REG - GENinCode PLC - Final Results
17/05/2022 07:00
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RNS Number : 6665L GENinCode PLC 17 May 2022
GENinCode Plc
("GENinCode" or the "Company")
Final results
Oxford, UK. GENinCode Plc (LSE: AIM GENI), the predictive genetics company
focused on the prevention of cardiovascular disease (CVD), announces its
results for the twelve months ended 31 December 2021.
The 2021 financial year saw the Company accelerate its commercial expansion
programme, successfully complete its IPO and admission to the LSE: AIM market
and file its Pre-Submission for regulatory approval of its lead product Cardio
inCode® with the US FDA.
Operational and financial highlights
· Completion of IPO and admission to the LSE: AIM in July 2021 raising
gross proceeds of £17m
· Filing of FDA Pre-Submission for Cardio inCode® (Genetic Risk Score)
for the onset of cardiovascular disease with preparations underway for the
full regulatory submission
· Announcement of EVERSANA Life Science Services strategic
collaboration to act as US commercial services partner for introduction of
GENinCode products to the US market
· Completed Indiana University collaboration representing flagship
facilities in preparation for introduction of Cardio inCode® to US market
· Announcement of Royal Brompton and Harefield and Guys and St Thomas'
NHS foundation trust collaboration in CVD polygenic risk assessment and
preparations for launch of Lipid inCode® testing for familial
hypercholesterolemia
· Successful completion and publication of Lipid inCode® NHS clinical
study to improve diagnosis, turnaround time for testing of Familial
Hypercholesterolemia (FH) at reduced cost to the NHS
· Announcement of FH pilot with NE-AHSN (North East and Cumbria -
Academic Health Science Network) for implementation of Lipid inCode® with
NHS
· Full year revenues increased 20% to £1.2m (2020: £1.0m)
· Increased levels of investment in our commercialisation programme
giving rise to an operating loss of (£4.1m) (2020: loss of (£1.1m))
· Cash reserves of £14.6m at 31 December 2021 (2020: £2.0m)
Recent developments
The Company announces today:
· A collaboration with Kaiser Permanente, California to assess Cardio
inCode® for the polygenic risk assessment of CVD
· Commissioning of GENinCode US CLIA lab (Clinical Laboratory
Improvement Amendments) test facility in Irvine, California and appointment of
ResearchDx Inc as the Company's US CLIA partner
· Announcement of collaboration with BUPA Cromwell hospital, London for
use of the Lipid inCode® test for familial hypercholesterolemia (FH)
· Completion of first COVID-19 Thrombo inCode® evaluation study for
genetic predisposition to thrombosis - St Pau Hospital, Spain
Outlook for 2022
We will take commercial advantage of our clinically advanced genetic products
to scale the market opportunities open to us. We are focused on our US
regulatory and reimbursement submissions for Cardio inCode(®), a
first-in-class genetic risk assessment for CVD and we will accelerate
preparations for the US launch and reimbursement of our globally leading
familial hypercholesterolemia test Lipid inCode(®).
Over the remainder of the year, we expect to complete the following key
deliverables:
· Prepare final FDA regulatory submission for Cardio inCode(®)
with a view to gaining approval approximately six months following submission
· Based on the recent advances by CMS in local coverage
determination and private reimbursement for FH, prepare to commercially launch
Lipid inCode(®) in the US market
· Continue to strengthen our partnership with EVERSANA for product launch
preparations in the US market
· Set-up US CLIA lab for Cardio inCode(®) and prepare Lipid inCode(®) lab
diagnostic test (LDT) service offering
· Complete our first NHS implementation of Lipid inCode(®) to advance FH
testing with the NHS
· Commission our new UK lab operation and complete UKAS accreditation
submission for service delivery of Lipid inCode(®) to support the NHS
· Continue to build our EU partnerships and develop our ongoing
collaborative discussions with pharmaceutical companies
· Generate increased Year-on-Year revenue growth
· Publish first COVID-19 Thrombo inCode(®) evaluation study for genetic
predisposition to thrombosis
Matthew Walls, Chief Executive Officer of GENinCode Plc said: "We enjoyed a
productive 2021 with the successful completion of the IPO and £17m gross
fundraise, enabling the expansion of our commercial programme across our US,
UK and EU markets. 2022 has started well as we continue to deliver the plans
set out at the IPO and focus on the US product launches of Cardio inCode® for
cardiovascular disease preventative care and accelerate US launch plans for
Lipid inCode® for the management of Familial Hypercholesterolemia.
"We are working closely with our US collaborative partner, EVERSANA, on launch
planning and advancing our collaborations with Indiana University and Kaiser
Permanente. We continue to build constructive discussions with the FDA in
preparation for our regulatory filing for Cardio inCode®. In the UK, we have
successfully completed our NHS clinical study for Lipid inCode® (familial
hypercholesterolemia testing) and are now preparing our first NHS pilot
implementation with the North of England-AHSN. We anticipate continued revenue
growth over the 2022 financial year."
Analyst meeting
The Company will hold an analyst meeting 9:30 a.m. (BST) on Tuesday 17 May.
Matthew Walls, CEO and Paul Foulger, CFO will host an in-person analyst
meeting at the offices of Walbrook PR, 75 King William Street, London, EC4N
7BE to discuss the financial results and key topics including business
strategy, partnerships, regulatory and reimbursement processes.
Investor presentation details
The Company will also host a presentation for investors via the IMC platform
at 3pm on 17 May. The presentation is open to all existing and potential
shareholders. Questions can be submitted pre-event via your Investor Meet
Company dashboard up until 9am the day before the meeting or at any time
during the live presentation. To register for this, please use the following
link: https://www.investormeetcompany.com/genincode-plc/register-investor
(https://www.investormeetcompany.com/genincode-plc/register-investor)
For more information visit www.genincode.com (http://www.genincode.com)
GENinCode Plc www.genincode.com (http://www.genincode.com) or via Walbrook PR
Matthew Walls, CEO
Paul Foulger, CFO
Stifel Nicolaus Europe Limited (Nomad and Joint Broker) Tel: +44 (0)20 7710 7600
Alex Price / Ben Maddison / Richard Short
Cenkos Securities Plc (Joint Broker) Tel: +44 (0)20 7397 8900
Giles Balleny
Dale Bellis / Michael Johnson (Sales)
Walbrook PR Limited Tel: 020 7933 8780 or
Anna Dunphy / Louis Ashe-Jepson / Phillip Marriage genincode@walbrookpr.com
About GENinCode
GENinCode Plc is a UK based company specialising in genetic risk assessment of
cardiovascular disease. Cardiovascular disease is the leading cause of death
and disability worldwide.
GENinCode operates business units in the UK, in the United States through
GENinCode U.S. Inc and in Europe through GENinCode S.L.U.
GENinCode predictive technology provides patients and physicians with globally
leading preventative care and treatment strategies. GENinCode CE marked
invitro-diagnostic molecular tests combine clinical algorithms and
bioinformatics to provide advanced patient risk assessment to predict disease
onset.
