srl was reassigned to Genflow
Biosciences Inc in return for cash consideration of £1. At the period end,
£64,944 is owing from Genflow Biosciences Srl.
Also during the year, £684,860 was loaned by the Company to Genflow
Biosciences Inc.
Company
During the period, the Company charged Genflow Biosciences Srl management fees
totalling £94,876 in respect of administration costs and salaries.
19. Ultimate Controlling Party
The Directors believe there to be no ultimate controlling party.
20. Events after the Reporting Date
On 18 January 2024, the Group was awarded two non-diluting and
non-reimbursable research grants by the Government of Wallonia in Belgium
which will total €1.55m.
On 4 April 2024, the Company raised £715,000 (before expenses) by way of a
placing and subscription of 57,200,000 new Ordinary Shares of 1.25 pence each.
(#_ftnref1)
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR UBRURSBUVRARRecent news on Genflow Biosciences
See all newsRCS - Genflow Biosciences - Key SIRT6 Patent Application
AnnouncementREG - Genflow Biosciences - Holding(s) in Company
AnnouncementREG - Genflow Biosciences - Share Subscription, Director's Dealing and Update
AnnouncementREG - Genflow Biosciences - Final Results
AnnouncementRCS - Genflow Biosciences - Launch of AI-Powered Partnership
Announcement