REG - GENinCode PLC - Final Results
06/06/2023 07:00
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RNS Number : 7211B GENinCode PLC 06 June 2023
GENinCode Plc
("GENinCode" or the "Company")
Final results
Oxford, UK. GENinCode Plc (LSE:AIM GENI), the genetics company focused on the
prevention of cardiovascular disease (CVD), announces its audited final
results for the twelve months ended 31 December 2022. The 2022 financial year
saw the Company accelerate its commercial expansion programme in the US, UK
and Europe and the Company is now preparing to launch its first clinical
diagnostic and risk assessment tests into the US market with its Early Access
Programs.
Operational and financial highlights
· Preparation for US launch of LIPID inCode® for the diagnosis of
familial hypercholesterolemia ("FH") and CARDIO inCode® for the genetic risk
of coronary heart disease.
· Improving US market conditions set by American Heart Association for
the introduction of polygenic testing for coronary heart disease and
reimbursement coverage for LIPID inCode®.
· Final preparations ongoing for filing FDA 510K submission for Cardio
inCode® (kit format) for the onset of cardiovascular disease ("CVD").
· NHS adoption of LIPID inCode® for FH diagnosis in the North of England
to deliver comprehensive testing, improved turnaround times at reduced
cost.
· CARDIO inCode® pilot launched in Extremadura, Spain.
· Acquisition of Risk of Ovarian Cancer Algorithm (ROCA) test for women at
high risk of ovarian cancer. Awaiting completion of review by National
Institute for Health and Care Excellence (NICE) as part of new guidance
development.
· Full year revenues £1.4m (2021: £1.2m).
· Increased levels of investment in the commercialisation programme
giving rise to a reported adjusted EBITDA loss of (£5.6m) (2021: loss of
(£3.4m)).
· Cash reserves of £9.7m at 31 December 2022 (2021: £14.6m).
Post-period end highlights
· California state licensing approval and CLIA certification received for
provision of LIPID inCode® and CARDIO inCode® test services from the
Company's laboratory based in Irvine, California.
· CPT PLA coding granted from the American Medical Association for CARDIO
inCode®
· Announcement of LIPID inCode® collaboration with University Clinic
Dresden, Germany for primary care diagnosis of FH and risk assessment of CVD.
· Presentation by Kaiser Permanente on the use of CARDIO inCode® for the
polygenic risk assessment of CVD at European Society of Cardiology Annual
Meeting in August 2023 in Amsterdam.
Matthew Walls, Chief Executive Officer of GENinCode Plc said: "We are starting
to commercially advance our polygenic tests in the US and UK which together
with our growing EU business and strengthening clinical evidence will enable
us to rapidly scale our business. We remain firmly focused on our US product
launch and first US revenues, broadening our NHS commercial relationship and
expansion across our EU business. We will drive revenue growth whilst
maintaining a tight operational cost base to target breakeven over the medium
term, de-risking our business model whilst offering significant growth
potential."
Investor meeting
The Company will also host a presentation for investors via the IMC platform
2pm BST on Thursday, 8 June. 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, 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)
Enquiries:
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 genincode@walbrookpr.com
(mailto:genincode@walbrookpr.com)
Anna Dunphy / Phillip Marriage / Louis Ashe-Jepson
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, Europe through GENinCode S.L.U.,
and in the United States through GENinCode U.S. Inc.
GENinCode predictive technology provides patients and physicians with globally
leading preventive 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.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S STATEMENT
2022 Business review
In the preliminary results for the twelve months ending 31 December 2022, the
Company saw a year-on-year revenue increase to £1.4m (2021: £1.2m) primarily
from growth in our European business. The Company's key products include:
CARDIO inCode(®) - Genetic risk assessment of coronary heart disease
LIPID inCode(®) - Genetic diagnosis and management of familial (inherited)
hypercholesterolemia
THROMBO inCode(®) - Genetic diagnosis and risk assessment of thrombophilia
and thrombotic risk
SUDD inCode(®) - Genetic diagnosis and cause of sudden cardiac death and
familial heart disease
The Company is now starting commercial expansion programmes in the US and UK
to complement its European revenue growth.
US Business
The past year has seen significant advances in US genetic healthcare policy
with a milestone statement by American Heart Association (AHA) on the
importance of Polygenic Risk Scores for the future risk assessment of
cardiovascular disease. We are now preparing our Early Access Program (EAP)
discussions for the launch of LIPID inCode(®) and CARDIO inCode-Score(®) in
the US with a select group of leading healthcare institutions from which we
expect to see clinical adoption.
Recent public health developments announced by the US Centres for Disease
Control to identify individuals suffering with familial hypercholesterolemia
(FH) have escalated the disease area to a 'Tier 1' public health status.
Resulting from this increased focus on FH and existing reimbursement coding
for FH diagnosis, we have accelerated the commissioning and validation of
LIPID inCode(®) for the US market.
Over the year the Company commissioned its US diagnostic lab and applied for
and received California State Licensing approval and subsequently CLIA
(Clinical Laboratory Improvement Amendments) regulatory approval for our
dedicated US laboratory based in Irvine, California. CLIA approval enables the
Company to start selling its lab diagnostic tests in the US market. The
dedicated CLIA lab also enables greater control, efficiency over our supply
chain alongside improved gross margins from our operations. Both CARDIO
inCode-Score(®) and LIPID inCode(®) are now preparing for commercial launch.