About Cardiovascular Disease
Cardiovascular disease (CVD) is the leading cause of death globally, taking an
estimated 17.9 million lives each year. CVD is a group of disorders of the
heart and blood vessels and include coronary heart disease, cerebrovascular
disease, rheumatic heart disease and other conditions. More than four out of
five CVD deaths are due to heart attacks and strokes, and one third of these
deaths occur prematurely in people under 70 years of age.
The most important behavioural risk factors of heart disease and stroke are
unhealthy diet, physical inactivity, tobacco use and harmful use of alcohol.
The effects of behavioural risk factors may show up in individuals as raised
blood pressure, raised blood glucose, raised blood lipids, and overweight and
obesity. These "intermediate risks factors" can be measured in primary care
facilities and indicate an increased risk of heart attack, stroke, heart
failure and other complications.
Cessation of tobacco use, reduction of salt in the diet, eating more fruit and
vegetables, regular physical activity and avoiding harmful use of alcohol have
been shown to reduce the risk of cardiovascular disease. Health policies that
create conducive environments for making healthy choices affordable and
available are essential for motivating people to adopt and sustain healthy
behaviours.
Identifying those at highest risk of CVDs and ensuring they receive
appropriate treatment can prevent premature deaths. Access to noncommunicable
disease medicines and basic health technologies in all primary health care
facilities is essential to ensure that those in need receive treatment and
counselling.
CVD causes a quarter of all deaths in the UK and is the largest cause of
premature mortality in deprived areas and is the single biggest area where the
NHS can save lives over the next 10 years. CVD is largely preventable, through
lifestyle changes and a combination of public health and NHS action on smoking
and tobacco addiction, obesity, tackling alcohol misuse and food
reformulation.
Genetic risk assessment can help early detection and treatment of CVD to help
patients live longer, healthier lives. Many people are still living with
undetected, high-risk conditions such as high blood pressure, raised
cholesterol, and atrial fibrillation (AF). Progress continues in the NHS to
identify and diagnose people routinely knowing their 'ABC' (testing and
monitoring of AF, Blood pressure and Cholesterol) set out in the NHS 10 Year
plan.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S STATEMENT
On behalf of the Board, we are delighted to present the Preliminary report for
the twelve-month period ended 31 December 2021 for GENinCode Plc.
Following the successful admission of the Company to the LSE: AIM market in
July 2021, this statement provides a brief introduction to the Company, a
summary of progress over the past year, recent developments and the outlook
for the year ahead.
Introduction
GENinCode is engaged in the genetic risk assessment, prediction, and
prevention of cardiovascular disease (CVD). GENinCode products and technology
have been developed with the aim of prognosing and predicting the onset of CVD
to provide personalised treatment and improve patient outcomes.
CVD accounts for around 18 million deaths annually, representing approximately
31 per cent. of all deaths worldwide with the global cost of CVD estimated to
reach approximately $1.04 trillion by 2030.
CVD encompasses all conditions linked to the heart and blood vessels and is
currently the leading cause of death globally, with CVD commonly referred to
as a 'heart attack' or 'stroke'. Four out of five deaths related to CVD are a
result of heart attacks and strokes, and one third of these deaths occur
prematurely in people under the age of 70. There are approximately 550 million
people living with heart and circulatory diseases worldwide. This number has
been rising due to changing lifestyles, ageing, and a growing population and
improved survival rates from heart attacks and strokes.
In the US, CVD affects over 85 million people and accounts for more than
one-third of all deaths. Common characteristics which put individuals at risk
of CVD include raised blood pressure, high cholesterol levels, as well as
obesity, lack of exercise and the co-occurrence of other diseases such as
diabetes. Approximately 655,000 people in the US die from CVD each year, with
coronary artery disease and heart attacks the most common.
Multiple clinical studies have shown that an individual's genetic load
contributes between 40 to 50 per cent. to the development of CVD, highlighting
genetics as one of the most significant contributing factors to the onset of
cardiovascular disease.
The Company's product portfolio draws on advanced genomic precision testing
using polygenic (multiple-genes) technology, advanced molecular testing,
genotyping, sequencing, and AI bioinformatics. Through a simple blood or
saliva sample, the Company can analyse the genetic variants and medical
information associated with CVD to determine a patient's Genetic Risk Score
(GRS) which is used to assess a patient's cardiovascular risk.
The current standard of care for primary prevention and assessment of the risk
of CVD has been in use and largely unchanged for many years. The advent of our
polygenic risk assessment for CVD allows the identification and
reclassification of individuals traditionally categorised at 'low' or
'intermediate' risk who are at higher genetic risk of a CVD event than their
current risk assessment suggests. This enables earlier in life preventative
measures to be adopted to lower the future risk of a CVD event.
GENinCode has a strong clinical evidence base, granted intellectual property
portfolio and a vision to advance CVD risk assessment to more precisely align
therapeutic treatment and lifestyle choices to improve patient outcomes.
2021 Business review
In the results for the twelve months ending 31 December 2021, the Company saw
year-on-year revenue growth increase to £1.2m (2020 £1.0m) primarily from
its European business. The Company's key products are CE-Marked with Cardio
inCode(®), Thrombo inCode(®), Lipid inCode(®) and Sudd inCode(®)
generating the core product revenues. Following the IPO and admission to LSE:
AIM the Company commenced its expansion strategy in the US, UK and Europe
which are the key markets for growth.
Just prior to the IPO, we announced a strategic commercialisation agreement
with EVERSANA Life Sciences Services, LLC. EVERSANA act as the Company's US
commercial services provider for the launch, market access and distribution of
the Company's products. EVERSANA provides a broad range of commercial services
to the life sciences industry. Its integrated business solutions span all
stages of the product life cycle to deliver long-term, sustainable value for
patients, prescribers, channel partners and payors. EVERSANA has experience
across many commercialisation areas, in particular reimbursement, pricing
intelligence, market access and payor services. As such EVERSANA represents a
strong US commercial partner capable of accelerating our growth in the US
market.
We have announced collaborations with two leading US healthcare institutions,
Indiana University (IU) School of Medicine and Kaiser Permanente Department of
Research to assess the clinical utility and validation of our Cardio
inCode(®) product in preparation for FDA regulatory approval. Both
collaborations are focused on clinically advancing and validating the
introduction of our lead product Cardio inCode(®). IU is focused on assessing
the use of Cardio inCode(®) as a genetic risk enhancer for the onset of
atherosclerosis (ASCVD), whilst Kaiser Permanente is clinically evaluating
Cardio inCode(®) against its population health cohort for the prediction and
onset of CVD. We are also in advanced discussions with New York Presbyterian
(NYP) hospital group (which includes Weill Cornell and Columbia University
hospitals). NYP will undertake Cardio inCode(®) clinical utility studies in
the New York State primary care network of physicians. These three
institutions will be the flagship facilities and healthcare groups for the
initial adoption of Cardio inCode(®) in the US.
US Regulatory and Reimbursement
We progressed discussions with the FDA through 2021 and were invited to make a
pre-submission of the Cardio inCode(®) regulatory filing in December 2021. We
have subsequently held constructive discussions with the FDA for the full
regulatory filing and expect to complete this filing over the coming months.