Following the US Food and Drug Administration (FDA) Pre-Submission for the
CARDIO inCode(®) test kit for coronary heart disease, we have continued
productive discussions with the FDA for the preparation and regulatory filing
of our final 510K kit submission. Analytical work to complete the filing has
been extensive and time consuming. We are nearing completion of this programme
and expect to file our 510K over the coming weeks. We anticipate a six-month
review period with the FDA prior to expected approval later this year. The
approval of the 510K 'kit format' will complement our existing lab diagnostic
test services and will extend sales across other CLIA labs in the US market.
At the end of the year, we bolstered the GENinCode US sales team and are now
preparing to 'soft launch' the LIPID inCODE(®) and CARDIO inCode(®) Early
Access Programs (EAPs). The EAPs will enable selected institutions and KOL
physicians to access these products on a 'free of charge' basis in return for
market feedback. We expect these programs to lead to the start of first US
test revenues.
During the year we also commenced collaborations with Indiana University (IU)
School of Medicine, the largest US medical school, in preparation for the
introduction of CARDIO inCode(®) to the US market and expanded our
collaboration with Kaiser Permanente, California, to assess CARDIO inCode(®)
for the polygenic risk assessment of CVD. We anticipate strong clinical
utility results from both the IU and Kaiser Permanente collaborations with
business updates expected over the coming months. ( )
UK and Europe Business
In the UK NHS, we successfully completed and published our first LIPID
inCode(®) NHS clinical study to improve diagnosis and turnaround time for
testing of Familial Hypercholesterolemia (FH) at reduced cost to the NHS.
Following the NHS publication, we announced the implementation of LIPID
inCode(®) with the North East and Cumbria - Academic Health Science Network
(NENC-AHSN) and more recently our first major commercial programme to support
the NHS 10-Year plan to identify 25% of those individuals in the UK suffering
with FH. The LIPID inCode(®) implementation represents the first commercial
polygenic CVD risk test to be adopted by the NHS. During the year we also
announced a collaboration with BUPA Cromwell Hospital, London, for use of our
LIPID inCode(®) test leading to our first UK product revenues.
Aligned with our UK growth, we commissioned our new UK lab based in
Hammersmith, London.
We have also recently announced our collaboration with MVZ Uniklinikum labs in
Dresden, Germany. Uniklinikum represent the largest treatment centre in
Germany for patients suffering with hypercholesterolemia and the German team
will follow a similar pathway to the NHS with state-based reimbursement for
our initial LIPID inCode(®) test.
In Spain, we announced the first CARDIO inCode(®) pilot implementation study
in the Spanish region of Extremadura. The Extremadura region has a population
of c.1m, with an estimated 50,000 individuals at risk of a cardiovascular
event, including heart attack. CARDIO inCode(®) is expected to change
clinical practice by identifying those individuals at high genetic risk and
improve preventative treatment. Successful completion of the pilot in over 500
individuals will lead to the extension of the programme across the Extremadura
region.
We also completed our first THROMBO inCode(®) COVID-19 evaluation study for
patients with a genetic predisposition to thrombosis at St Pau Hospital,
Spain. We are continuing to clinically assess the impact of thrombosis in the
escalation of severe COVID-19 where it is conveniently aligned with our
existing strategy.
In October, we announced the acquisition of the entire issued share capital
of Abcodia Limited, Cambridge, and its Risk of Ovarian Cancer Algorithm (ROCA)
test and technology. Unique in its field, and based on growing published
clinical evidence, the ROCA test represents a breakthrough for the early
detection of familial ovarian cancer in BRCA+ genetically predisposed women.
The clinical and economic benefits of the ROCA test are under review by NICE
as part of new guidance development for this cohort of women, and through
additional industry partnerships, the test is poised to engage commercially,
initially in the UK.
Intellectual Property
We maintain an ongoing intellectual property programme to strengthen our
existing patent portfolio and are advancing our family of patents for both
CARDIO inCode(®) and THROMBO inCode(®). We will continue to build our
intellectual property portfolio and actively evaluate in-licensing and
acquisition opportunities as appropriate to enhance our competitive product
positioning.
Financial review
Following the admission of the Company to the AIM market in July 2021 and the
£15.3m net funds raised, we have delivered our commercial programme for the
US, UK and EU markets whilst maintaining tight control over spending. This
approach has enabled us to meet our business plans whilst retaining strong
cash reserves in a weakening financial market.
Our EU business reported revenues of £1.4m (2021 £1.2m) for the full year.
Gross profit for the year was £632k (2021: £593k) with a margin of 44%
(2021: 51%). The reduced margin reflecting the increased (largely
inflationary) material and service costs over the year.
Administrative expenses increased to £6.3m (2021: £4.0m). The year-on-year
cost increase reflecting growth in staffing and professional costs with the
ramp up in US and UK investment in preparation for our US and UK laboratory
services, increased sales and marketing resource with spending primarily
focused on market access and launch preparations.
This increased commercial investment gave rise to an adjusted EBITDA loss for
the year of (£5.6m) (2021: (£3.4m)), with the cash position at the end of
December 2022 being £9.7m (2021: £14.6m).
Capital structure
The total number of ordinary shares in issue was 95,816,866. The loss per
share for the year ending 31 December 2022 was 6.2p/share. The Board of
Directors will not be recommending a dividend payment for the year ended 31
December 2022.
Outlook
We will continue to take commercial advantage of our product developments and
strong clinical evidence to scale the market opportunities now emerging. We
are focused on our US launch, generating our first US revenues, the
development of our NHS relationships and expansion in the EU. Given the
challenging markets, we are driving revenue growth whilst maintaining a tight
operational cost base to target a breakeven/profit position over the medium
term. This will enable us to de-risk our business model whilst delivering
strong growth as our products come to market in the US, alongside UK and EU
growth.
During 2023, we expect to complete the following key deliverables:
· Launch of LIPID inCode(®) and CARDIO inCode(®) Early Access
Programs in the US market to generate first US revenues
· Finalisation and filing of 510K regulatory submission for CARDIO
inCode(®) (kit format) to accelerate US sales
· Expand NHS programme for LIPID inCode(®) and introduce CARDIO
inCode(®)
· Expand the MVZ Uniklinikum, Germany collaborative program and menu of
products
· Build our EU partnerships and develop our ongoing collaborative
discussions with pharmaceutical companies
· Strengthen the commercial, marketing and selling teams to support US
revenue growth
We are now preparing launch plans in the US to complement our UK and EU
revenue growth.
We have a strong and growing competitive clinical advantage to identify
patients at genetic risk of coronary heart disease to improve preventive care
in the largest global disease area with highest level of mortality.
Commensurate with growth we will build investment in our international
manpower resource and expertise as well as exploring other acquisition
opportunities to take advantage of the growth opportunities open to us.
We continue to strengthen our business and believe our tests are industry
leading and will deliver significant investor returns. We would like to thank
our investors, Board, management and employees for their strength and
determination in helping support and drive our business growth.
We look forward to updating our investors on our forthcoming progress.
Matthew Walls William
Rhodes
Chief Executive Officer Chairman
5 June 2023 5
June 2023
GENinCode Plc
Consolidated Statement of Comprehensive Income
for the Year Ended 31 December 2022
2022 2021
£'000 £'000
CONTINUING OPERATIONS
Revenue 1,430 1,154
Cost of sales (798) (561)
GROSS PROFIT 632 593
Administrative expenses (6,266) (4,019)
ADJUSTED EBITDA (5,634) (3,426)
Depreciation (104) (6)
Amortisation (59) (29)
Loss on disposal of fixed assets - (19)
Share based payment expense (102) (73)
Listing costs - (584)
Non-recurring expenditure - (9)
OPERATING LOSS (5,899) (4,146)
Other income 173 10
Finance charge (20) -
LOSS BEFORE INCOME TAX (5,746) (4,136)
Income tax 187 (6)
LOSS FOR THE FINANCIAL YEAR (5,559) (4,142)
Other comprehensive income for the year
Items that are or may be subsequently reclassified to the profit and loss:
Exchange differences on translation of foreign operations (361) 72
LOSS ATTRIBUTABLE TO EQUITY SHAREHOLDERS OF THE COMPANY (5,920) (4,070)
EARNINGS PER SHARE
Basic earnings per share (pence) (6.18) (8.05)
Diluted earnings per share (pence) (6.18) (8.05)
GENinCode Plc (Registered number: 11556598)
Consolidated Statement of Financial Position
31 December 2022
2022 2021
£'000 £'000
ASSETS
NON-CURRENT ASSETS
Intangible assets 161 193
Property, plant and equipment 653 46
Right of use asset 349 -
Goodwill 149 -
1,312 239
CURRENT ASSETS
Inventories 20 14
Trade and other receivables 717 399
Cash and cash equivalents 9,732 14,554
Financial assets 16 4
10,485 14,971
TOTAL ASSETS 11,797 15,210
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 958 958
Share premium 15,551 15,551
Foreign currency translation reserve (289) 72
Share based payment reserve 175 73
Retained earnings (8,495) (2,936)
TOTAL EQUITY 7,900 13,718
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 1,434 661
Lease liability 285 -
CURRENT LIABILITIES
Trade and other payables 2,078 825
Lease liability 69 -
Deferred Tax 31 6
TOTAL LIABILITIES 3,897 1,492
TOTAL EQUITY AND LIABILITIES 11,797 15,210
GENinCode Plc (Registered number: 11556598)
Company Statement of Financial Position
31 December 2022
2022 2021
£'000 £'000
ASSETS
NON-CURRENT ASSETS
Investments 221 31
Intangible assets 159 179
Property, plant, and equipment 164 32
Right of use asset 349 -
Trade and other receivables 5,668 2,791
6,561 3,033
CURRENT ASSETS
Trade and other receivables 531 168
Cash and cash equivalents 9,468 14,243
9,999 14,411
TOTAL ASSETS 16,560 17,444
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 958 958
Share premium 15,551 15,551
Share based payment reserve 175 73
Retained earnings (1,413) 493
TOTAL EQUITY 15,271 17,075
LIABILITIES
NON-CURRENT LIABILITIES
Contingent consideration provision 155 -
Lease liability 285 -
CURRENT LIABILITIES
Trade and other payables 749 363
Lease liability 69 -
Deferred Tax 31 6
TOTAL LIABILITIES 1,289 369
TOTAL EQUITY AND LIABILITIES 16,560 17,444
GENinCode Plc
Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2022
Foreign
Called up Share Currency Share based
share premium Translation payment Retained Total