In September 2021 the Centres for Medicare and Medicaid Services (CMS)
repealed the Medicare Coverage for Innovative Technologies (MCIT) ruling.
Resulting from this ruling we are now preparing clinical utility studies (and
accompanying healthcare economics) to underpin a reimbursement submission via
the MolDx(®) programme. The MolDx(®) submission will establish coverage,
pricing and reimbursement for Cardio inCode(®). We are also commencing
private payer discussions with health insurance providers. The MolDx(®)
programme works on behalf of CMS to administer Medicare claims via Medicare
Administrative Contractors (MACs). We expect to present our MolDx(®)
reimbursement submission early next year based on the completion of our
clinical utility studies with selected US partner healthcare institutions.
Following positive public health endorsement of Familial Hypercholesterolemia
(FH) by the Centers for Disease Control Office of Public Health Genomics (CDC)
and the inclusion of FH testing as a Tier 1 genomic application (i.e. the test
has a significant potential for positive impact on public health based on
available evidence-based guidelines and recommendations), we have accelerated
our plans and preparations for the US soft launch of Lipid inCode(®) later
this year. Our Lipid inCode(®) test and FH panel of genes is well-positioned
to receive Medicare coverage based on recent policies that have been put in
place that support genetic testing in cardiovascular disease.
Today we announce the completion of our partnership with ResearchDx, based in
Irvine, California for the commissioning of the GENinCode US CLIA lab. Our US
lab will be set-up and commissioned over the coming months to provide CLIA
certified product services initially focused on Cardio inCode(®) and Lipid
inCode(®). It is important to note that, once CLIA lab approval has been
granted, we will be able to begin generation of product to support our US
preparations for launch and meaningful revenue growth.
UK and Europe
In the UK, the NHS Long Term Plan 2019 identifies CVD as a clinical priority
and the single largest condition where lives can be saved over the next 10
years. The NHS Long Term Plan sets out to identify 25% of patients suffering
with Familial Hypercholesterolemia (FH) by 2024. FH affects approximately 1 in
200-250 people in the UK who are unable to effectively metabolise cholesterol
leading to the accelerated onset of CVD. GENinCode's UK strategy is focused on
advancing our Lipid inCode(®) test to help support the NHS meet this plan.
During the year we announced our collaboration with Royal Brompton and
Harefield hospitals to provide CVD clinical genetic testing. RB&H is part
of Guy's and St Thomas' NHS Foundation Trust, the largest specialist heart and
lung centre in England and one of the largest in Europe.
More recently we have announced the successful completion of our NHS clinical
study for FH to deliver improved diagnosis and risk assessment and a faster
turnaround of test results at a lower cost to the NHS. We have recently
commenced a clinical pilot with the NE-AHSN (North East and Cumbria - Academic
Health Science Network) the centre of excellence for UK FH testing with a view
to supporting the North of England meet its NHS targets.
Today we also announce a collaborative agreement with BUPA Cromwell Hospital
for Lipid inCode(®) testing for FH. This will allow UK private patients to
receive genetic testing for FH from the BUPA Cromwell hospital based in West
London. This agreement represents the start of UK private patient revenue
generation for Lipid inCode(®)(.)
In Europe, the Company continues to build its business and evidence based
polygenic product profile and has announced sales and distribution
arrangements with Longwood Diagnostics S.L. and Synlab Diagnostics S.A.U. to
support its expansion in Spain. We are preparing Cardio inCode(®) for
piloting for public health CVD risk assessment in the Spanish regions and
expanding our sales team and collaborative partners in Italy and France.
Following the European outbreak of the COVID-19 pandemic in northern Spain and
Italy we have undertaken a number of clinical studies to assess the severity
of onset of COVID-19 to patients with a genetic predisposition to thrombosis
using our Thrombo inCode(®) product. The first of these studies based at
Hospital St Pau, Barcelona has now completed its findings and we expect to
present this publication over the coming months.
Intellectual Property
We maintain an ongoing intellectual property programme to strengthen our
existing patent portfolio and advance examinations across our family of
patents for Cardio inCode(®) and Thrombo inCode(®). We continue to build our
intellectual property portfolio and are actively evaluating in-licensing
opportunities as appropriate to enhance our competitive product positioning.
Financial review
The first half of 2021 was dominated by preparation for admission of the
Company to the LSE:AIM, which was successfully completed on 22nd July 2021.
The company raised £17.0 million (gross) before expenses. The proceeds are
being used to accelerate our commercial programme in the US, EU, and the UK.
Despite last year's challenges of the COVID-19 pandemic, our EU business held
up well to report revenues of £1.2m (2020 £1.0m) for the full year. Gross
profit for the year was £593k (2020: £523k) with a margin of 52% (2020: 54%)
respectively.
Administrative expenses increased to £4.0m (2020: £1.6m). The year-on-year
cost increase reflecting a first half growth in staffing and professional
costs as the company prepared for admission to LSE:AIM with the second half
ramp up in US investment following the completion of the EVERSANA partnership
with spending focused on regulatory, reimbursement and market assessment
preparations.
The increased commercial investment gave rise to an operating loss for the
year of (£4.1m) (2020: (£1.1m)), with the cash position at the end of
December 2021 £14.6m (2020: 2.0m).
Capital structure
Following the listing on LSE: AIM the total number of ordinary shares in issue
was 95,816,866. The loss per share for the year ending 31 December 2021 was
8.05p/share. The Board of Directors will not be recommending a dividend
payment for the year ended 31 December 2021.
Outlook
We will take commercial advantage of our clinically advanced genetic products
to scale the market opportunities open to us. We are focused on our US
regulatory and reimbursement submissions for Cardio inCode(®), a
first-in-class genetic risk assessment for CVD and we will accelerate
preparations for the US launch and reimbursement of our globally leading
familial hypercholesterolemia test Lipid inCode(®).
Over the remainder of the year, we expect to complete the following key
deliverables:
· Prepare final FDA regulatory submission for Cardio inCode(®)
with a view to gaining approval approximately six months following submission
· Based on the recent advances by CMS in local coverage
determination and private reimbursement for FH, prepare to commercially launch
Lipid inCode(®) in the US market
· Continue to strengthen our partnership with EVERSANA for product
launch preparations in the US market
· Set-up US CLIA lab for Cardio inCode(®) and prepare Lipid
inCode(®) lab diagnostic test (LDT) service offering
· Complete our first NHS implementation of Lipid inCode(®) to
advance FH testing with the NHS
· Commission our new UK lab operation and complete UKAS
accreditation submission for service delivery of Lipid inCode(®) to support
the NHS
· Continue to build our EU partnerships and develop our ongoing
collaborative discussions with pharmaceutical companies
· Generate increased Year-on-Year revenue
growth
· Publish first COVID-19 Thrombo inCode(®) evaluation study for
genetic predisposition to thrombosis
We have a strong and growing clinical evidence base built on studies amassed
over the past 12 years to more precisely identify patients at risk of CVD and
thereby enable improved preventative care.
We continue to increase investment in our manpower resource and expertise as
well as exploring other acquisition opportunities to take advantage of the
growth opportunities open to us.