capital account Reserve reserve earnings equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2021 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
Profit or loss - - - - (4,142) (4,142)
Foreign exchange on translation - - 72 - - 72
Balance at 31 December 2021 958 15,551 72 73 (2,936) 13,718
Changes in equity
Share based payments - - - 102 - 102
Profit or loss - - - - (5,559) (5,559)
Foreign exchange on translation - - (361) - - (361)
Balance at 31 December 2022 958 15,551 (289) 175 (8,495) 7,900
GENinCode Plc
Company Statement of Changes in Equity
for the Year Ended 31 December 2022
Called up Share
share premium Other Retained Total
capital account reserves earnings equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 January 2021 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
Profit or loss - - - (1,857) (1,857)
Balance at 31 December 2021 958 15,551 73 493 17,075
Changes in equity
Share based payments - - 102 - 102
Profit or loss - - - (1,906) (1,906)
Balance at 31 December 2022 958 15,551 175 (1,413) 15,271
GENinCode Plc
Consolidated Statement of Cash Flows
for the Year Ended 31 December 2022
2022 2021
£'000 £'000
Cash flows from operating activities
Loss before taxation (5,745) (4,137)
Adjustments for:
Foreign exchange loss/(gain) (197) 136
Depreciation and amortisation 163 35
Loss on disposal - 19
Share based payments 102 73
Finance charges 19 -
Taxation - 6
Operating loss before working capital changes (5,658) (3,868)
Cash used in operations
Decrease / (Increase) in trade and other receivables (106) (150)
(Decrease) / Increase in trade and other payables 2,022 922
Decrease / (Increase) in inventory (6) 4
Decrease / (Increase) in financial assets (13) (2)
Net cash outflow from operating activities (3,762) (3,094)
Investing activities
Purchase of property, plant, and equipment (700) (41)
Purchase of intangible assets (149) (104)
Net cash flows used in investing activities (849) (145)
Financing activities
Movement in lease liability (47) -
Issue of ordinary shares (net of issue expenses) - 15,856
Net cash flows from financing activities (47) 15,856
Net change in cash and cash equivalents (4,658) 12,617
Cash and cash equivalents at the beginning of the year 14,554 2,003
Exchange gains / (losses) on cash and cash equivalents 197 (136)
Movement in retranslation (361) 70
Cash and cash equivalents at the end of the year 9,732 14,554
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2022
1. Statutory information
GENinCode Plc is a public limited company, limited by shares, 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 2022. 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.
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.
• the requirements of IAS 7 to prepare a Statement of Cash Flows.
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)
IFRS 3 Conceptual Framework for Financial Reporting (Amendments to IFRS 3) 1 January 2022
IAS 37 IAS 37 Provisions, Contingent Liabilities and Contingent Assets (Amendment - Specifying which costs an entity includes in determining the cost of 1 January 2022
Onerous Contracts - Cost of Fulfilling a Contract) fulfilling a contract for the purposes of assessing whether the contract is
onerous.
IAS 16 IAS 16 Property, Plant and Equipment (Amendment - Proceeds before Intended Prohibits a company deducting amounts received from selling items produced 1 January 2022
Use) while the company is preparing assets for it's intended use from the cost of
PPE.
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 2022 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
IAS 8 Definition of Accounting Estimates Defines accounting estimates and clarifies that the effects of a change in an 1 January 2023
input or measurement technique are changes in accounting estimates.
IAS 12 Deferred Tax relating to Assets and liabilities arising from a Single Additional criterion for the initial recognition exemption under IAS 12.15, 1 January 2023
Transaction (Amendments to IAS 12) whereby the exemption does not apply to the initial recognition of an asset or
liability which at the time of the transaction, gives rise to equal taxable
and deductible temporary differences.
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 in 2021. Based on current and expected expenditure the Group will require
additional funding in order to progress the expansion plans within the next 12
months. There is a chance that the process of raising additional funds will
not be successful and if this were the case, 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. Given these actions and combined with the continued progress of the
underlying positive development of the general business activities, the board
is convinced the Company and Group have sufficient cash flows for operations
for the coming 12 months period.
Given that the outcome of the proposed fund raise cannot be predicted, this
indicates the existence of a material uncertainty which may cast significant
doubt about the Group's ability to continue as a going concern. The
financial statements do not include the adjustments that would result if the
Group was unable to continue as a going concern.
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, except for the
acquisition of Abcodia Limited in September 2022. The subsidiaries' financial
figures are included for their entire financial year rather than from the date
the company took control of them, with the exception of Abcodia Limited which
was acquired during the year.
Inter-company transactions, balances, and unrealised gains on transactions
between Group companies are eliminated during the consolidation process.
GENinCode Plc prepares its 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.
The Company acquired its 100% interest in Abcodia Ltd in September 2022. The
results of subsidiaries acquired during the year are included from the
effective date of acquisition. Where necessary, adjustments are made in
results of subsidiaries to bring the accounting policies used into line with
those used 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:
2022 2021
Sterling/euro exchange rates
Average exchange rate for the year 1.173 1.163
Exchange rate at the year end 1.128 1.190
Sterling/US dollar exchange rates
Average exchange rate for the year 1.237 1.375
Exchange rate at the year end 1.210 1.331
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.
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 year.
· 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 year 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 year to which they relate.
Research and development expenditure
Expenditure on research activity is recognised as an expense in the year in
which it is incurred.
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.
Leased assets
The Group recognises a right of use asset and a lease liability at the lease
commencement date. The right of use asset is initially measured at cost, which
comprises of the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle and remove the underlying
asset or to restore the underlying asset or to restore the underlying asset or
the site on which it is located, less any lease incentives received.
The right of use asset is subsequently depreciated using the commencement date
to the end of the lease term.
The lease liability is initially measured at the present value of the lease
payments that are paid at the commencement date, discounted using the Group's
incremental borrowing rate.
The lease liability is measured at amortised cost using the effective interest
method. It is re-measured when there is a change in future lease payments
arising from a change in an index or rate, or if the group changes its
assessment of whether it will exercise a purchase, extension or termination
option.
The Group has elected not to recognise right of use assets and lease
liabilities for short term leases that have a lease term of 12 months or less
and leases of low value assets. The Group recognises the lease payments
associated with these leases as an expense on a straight-line basis over the
lease term.
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.
The entity will recognise a financial liability in its statement of financial
position when it becomes party to the contractual provisions of the
instrument. At initial recognition, the entity measures a financial liability
at its fair value plus or minus, in the case of a financial liability not at
fair value through profit or loss, transaction costs that are directly
attributable to the acquisition or issue of the financial liability.
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.
Financial instruments (cont)
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.
Goodwill
Goodwill arising in a business combination is recognised as an asset at the
date control is acquired (the acquisition date). Goodwill arising on the
acquisition of a subsidiary undertaking is the difference between the fair
value of the consideration payable and the fair value of the identifiable
assets, liabilities and contingent liabilities acquired.
Goodwill is not amortised but is reviewed for impairment at least annually or
more frequently if there is an indication that goodwill may be impaired. If
the recoverable amount is less than the carrying amount, the carrying amount
of the asset is reduced to its recoverable amount. An impairment loss is
recognised as an expense immediately.
On disposal of a subsidiary, the attributable amount of goodwill is included
in the determination of the profit or loss on disposal.
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 year are
reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the year in which the estimate is revised if the revision affects only that
year, or in the years of the revision and future periods if the revision
affects both current and future years.
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 year 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.
• Contingent consideration
Contingent consideration is a financial liability recorded at fair
value (note 22). The amount of contingent consideration to be paid is based
on the occurrence of future events, such as the achievement of certain
development, regulatory and sales milestones. Accordingly, the estimate of
fair value contains uncertainties as it involves judgment about the likelihood
and timing of achieving these milestones as well as the discount rate used.
Changes in fair value of the contingent consideration obligation result from
changes to the assumptions used to estimate the probability of success for
each milestone, the anticipated timing of achieving the milestones and the
discount period and rate to be applied. A change in any of these assumptions
could produce a different fair value, which could have a material impact on
the results from operations.
· Acquisition
On the acquisition of a company or business, a determination of the fair value
and the useful lives of tangible and intangible assets acquired is performed,
which requires the application of judgement. Future events could cause the
assumptions used by the Group to change which could have an impact on the
results and net position of the Group.
Critical accounting estimates and judgements (cont.)
· Leases
The application of IFRS 16 requires the Group to make judgments that affect
the valuation of the lease liabilities and the valuation of right-of-use
assets (note 23). These include: determining contracts in scope of IFRS 16,
determining the contract term and determining the interest rate used for
discounting of future cash flows.
The lease term determined by the Group generally comprises non-cancellable
period of lease contracts, periods covered by an option to extend the lease if
the Group is reasonably certain to exercise that option and periods covered by
an option to terminate the lease if the Group is reasonably certain not to
exercise that option. The same term is applied as the economic useful life of
right-of-use assets.
The present value of the lease payment is determined using the discount rate
representing the base rate of 4.5%, plus a margin of 3% for general lending,
giving a raise to a discount rate of 7.5%.
Management have assessed each lease liability for recognition under IFRS16 and
recognised a right of use asset where appropriate (note 23). The right of
use asset is amortised in line with the term of the lease. Amortisation is
on a straight line basis over 5 years with discount rate 7.5% as above.
· Carrying value of inter- company debtors
Management uses their judgement to assess the recoverability and value of
intercompany debts, the Company has funded its subsidiaries (note 15) to
assist with their growth. Management consider all of the intercompany debts
to be fully recoverable but in their judgement this will be in more than one
year from the year end.
3. Financial risk management
The Group's risk management is controlled by the board of directors. The
board identifies, evaluates, and mitigates financial risks across the Group.