Despite the world market challenges and volatility, the Board believes our
products and technology will deliver significant investor returns and we would
like to thank our investors, Board, management and employees for their
strength and determination in driving our business growth.
We look forward to updating our investors on our forthcoming progress.
Matthew
Walls
William Rhodes
Chief Executive
Officer
Chairman
16 May
2022
16 May 2022
CFO STATEMENT
2021 2020
£'000 £'000
Revenue 1,154 961
Gross Profit 593 523
Gross Profit % 51.4% 54.4%
Operating Loss (4,146) (1,050)
Cash and cash equivalents 14,554 2,003
Total Equity 13,718 1,859
Operating Results
Sales increased by £193,311 or 20.1% from £960,801 in 2020 to £1,154,112 in
2021 and operating loss increased by £3,096,267 from (£1,050,004) in 2020 to
(£4,146,271) in 2021.
Top 5 Geographic Markets
2021 2020
£'000 % £'000 %
Spain 1,001 86% 817 85%
Italy 95 8% 11 12%
France 32 3% 21 2%
Germany 9 1% 0 0%
ROW 17 2% 12 1%
Total 1,154 961
The gross margin decreased from 54.4% to 51.4%, largely as a result of the
product mix but also due to pricing pressure from the Company's preferred
laboratory service provider in Girona.
Administrative Expenses
2021 2020
£'000 £'000
Salaries and social security and benefits in kind 1,677 722
Royalty expense 55 47
Audit and accounting 49 36
US Commercialisation, launch preparation, market assessment, marketing 1,257 -
resources, and regulatory
Rent, Utilities, Comms, and IT 202 128
Travel and entertainment 76 52
Legal, Professional, and Consultancy 447 369
Marketing & Market Access 134 79
Sundry 122 117
Total Administrative expenses 4,019 1,550
The number of employees and directors increased from 16 (14 in Spain and 2 in
the UK) at 31 December 2020 to 28 (19 in Spain, 8 in the UK, and 1 in the US)
at 31 December 2021, as the Group strengthened its management team, increased
its regulatory resources, and put in place a laboratory team in London in
preparation for the commercial launch of Lipid inCode(®) in 2022. This has
resulted in salaries and associated costs increasing from £721,851 to
£1,677,348 during the period.
In June 2021, the Company entered into a Product Commercialisation Agreement
with Eversana Life Sciences L.L.C., whereby EVERSANA would act as the
Company's commercial services provider for the launch, market access, and
distribution logistics for the Company's products in the USA. The cost of US
commercialisation fees in 2021, mainly payable to EVERSANA, amounted to
£1,257,138.
Legal, Professional, and Consultancy fees increased from £368,961 in 2020 to
£446,999 in 2021, mainly as a result of the extra operational expenses
associated with being on the AIM market (broker fees, nomad fees, Financial PR
fees, Registrar fees, AIM fees etc). Additionally, the Company has increased
the size of the Clinical Advisory Board, both in the UK and the US.
Adjusted EBITDA
2021 2020
£'000 £'000
Operating Loss (4,146) (1,050)
Add Back:
Depreciation & Amortisation 35 23
Loss on disposal of fixed assets 19
Share Based Costs 73 -
Listing Costs 584 -
Non-recurring Expenditure 9 -
Adjusted EBITDA (3,426) (1,027)
Intangible amortisation charges in 2021 were £28,922 compared to a charge of
£20,876 in 2020; this increase is in line with the rise in capitalised patent
cost activity during the year. Depreciation charges in 2021 were £5,794
compared to a charge of £1,898 in 2020; again, this increase is commensurate
with the increased property, plant and equipment purchases in the year, due to
the increased headcount and associated investment since the IPO during the
period.
Share Options were granted to directors, employees, and certain advisors in
April 2021, hence for the first time, under IFRS 2 the Company is required to
recognise share based payment awards in the financial statements based on fair
value when the awards are received, which is determined at the grant date for
share-based payments. The charge for the year amounted to £72,906 and was
calculated using the Black-Scholes model.
Successful completion of an IPO and admission to the LSE:AIM took place in
July 2021; costs associated with the IPO amounted to £1,727,666. Of this
amount, £583,669 was charged to the Income Statement and £1,143,997 was
netted off against the share premium.
Non-recurring expenditure of £9,051 was incurred by our Spanish office in
2021 and represented previously capitalised development costs written off to
the Income Statement in the period.
Taxation
2021 2020
£'000 £'000
Income Tax 6 116
As highlighted in note 8 to the Consolidated Financial Statements, although
the expected tax credit at the UK corporation tax rate of 19% increased from
(£199,488) in 2020 to (£786,028) in 2021, a large movement in the
unrecognised deferred tax asset balance has resulted in a charge of £826,075
to the Income Statement in the period in accordance with IAS 12 Income Taxes,
leading to a net charge of £6,071.
The UK budget announced on 3 March 2021 an increase in the main corporation
tax rate from 19% to 25% on profits over £250,000 with effect from 1 April
2023. Due to the nature of the business and uncertainty of profit generation
the rate has not been reflected in the consolidated financial statements.
Other comprehensive income
Included in other comprehensive income are the net exchange differences on
translation of foreign operations. The gain on translation of £72,000 in 2021
compares to a gain in 2020 of £440.
The gain in both years arises predominantly due to the strengthening of the
GBP against the Euro. A significant proportion of the Group's operations are
based in Spain and with the strengthening of GBP in 2021 from an opening rate
of £1:Eur1.12 to a closing rate at the end of 2021 of £1:Eur1.16, this
movement was the main reason for the gain in the period.
Assets and Liabilities
Non-Current Assets
Intangible assets have increased from £139,486 at 31 December 2020 to
£192,602 at 31 December 2021 as the Company continues to further build its
intellectual property portfolio.
Property, plant and equipment has risen from £11,129 at 31 December 2020 to
£46,265 at 31 December 2021 due to laboratory equipment purchases at the
Company's lab premises in London.
Current Assets
The Company holds very little in the way of finished goods and work in
progress, largely because around 60% of its revenues originate from genomic
service testing, as well as the fact that the kits are mainly ordered and then
delivered directly from kit manufacturer/supplier to customer.
Trade and Other Receivables have increased from £248,589 at 31 December 2020
to £398,827 at 31 December 2021, predominantly due a higher level of
prepayments as a result of expenditure for the following period having been
invoiced by suppliers before the period end.
Liabilities
Trade and Other Payables increased from £563,495 at 31 December 2020 to
£1,485,857 at 31 December 2021, split across non-current liabilities and
current liabilities; this rise is mainly due to the nature of the payment
structure set out in the agreement with our US commercialisation partner,
EVERSANA.
Cash flow and working capital
Operating cash outflow increased from (£1,037,781) in 2020 to (£3,023,388)
in 2021.The increase is largely explained by the drop-through of increased
operating losses, offset by a reduction in net working capital, largely as a
result of increased payables balances at 31 December 2021.
Net cash flows used in investing activities increased from (£68,273) in 2020
to (£145,436) in 2021, reflecting increased patent expenditure and laboratory
equipment in the UK.