Financial risks identified and how these risks could affect the Group's
future financial performance are listed below;
Financial instruments by category
Financial assets 2022 2021
£'000 £'000
Cash and cash equivalents 9,732 14,554
Trade receivables 315 234
Financial assets 16 4
Other receivables 37 -
Financial assets 10,100 14,792
Financial liabilities 2022 2021
£'000 £'000
Trade payables 2,694 1,006
Other payables 70 -
Accruals 432 243
Lease liability 354 -
Trade and other payables 3,550 1,249
Financial liabilities at amortised costs 3,550 1,249
Fair value hierarchy
All the financial assets and financial liabilities recognised in the financial
statements which are short-term in nature are shown at the carrying value
which also approximates the fair values of those short-term financial
instruments. Therefore, no separate disclosure for fair value hierarchy is
required for them. The disclosure on fair value hierarchy does not apply to
the financial leases.
The Group's activities expose it to a variety of financial risks, mainly
credit risk, liquidity risk and interest rate risk.
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. In order to
minimise this risk the Group endeavours only to deal with companies which are
demonstrably creditworthy.
The aggregate financial exposure is continuously monitored. The maximum
exposure to credit risk is the value of the outstanding amount of bank
balances. The Group's exposure to credit risk on cash and cash equivalents is
considered low as the bank accounts are with banks with high credit ratings.
Liquidity risk
The Group currently holds cash balances to provide funding for normal activity
and is managed centrally. Trade and other payables are monitored as part of
normal management routine.
Interest rate risk
The Group's interest-bearing assets comprise of only cash and cash
equivalents. As the Group's interest-bearing assets do not generate
significant amounts of interest, changes in market interest rates do not have
any significant direct effect on its income.
The maturity of borrowings and other financial liabilities (representing
undiscounted contractual cash-flows) is as follows:
2021 Within 1 Year
£'000
Trade and Other Payables 345
Total 345
Over 1 Year
Trade and Other Payables 661
661
2022 Within 1 Year
£'000
Trade and Other Payables 1,486
Lease liability 69
Total 1,555
Over 1 Year
Trade and Other Payables 1,278
Lease liability 285
1,563
Capital risk management
The Group's capital management objectives are to ensure the Group's ability to
continue as a going concern, and provide an adequate return to shareholders by
pricing products and services commensurate with the level of risk.
To meet these objectives, the Company reviews the budgets and forecasts on a
regular basis to ensure there is sufficient capital to meet the needs of the
Company through to profitability and positive cash flow.
All working capital requirements are financed from existing cash resources.
4. Operating segments
There is only one operating segment. The Group has disaggregated revenue into
various geographic regions in the following table.
2022 2021
£'000 £'000
Revenue from sale of kits and provision of support services 1,430 1,154
Primary Geographic Markets
Chile 6 8
France 36 32
Italy 132 95
Sweden 1 4
Mexico 6 -
Peru 6 6
Spain 1,207 1,001
Germany - 8
United Kingdom 36 -
Total revenue per geographical markets 1,430 1,154
5. Loss from operations
2022 2021
£'000 £'000
Loss is stated after charging:
Cost of inventory 798 561
Staff costs 1,221 868
Social security 373 224
Royalty expense 67 55
Operating expenses-- External services 1,983 1,354
Directors' salaries and fees 650 586
Research and development expenditure 72 1
Depreciation and amortisation 163 35
5a. Auditor's remuneration
2022 2021
£'000 £'000
Fees payable to the company's auditor for the audit of the company's annual 25 25
accounts
Fees payable to the company's auditor and its associates for other services:
Accounting and taxation services 4 36
Total 29 61
6. Employees and directors
The average number of employees (including directors) in the Group during the
year was made up as follows:
2022 2021
Number Number
Directors (including non-executive directors) 7 6
Employees 28 20
Total 35 26
The cost of employees (including directors) during the year was made up as
follows:
2022 2021
£'000 £'000
Salaries and wages (including directors) 1,859 1,349
Social security costs 373 224
Employee benefits in kind 17 15
Pension costs 24 14
Share based payment expense 102 73
Total 2,375 1,675
Key management personnel compensation
The compensation of key management personnel, principally directors of
GENinCode Plc for the year were as follows:
2022 2021
£'000 £'000
Directors' salaries 577 506
Social security costs 77 57
Pension costs 16 10
Directors' fees 73 45
Share based payment expense 36 22
Total 779 640
The above remuneration of directors includes the following amounts paid to the
highest paid Director:
2022 2021
£'000 £'000
Highest paid Director 286 300
7. Other income
2022 2021
£'000 £'000
Bank interest income 160 8
Other revenue 13 2
Total 173 10
Finance cost
2022 2021
£'000 £'000
Discount of lease liability 14 -
Unwinding contingent consideration 6 -
Total 20 -
8. Income tax
2022 2021
£'000 £'000
Current tax credit
R&D tax credit 2020 and 2021 212 -
Total current tax - -
Deferred tax
Accelerated capital allowances (25) (6)
Total current tax (25) (6)
Total tax (charge)/credit 187 (6)
The charge for the year can be reconciled to the loss in the consolidated
statement of comprehensive income as follows:
2022 2021
£'000 £'000
(5,745) (4,137)
Expected tax credit at the UK corporation tax rate of 19% (1,091) (786)
Movement in unrecognised deferred tax asset 1,171 826
Capital allowances (41) -
Spanish deferred tax recognised in excess of UK deferred tax (63) (45)
Expenses disallowed for tax 24 5
Accelerated Capital Allowances (25) (6)
R&D tax credit 2020 and 2021 212 -
Total tax (charge)/credit 187 (6)
Factors affecting current and future taxation
Per IFRS rules, unrelieved tax losses carried forward of £3,292,336 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 confirmed in March 2022 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.