Net cash flows from financing activities increased from £3,026,142 in 2020 to
£15,855,983 in 2021. In 2020, a private fundraise was carried out, comprising
two institutional investors and a small number of private investors. In July
2021, the Company announced admission to trading on AIM together with a
successful fundraise for gross proceeds of £17m before expenses.
As a result of the above activities there was an overall increase in cash and
cash equivalents of £12,551,005 from £2,003,072 at 31 December 2020 to
£14,554,077 at 31 December 2021.
………………………………
Paul Foulger
Chief Financial Officer
16 May 2022
Consolidated Statement of
Profit or Loss and Other Comprehensive Income
for the Year Ended 31 December 2021
Notes 2021 2020
£'000 £'000
CONTINUING OPERATIONS
Revenue 4 1,154 961
Cost of sales (561) (438)
GROSS PROFIT 593 523
Administrative expenses (4,019) (1,550)
ADJUSTED EBITDA (3,426) (1,027)
Depreciation (6) (2)
Amortisation (29) (21)
Loss on disposal of fixed assets (19)
Share based costs (73) -
Listing costs (584) -
Non-recurring expenditure (9) -
OPERATING LOSS (4,146) (1,050)
Other income 7 10 -
LOSS BEFORE INCOME TAX 5 (4,136) (1,050)
Income tax 8 (6) (116)
LOSS FOR THE FINANCIAL PERIOD (4,142) (1,166)
Other comprehensive income for the year
Exchange differences on translation of foreign operations 72 -
LOSS ATTRIBUTABLE TO EQUITY SHAREHOLDERS OF THE COMPANY (4,070) (1,166)
EARNINGS PER SHARE
Basic earnings per share (pence) (8.05) (12.71)
Diluted earnings per share (pence) (8.05) (12.71)
The notes form part of these financial statements
Consolidated Statement of Financial Position
31 December 2021
2021 2020
Notes £'000 £'000
ASSETS
NON-CURRENT ASSETS
Intangible assets 12 193 140
Property, plant and equipment 13 46 11
239 151
CURRENT ASSETS
Inventories 14 14 18
Trade and other receivables 15 399 248
Cash and cash equivalents 17 14,554 2,003
Financial assets 16 4 2
14,971 2,271
TOTAL ASSETS 15,210 2,422
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 20 958 114
Share premium 21 15,551 3,318
Other reserves 21 73 -
Retained earnings 21 (2,864) (1,573)
TOTAL EQUITY 13,718 1,859
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 18 661 -
CURRENT LIABILITIES
Trade and other payables 18 825 563
Deferred Tax 19 6 -
TOTAL LIABILITIES 1,492 563
TOTAL EQUITY AND LIABILITIES 15,210 2,422
The financial statements were approved by the Board of Directors on 16 May
2022 and were signed on its behalf by:
..........................................................
Paul Foulger
Director
16 May 2022
The notes form part of these financial statements
Company Statement of Financial Position
31 December 2021
2021 2020
Notes £'000 £'000
ASSETS
NON-CURRENT ASSETS
Investments 11 31 2
Intangible assets 12 179 101
Property, plant, and equipment 13 32 -
Trade and other receivables 15 2,791
3,033 103
CURRENT ASSETS
Trade and other receivables 15 168 1,116
Cash and cash equivalents 17 14,243 1,892
14,411 3,008
TOTAL ASSETS 17,444 3,111
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 20 958 114
Share premium 21 15,551 3,318
Share based payment reserve 21 73 -
Retained earnings 21 493 (429)
TOTAL EQUITY 17,075 3,003
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 18 363 108
Deferred Tax 19 6 -
TOTAL LIABILITIES 369 108
TOTAL EQUITY AND LIABILITIES 17,444 3,111
As permitted by Section 408 of the Companies Act 2006, the income statement of
the parent company is not presented as part of these financial statements.
The parent company's loss for the financial year was £1,856,657 (2020 - loss
of £364,036).
The financial statements were approved by the Board of Directors on 16 May
2022 and were signed on its behalf by:
..........................................................
Paul Foulger
Director
16 May 2022
The notes form part of these financial statements
GENinCode Plc
Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2021
Called up Share Share based
share premium payment Retained Total
capital account reserve earnings equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 January 2020 67 - (408) (341)
Changes in equity
Issue of share capital 47 3,318 - - 3,365
Total comprehensive income - - - (1,165) (1,165)
Balance at 31 December 2020 114 3,318 - (1,573) 1,859
Changes in equity
Reduction of share premium - (2,779) - 2,779 -
Bonus share issue 458 (458) - - -
Issue of share capital 386 16,614 - - 17,000
Costs of share issue - (1,144) - - (1,144)
Share based payments - - 73 - 73
Total comprehensive income - - - (4,070) (4,070)
Rounding - - - -
Balance at 31 December 2021 958 15,551 73 (2,864) 13,718
The notes form part of these financial statements
GENinCode Plc
Company Statement of Changes in Equity
for the Year Ended 31 December 2021
Called up Share
share premium Other Retained Total
capital account reserves earnings equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 January 2020 - - (65) (65)
Changes in equity
Issue of share capital 114 3,318 - - 3,432
Total comprehensive income - - - (364) (364)
Balance at 31 December 2020 114 3,318 - (429) 3,003
Changes in equity
Reduction of share premium - (2,779) - 2,779 -
Bonus share issue 458 (458) - - -
Issue of share capital 386 16,614 - - 17,000
Costs of share issue - (1,144) - - (1,144)
Share based payments - - 73 73
Total comprehensive income - - - (1,857) (1,857)
Balance at 31 December 2021 958 15,551 73 493 17,075
The notes form part of these financial statements
GENinCode Plc
Consolidated Statement of Cash Flows
for the Year Ended 31 December 2021
2021 2020
£'000 £'000
Cash flows from operating activities
Loss before taxation (4,137) (1,050)
Adjustments for:
Foreign exchange loss/(gain) 136 -
Depreciation and amortisation 35 23
Loss on disposal 19 -
Share based payments 73 -
Movement in translation/retranslation 70
Taxation 6 -
Operating loss before working capital changes (3,798) (1,027)
Cash used in operations
Decrease / (Increase) in trade and other receivables (150) 42
(Decrease) / Increase in trade and other payables 922 (35)
Decrease / (Increase) in inventory 4 (18)
(Increase) in financial assets (2) -
Net cash outflow from operating activities (3,024) (1,038)
Investing activities
Purchase of property, plant, and equipment (41) (5)
Purchase of intangible assets (104) (63)
Net cash flows used in investing activities (145) (68)
Financing activities
Issue of ordinary shares (net of issue expenses) 15,856 3,026
Net cash flows from financing activities 15,856 3,026
Net change in cash and cash equivalents 12,687 1,920
Cash and cash equivalents at the beginning of the period 2,003 85
Exchange (losses) on cash and cash equivalents (136) (2)
Cash and cash equivalents at the end of the period 14,554 2,003
The notes form part of these financial statements
GENinCode Plc
Company Statement of Cash Flows
for the Year Ended 31 December 2021
2021 2020
£'000 £'000
Cash flows from operating activities
(Loss) for the year (1,857) (364)
Adjustments for:
Foreign exchange loss/(gain) 136 11
Amortisation 120 7
Other income (22) -
Share based payments 73
Taxation 6 -
Operating loss before working capital changes (1,644) (346)
Changes in working capital
(Increase) in trade and other receivables (73) (90)
Increase/(decrease) in trade and other payables 254 (376)
Interest receivable 22 (14)
Net cash outflow from operating activities (1,441) (826)
Investing activities
Acquisition of subsidiary (28) -
Purchase of intangible assets (95) (53)
Purchase of tangible assets (35) -
Net cash flows used in investing activities (158) (53)
Financing activities
Loans issued to subsidiary undertakings (1,770) (607)
Proceeds from issue of share capital 15,856 3,365
Net cash flows from financing activities 14,086 2,758
Net change in cash and cash equivalents 12,487 1,878
Exchange (losses)/gains on cash and cash equivalents (136) (10)
Cash and cash equivalents at the beginning of the year 1,892 24
Cash and cash equivalents at the end of the year 14,243 1,892
The notes form part of these financial statements
GENinCode Plc
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2021
1. Statutory information
GENinCode Plc is a public limited company, registered in England and Wales.
The Company's registered number and registered office address can be found on
the General Information page.
The Group's principal activity is the development and commercialisation of
clinical genetic tests, to provide predictive analysis of risk to a patient's
health based on their genes.
The consolidated financial statements comprised of the Company and its
subsidiaries (together referred to as "the Group") as at and for the year
ended 31 December 2021. The parent Company financial statements present
information about the Company as a separate entity and not about its Group.
2. Accounting policies
Basis of preparation
The consolidated financial statements of the Group have been prepared using
the historical cost convention, on a going concern basis and in accordance
with UK-adopted international accounting standards ("IFRS") and the Companies
Act 2006 applicable to companies reporting under IFRS, using accounting
policies which are set out below and which have been consistently applied to
all years presented, unless otherwise stated.
On 31 December 2020 IFRS as adopted by the European Union were brought into UK
law and became UK-adopted international accounting standards with future
changes being subject to endorsement by the UK Endorsement Board.
The financial statements of the Company have been prepared in accordance with
Financial Reporting Standard 101 "Reduced Disclosure Framework" ('FRS 101')
and the requirements of the Companies Act 2006. The Company will continue to
prepare its financial statements in accordance with FRS 101 on an ongoing
basis until such time as it notifies shareholders of any change to its chosen
accounting framework.
In accordance with FRS 101, the Company has taken advantage of the following
exemptions:
• Requirements of IAS 24, 'Related Party Disclosures' to disclose related
party transactions entered into between two or more members of a group;
• the requirements of paragraphs 134(d) to 134(f) and 135(c) to 135(e) of
IAS 36 Impairments of Assets;
• the requirements of IFRS 7 Financial Instruments: Disclosures;
• the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A,
40B, 40C, 40D and 111 of IAS 1 Presentation of Financial Statements;
• the requirements of paragraphs 134 to 136 of IAS 1 Presentation of
Financial Statements;
• the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors.
New and amended standards adopted by the Group
The most significant new standards and interpretations adopted, none of which
are considered material to the Group, are as follows:
Ref Title Summary Application date of standards (periods commencing)
IFRS9, IAS39 and IFRS7 Interest Rate Benchmark Reform Phase 2 Amendments regarding measurement and classification 1 January 2021
IFRS 17 Insurance contracts 1 January 2021
IFRS 4 Amendments to Insurance Contracts - deferral of IFRS 9 (issued on 25 June 1 January 2021
2020)
New standards and interpretations not yet adopted
Unless material the Group does not adopt new accounting standards and
interpretations which have been published and that are not mandatory for 31
December 2021 reporting periods.
No new standards or interpretations issued by the International Accounting
Standards Board ('IASB') or the IFRS Interpretations Committee ('IFRIC') have
led to any material changes in the Company's accounting policies or
disclosures during each reporting period.
The most significant new standards and interpretations to be adopted in the
future are as follows:
Ref Title Summary Application date of standards (periods commencing)
IAS1 Presentation of Financial Statements Amendments regarding the classification of liabilities 1 January 2023
Amendments to defer effective date of the January 2020 amendments 1 January 2023
Going concern
The financial statements have been prepared on the assumption that the Group
is a going concern. When assessing the foreseeable future, the Directors have
considered detailed budgets and forecasts for the next 12 months from the date
of this report and the cash at bank available as at the date of approval of
this report and are satisfied that the Group should be able to meet its
financial obligations.
The Group holds surplus cash reserves following the placing on admission to
AIM and based on current and expected expenditure has enough reserves to
operate for the foreseeable future.
The Group has an ongoing commitment to keep costs and working capital under
control so that increasing gross profits can drive positive cash flows.
Detailed sensitivity analysis has been performed to assess the potential
impact on the Group's liquidity caused by delays in revenue growth against
expected levels along with potential mitigating actions which can be taken to
safeguard the Group's cash position. These include working capital controls
and reductions in discretionary spending. These sensitivities include the
expected continued impact of the COVID-19 pandemic, although to mitigate its
potential negative impacts the Group is developing its own COVID-19 severity
and prognosis stratification product.
Basis of consolidation
Subsidiaries are all entities which the Group has control. The subsidiaries
consolidated in these Group accounts were acquired via group re-organisation
and as such merger accounting principles have been applied. The subsidiaries'
financial figures are included for their entire financial year rather than
from the date the company took control of them.
Inter-company transactions, balances, and unrealised gains on transactions
between Group companies are eliminated during the consolidation process.
The subsidiaries prepare their accounts to 31 December under FRS101; there are
no deviations from the accounting standards implemented by the company. Where
necessary accounting policies of subsidiaries have been changed to ensure
consistency with the policies adopted by the Group.
Property, plant, and equipment
Depreciation is provided at the following annual rates in order to write off
each asset over its estimated useful life.
Depreciation is provided to write off cost, less estimated residual values, of
all property, plant, and equipment, except for investment properties and
freehold land, evenly over their expected useful lives, calculated at the
following rates:
Plant
12%
Equipment
25%
The carrying value of the property, plant and equipment is compared to the
higher of value in use and the fair value less costs to sell. If the carrying
value exceeds the higher of the value in use and fair value less the costs to
sell the asset, then the asset is impaired, and its value reduced by
recognising an impairment provision.
Intangible assets
(i) Patents and licenses costs
The Group has purchased patents and licences since incorporation. The costs
incurred in obtaining these patents and licenses have been capitalised.
Amortisation is charged as follows:
Patents
Over estimated economic life of 10 years
Licences
20% (estimated useful life of 5 years)
The Patents and license costs are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be
recoverable.
(ii) Software costs
The Group has purchased software since incorporation. The costs incurred in
obtaining the software have been capitalised as the Group uses the software
platform to provide results to its customers.
Amortisation is charged on a straight-line basis at 25% over the useful life
of the related asset. Software costs are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount may not
be recoverable.
Foreign currency
The functional currency of the Company is Sterling Pound (£) and its
subsidiaries are in Euros (€) and US Dollars ($). The presentational
currency of the Company is £.