9. Profit of parent company
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 £1,906,671 (2021 -
loss of £1,856,657).
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 year.
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)
Diluted EPS
Adjusted earnings (4,070) 50,522,205 (8.05)
2022
Earnings Weighted average number of shares Per-share amount
£'000 pence
Basic EPS
Earnings attributable to ordinary shareholders (5,920) 95,816,866 (6.18)
Diluted EPS
Adjusted earnings (5,920) 95,816,866 (6.18)
The Company had options issued over 8,248,000 (2021, 8,048,000) ordinary
shares.
Due to the losses incurred from continuing operations in the years reported,
there is no dilutive effect from the existing share options.
11. Investments
Company
£'000
Cost
At 1 January 2021 3
Share based payments 28
At 31 December 2021 31
Additions 149
Share based payments 41
As at 31 December 2022 221
11. Investments (cont)
Share based payments relate to costs of employee options
in the Company for employees of its subsidiary.
Name of entity Country of incorporation Ownership held Principal activities
Holding 2022 2021
GENinCode S.L.U. Spain Ordinary shares 100% 100% Medical and scientific research
GENinCode U.S. INC. USA Ordinary shares 100% 100% Medical and scientific research
GENinCode UK Ltd England & Wales Ordinary shares 100% 100% Dormant company
Abcodia Ltd England & Wales Ordinary shares 100% - Medical and scientific research
Abcodia UK Ltd England & Wales Ordinary shares 100%- Indirectly through Abcodia Ltd - Medical and scientific research
Abcodia CS Ltd England & Wales Ordinary shares 100%- Indirectly through Abcodia Ltd - Medical and scientific research
Abcodia Inc USA Ordinary shares 100%- Indirectly through Abcodia Ltd - Medical and scientific research
Abcodia Limited was purchased by GENinCode Plc on the 27(th) September 2022,
as of this date it owns 100% of Abcodia Limited together with its
subsidiaries. Part of the consideration for the acquisition of Abcodia Ltd
was deferred based on a performance related contingency, see Note 22. More
discussion on the acquisition is included under Goodwill, see Note 26.
In September 2022, the entire issue share capital of Abcodia Limited was
acquired. Abcodia focusses on the early detection of familial ovarian cancer
in genetically high-risk populations; the proprietary test (ROCA) developed by
Abcodia involves sample collection, algorithmic analysis, and test result
delivery to the patient, all potentially synergistic with existing GENinCode
operations. An additional revenue stream is expected to accrue to GENinCode
from 2023 from private patients and hopefully NHS patients from 2024, subject
to the development of NICE guidance. Goodwill was £149,000 at 31 December
2022 (2021: £0).
12. Intangible assets
Group
Software Patents & Licences Total
£'000 £'000 £'000
Cost
At 1 January 2021 65 116 181
Additions 9 95 104
Disposals (19) - (19)
Movement on retranslation (5) - (5)
At 31 December 2021 50 211 261
Adjustment relating to 2021 (8) (8)
Movement on retranslation 3 - 3
At 31 December 2022 53 203 256
Amortisation
At 1 January 2021 26 15 41
Charge for the year 12 17 29
Movement on retranslation (2) - (2)
At 31 December 2021 36 32 68
Adjustment relating to 2021 (8) (8)
Charge for the year 12 20 32
Movement on retranslation 3 - 3
At 31 December 2022 50 44 94
Net book value
At 31 December 2021 14 179 193
At 31 December 2022 2 159 161
12. Intangible assets (continued)
Company
Patents & Licences
£'000
Cost
At 1 January 2021 116
Additions 95
At 31 December 2021 211
Adjustment relating to 2021 (8)
At 31 December 2022 203
Amortisation
At 1 January 2021 15
Charge for the year 17
At 31 December 2021 32
Adjustment relating to 2021 (8)
Charge for the year 20
At 31 December 2022 44
Net book value
At 31 December 2021 179
At 31 December 2022 159
13. Property, Plant and Equipment
Group Plant Office equipment Total
£'000 £'000 £'000
Cost
At 1 January 2021 4 10 14
Additions - 41 41
At 31 December 2021 4 51 55
Additions 1 699 700
At 31 December 2022 5 750 755
Depreciation
At 1 January 2021 1 2 3
Charge for the year 1 5 6
At 31 December 2021 2 7 9
Charge for the year 1 92 93
At 31 December 2022 3 99 102
Net book value
At 31 December 2021 3 43 46
At 31 December 2022 2 651 653
13. Property Plant and Equipment (cont)
Company Office Equipment
£'000
Cost
At 31 December 2021 35
Additions 164
At 31 December 2022 199
Depreciation
At 31 December 2021 3
Charge for the year 32
At 31 December 2022 35
Net book value
At 31 December 2021 32
At 31 December 2022 164
14. Inventory
Group
2022 2021
£'000 £'000
Inventory 20 14
Total 20 14
15. Trade and other receivables
Group
2022 2021
£'000 £'000
Trade receivables 315 234
Other receivables 299 31
Prepayments 103 134
Total 717 399
Company
2022 2021
£'000 £'000
NON-CURRENT
Intercompany receivables 5,668 2,791
Total 5,668 2,791
CURRENT
Trade receivables 156 60
Other receivables 296 31
Prepayments 79 77
Total 531 168
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.