Transactions entered by the Group's entities in a currency other than the
reporting currency are recorded at the rates ruling when the transactions
occur. Foreign currency monetary assets and liabilities are translated at the
rates ruling at the statement of financial position date. Exchange differences
arising on the re-translation of outstanding monetary assets and liabilities
are also recognised in the income statement.
The exchange rates used in the financial statements are as follows:
2021 2020
Sterling/euro exchange rates
Average exchange rate for the period 1.163 1.245
Exchange rate at the period end 1.190 1.105
Sterling/US dollar exchange rates
Average exchange rate for the period 1.375 n/a
Exchange rate at the period end 1.331 n/a
Revenue recognition
Revenue is recognised in accordance with the requirements of IFRS 15 'Revenue
from Contracts with Customers'. The Company recognises revenue to depict the
transfer of promised goods and services to customers in an amount that
reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services. Revenue is determined to be at the point
of despatch of the product or service unless there are specific provisions in
the relevant contract. Revenue from the provision of testing and reporting
services is recognised upon delivery of the report to the customer. Invoices
are typically raised upon delivery of the products or reporting services,
unless there is a different contractual requirement, for payment according to
credit terms.
Operating leases
Rentals payable under operating leases are charged against the statement of
comprehensive income on a straight-line basis over the lease term.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call,
together with other short term highly liquid investments which are not subject
to significant changes in value and have original maturities of less than
three months.
Equity
Equity comprises the following:
· Share capital: the nominal value of equity shares.
· Retained deficit: losses accumulated to the end of the
period.
· Share premium: excess subscribed above nominal value.
Equity instruments
The Group subsequently measures all equity investments at fair value. Where
the Group's management has elected to present fair value gains and losses on
equity investments in OCI, there is no subsequent reclassification of fair
value gains and losses to profit or loss following the derecognition of the
investment. Dividends from such investments continue to be recognised in
profit or loss as other income when the Group's right to receive payments is
established. Changes in the fair value of financial assets at FVPL are
recognised in other gains/(losses) in the statement of profit or loss as
applicable. Impairment losses (and reversal of impairment losses) on equity
investments measured at FVOCI are not reported separately from other changes
in fair value.
Taxation
Current taxes are based on the results shown in the financial statements and
are calculated according to local tax rules, using tax rates enacted or
substantially enacted by the statement of financial position date.
Employee benefits
(i) Short-term benefits
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary
benefits are accrued in the period in which the associated services are
rendered by employees of the Company.
Employee benefit costs
The Group operates a defined contribution pension scheme. Contributions
payable to the Group's pension scheme are charged to the income statement in
the period to which they relate.
Share based payment
The fair value of equity-settled share-based payments to employees is
determined at the date of grant and expensed on a straight line basis over the
vesting period based on the Group's estimate of shares or options that will
eventually vest.
All equity-settled share-based payments are ultimately recognised as an
expense in the profit or loss with a corresponding credit to the Share based
payment reserve. If vesting periods or other non-market vesting conditions
apply, the expense is allocated over the vesting period, based on the best
available estimate of the number of share options expected to vest. Estimates
are subsequently revised if there is any indication that the number of share
options expected to vest differs from previous estimates. Any cumulative
adjustment prior to vesting is recognised in the current period. No adjustment
is made to any expense recognised in prior periods if share options ultimately
exercised are different to that estimated on vesting.
Share options granted to employees of subsidiaries are recognised as an
expense in the employing subsidiary and as an addition to the investment in
the subsidiary for the parent company. The costs are calculated on the same
basis as above and are included upon consolidation.
Upon exercise of share options, the proceeds received net of attributable
transaction costs are credited to share capital, and where appropriate share
premium.
Financial
instruments
IFRS 9 requires an entity to address the classification, measurement and
recognition of financial assets and liabilities.
a) Classification
The Group classifies its financial assets in the following measurement
categories:
• those to be measured subsequently at fair value (either
through OCI or through profit or loss); and
• those to be measured at amortised cost.
The classification depends on the Group's business model for managing the
financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will be recorded either in
profit or loss or in OCI. For investments in equity instruments that are not
held for trading, this will depend on whether the Group has made an
irrevocable election at the time of initial recognition to account for the
equity investment at fair value through other comprehensive income (FVOCI).
The Group classifies financial assets as amortised costs only if both of the
following criteria are met:
• the asset is held within a business model whose objective is
to collect contractual cash flows; and
• the contractual terms give rise to cash flows that are
solely payment of principal and interest.
b) Recognition
Purchases and sales of financial assets are recognised on trade date (that is,
the date on which the Group commits to purchase or sell the asset). Financial
assets are de-recognised when the rights to receive cash flows from the
financial assets have expired or have been transferred and the Group has
transferred substantially all the risks and rewards of ownership.
c) Measurement
At initial recognition, the Group measures a financial asset at its fair value
plus, in the case of a financial asset not at fair value through profit or
loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset.
Transaction costs of financial assets carried at FVPL are expensed in profit
or loss.
Debt instruments
Amortised cost: Assets that are held for collection of contractual cash flows,
where those cash flows represent solely payments of principal and interest,
are measured at amortised cost. Interest income from these financial assets is
included in finance income using the effective interest rate method. Any gain
or loss arising on derecognition is recognised directly in profit or loss and
presented in other gains/(losses) together with foreign exchange gains and
losses. Impairment losses are presented as a separate line item in the
statement of profit or loss.
d) Impairment
The Group assesses, on a forward-looking basis, the expected credit losses
associated with any debt instruments carried at amortised cost. The impairment
methodology applied depends on whether there has been a significant increase
in credit risk. For trade receivables, the Group applies the simplified
approach permitted by IFRS 9, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
Taxation
Current and deferred tax is charged or credited in profit or loss, except when
it relates to items charged or credited directly to equity, in which case the
related tax is also dealt with in equity. Current tax is calculated on the
basis of the tax laws enacted or substantively enacted at the reporting date
in the countries where the Company and its subsidiaries operate.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are generally recognised for all
deductible temporary differences to the extent that it is probable that
taxable profits will be available against which those deductible temporary
differences can be utilised, except for differences arising on investments in
subsidiaries where the Group is able to control the timing of the reversal of
the difference and it is probable that the difference will not reverse in the
foreseeable future.
Recognition of the deferred tax assets is restricted to those instances where
it is probable that a taxable profit will be available against which the
difference can be utilised.
Deferred tax is calculated based on rates enacted or substantively enacted at
the reporting date and expected to apply when the related deferred tax asset
is realised, or liability settled.
Critical accounting estimates and judgements
The preparation of financial information in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires the Directors
to exercise their judgement in the process of applying the accounting policies
which are detailed above. These judgements are continually evaluated by the
Directors and management and are based on historical experience and other
factors, including expectations of future events that are believed to be
reasonable under the circumstances.
The key estimates and underlying assumptions concerning the future and other
key sources of estimation uncertainty at the statement of financial position
date, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial period
are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision
affects only that period, or in the period of the revision and future periods
if the revision affects both current and future periods.
The estimates and judgements which have a significant risk of causing a
material adjustment to the carrying amount of assets and liabilities within
the next financial year are discussed below:
• Intangible assets
The assessment of the future economic benefits generated by these separately
identifiable intangible assets and the determination of its amortisation
profile involve a significant degree of judgement based on management
estimation of future potential revenue and profit and the useful life of the
assets. Reviews are performed regularly to ensure the recoverability of these
intangible assets.
• Share based payments
The Company has issued share options as an incentive to certain senior
management. The fair value of options granted is recognised as an expense with
a corresponding credit to the share-based payment reserve. The fair value is
measured at grant date and spread over the period during which the awards
vest.
For equity-settled share-based payment transactions, the goods or services
received and the corresponding increase in equity are measured directly at the
fair value of the goods or services received, unless that fair value cannot be
estimated reliably. If it is not possible to estimate reliably the fair value
of the goods or services received, the fair value of the equity instruments
granted as calculated using the Black-Scholes model is used as a proxy.
The fair value of share-based payments is measured by use of valuation models,
which take into account conditions attached to the vesting and exercise of the
equity instruments. The expected life used in the model is adjusted; based on
management's best estimate, for the effects of non-transferability, exercise
restrictions and behavioural considerations. The share price volatility
percentage factor used in the calculation is based on historical share price
performance of a group of peer companies as historical share price performance
was not available for the Company on the date of grant.
4. Operating segments
The Group has disaggregated revenue into various categories in the following
table which is intended to depict how the nature, amount, timing and
uncertainty of revenue and cash flows are affected by economic date.
2021 2020
£ £
Revenue from sale of kits and provision of support services 1,154 961
Primary Geographic Markets
Chile 8 7
France 32 21
Italy 95 111
Sweden 4 -
Mexico - 1
Peru 6 4
Spain 1,001 817
Germany 8 -
Total revenue per geographical markets 1,154 961
5. Loss from operations
2021 2020
£'000 £'000
Loss is stated after charging:
Cost of inventory 561 438
Staff costs 868 385
Social security 224 111
Royalty expense 55 47
Operating expenses - External services 1,354 740
Directors salaries and fees 586 226
Depreciation and amortisation 35 23
5a. Auditor's remuneration
2021 2020
£ £
Fees payable to the company's auditor for the audit of the company's annual 25 9
accounts
Fees payable to the company's auditor and its associates for other services:
Accounts compilation - 7
Accounting and taxation services 36 20
Total 61 36
7. Finance income
2021 2020
£'000 £'000
Bank interest income 8 -
Other revenue 2 -
Total 10 -
8. Income tax
2021 2020
£'000 £'000
Current tax credit
GENinCode S.L.U. - (116)
Total current tax - (116)
Deferred tax
Accelerated capital allowances 6 -
Total current tax 6 -
Total 6 (116)
The charge for the year can be reconciled to the loss in the consolidated
statement of comprehensive income as follows:
2021 2020
£'000 £'000
(4,137) (1,050)
Expected tax credit at the UK corporation tax rate of 19% (786) (200)
Movement in unrecognised deferred tax asset 826 (79)
Permanent differences - (30)
Spanish deferred tax recognised in excess of UK deferred tax (45) 193
Expenses disallowed for tax 5 -
Accelerated Capital Allowances (6) -
Total (6) (116)
Factors affecting current and future taxation
Unrelieved tax losses carried forward have not been recognised as a deferred
tax asset as there is currently insufficient evidence that the asset will be
recoverable in the foreseeable future.
The UK budget announced on 3 March 2021 confirm an increase in the main
corporation tax rate from 19% to 25% on profits over £250,000 with effect
from 1 April 2023. Due to the nature of the business and uncertainty of
profit generation the rate has not been reflected in the consolidated
financial statements.
10. Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period.
Diluted earnings per share is calculated using the weighted average number of
shares adjusted to assume the conversion of all dilutive potential ordinary
shares.
Reconciliations are set out below.
2021
Earnings Weighted average number of shares Per-share amount
£'000 pence
Basic EPS
Earnings attributable to ordinary shareholders (4,070) 50,552,205 (8.05)
Effect of dilutive securities - - -
Diluted EPS
Adjusted earnings (4,070) 50,522,205 (8.05)
2020
Earnings Weighted average number of shares Per-share amount
£'000 pence
Basic EPS
Earnings attributable to ordinary shareholders (1,166) 9,170,609 (12.71)
Effect of dilutive securities - - -
Diluted EPS
Adjusted earnings (1,166) 9,170,609 (12.71)
The Company has options issued over 8,059,500 (2020, nil) ordinary shares.
Due to the losses incurred from continuing operations in the years reported,
there is no dilutive effect from the existing share options.
The weighted average for 2020 assumes the sub-division of shares per Note 20
were in place from 1 January 2020.
15. Trade and other receivables
Group
2021 2020
£'000 £'000
Trade receivables 234 240
Other receivables 31 1
Prepayments 134 7
Total 399 248
Company
2021 2020
£'000 £'000
NON-CURRENT
Intercompany receivables 2,791 -
Total 2,791 -
CURRENT
Intercompany receivables - 1,020
Trade receivables 60 65
Other receivables 31 31
Prepayments 77 -
Total 168 1,116
General terms for settlement of debt with clients are 30 days from the date of
invoice for private entities and 60 days with public entities.
The carrying value of trade and other receivables classified at amortised cost
approximates fair value.
17. Cash and cash equivalents
Group
2021 2020
£'000 £'000
Total 14,554 2,003
Company
2021 2020
£'000 £'000
Total 14,243 1,892
Where cash at bank earns interest, interest accrues at floating rates based on
daily bank deposit rates.
The fair value of the cash & cash equivalent is as disclosed above. For
the purpose of the cash flow statement, cash and cash equivalents comprise of
the amounts shown above.
18. Trade and other payables
Group
2021 2020
£'000 £'000
NON-CURRENT
Trade payables 661 -
Total 661 -
CURRENT
Trade payables 345 193
Accruals 243 63
Tax payable 100 131
Other payables 137 177
Total 825 564
Company
2021 2020
£'000 £'000
Trade payables 100 82
Accruals 238 26
Tax payable 21 -
Other payables 4 -
Total 363 108
General terms for settlement of debt are 60 days in general, after the invoice
has been remitted from supplier.
The carrying value of trade and other payables classified at amortised cost
approximates fair value.
20. Share capital
2021 2020
£'000 £'000
114,361 Ordinary Shares of £1.00 each 114
95,816,866 Ordinary shares of £0.01 958
Total 958 114
· On 9 July 2021 the company subdivided 382,295 £1.00 Ordinary
shares into 38,229,500 £0.01 Ordinary shares and 189,510 £1.00 B Ordinary
shares into 18,951,000 £0.01 B Ordinary shares.
· On 9 July 2021 the company amalgamated the Ordinary and B
Ordinary shares together as Ordinary shares.
· On 12 July 2021 the company issued 457,444 ordinary shares via a
bonus share issue for 44p.
· On 22 July 2021 the company issued 386,364 ordinary shares via an
Initial Public Offering for 44p.
· All shares of the Company rank pari passu in all respects.
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