16. Financial assets
Group
2022 2021
£'000 £'000
Financial assets 16 4
Total 16 4
The Financial assets relate to
Spanish ring-fenced money for Tender bids and office rent.
17. Cash and cash equivalents
Group
2022 2021
£'000 £'000
Total 9,732 14,554
Company
2022 2021
£'000 £'000
Total 9,468 14,243
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
2022 2021
£'000 £'000
NON-CURRENT
Contingent consideration (note 22) 155 -
Lease liability (note 24) 285 -
Trade payables 1,278 661
Total 1,719 661
CURRENT
Trade payables 1,416 345
Accruals 432 243
Tax payable 154 100
Lease liability (note 24) 69 -
Other payables 76 137
Total 2,147 825
18. Trade and other payables (cont.)
Company
2022 2021
£'000 £'000
NON-CURRENT
Contingent consideration (note 22) 155 -
Lease liability (note 24) 285 -
Total 440 -
CURRENT
Trade payables 454 100
Accruals 262 238
Lease liability (note 24) 69 -
Tax payable 28 21
Other payables 5 4
Total 818 363
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.
19. Provisions and contingencies
Group
2022 2021
£'000 £'000
Deferred tax 31 6
Total 31 6
Company
2022 2021
£'000 £'000
Deferred tax 31 6
Total 31 6
Deferred tax relates to accelerated capital allowances.
20. Share capital
2022 2021
£'000 £'000
95,816,866 Ordinary shares of £0.01 958 958
Total 958 958
21. Share based payments
The Company has issued share options as an incentive to certain senior
management. All share options granted during the year were granted under
individual agreements and are subject to market and service vesting
conditions. The exercise price is 44 pence on 772,000 shares and the rest are
at 15.83 pence.
Each share option converts into one ordinary share of GENinCode plc on
exercise and are accounted for as equity-settled share-based payments. The
equity instruments granted carry neither rights to dividends nor voting
rights.
No. options Weighted average exercise price (pence)
Balance as at 31 December 2021 8,048,000 17.83
Granted in 2022 200,000 44
Balance as at 31 December 2022 8,248,000 18.47
Exercisable at 31 December 2022 - -
The vesting conditions are as
follows:-
· Staff and Board - based on market conditions, estimated 5 at years
vesting period
· Advisors - three years following grant date
The value of share based payments
charged to administrative expenses was £101,894.
The fair value is estimated at the date of grant using the Black-Scholes
pricing model, taking into account the terms and conditions attached to the
grant. The following are the inputs to the model for the equity instruments
granted during the period:
Expected life 3-5 years
Expected Volatility 50%
Risk-free interest rate 0.35%
Share price at grant 12.2p to 15.83p
Fair value per award 4.27p to 7.92p
22. Contingent consideration
Group
2022 2021
£'000 £'000
NON-CURRENT
Contingent consideration 155 -
Total 155 -
Company
2022 2021
£'000 £'000
NON-CURRENT
Contingent consideration 155 -
Total 155 -
This is in relation to the
purchase of Abcodia Limited and is payable in over 5 years and has been
discounted at the appropriate
rate.
An amount of £155,000 has been accounted for as Contingent Consideration,
being the £149,000 Goodwill amount in addition to £6,000 of post-acquisition
finance charges. For more information please see note 26.
23. Right of use assets
Group Right of use asset: Buildings
£'000
Cost
Additions 387
At 31 December 2022 387
Depreciation
Charge for the year 39
At 31 December 2022 39
Net book value
At 31 December 2021 -
At 31 December 2022 349
Company Right of use asset: Buildings
£'000
Cost
Additions 387
At 31 December 2022 387
Depreciation
Charge for the year 39
At 31 December 2022 39
Net book value
At 31 December 2021 -
At 31 December 2022 349
24. Lease liability
Maturity analysis- contractual undiscounted cash
flows:
Group
2022 2021
£'000 £'000
Less than one year (undiscounted) 91
One to five years (undiscounted) 320 -
More than 5 years (undiscounted) - -
Lease liability included in the financial statements:
Group
2022 2021
£'000 £'000
NON-CURRENT
Lease liability 285 -
Total 285 -
CURRENT
Lease liability 69 -
Total 69 -
24. Lease liability (Cont.)
Maturity analysis- contractual undiscounted cash
flows:
Company
2022 2021
£'000 £'000
Less than one year (undiscounted) 91
One to five years (undiscounted) 320 -
More than 5 years (undiscounted) - -
Lease liability included in the financial statements:
Company
2022 2021
£'000 £'000
NON-CURRENT
Lease liability 285 -
Total 285 -
CURRENT
Lease liability 69 -
Total 69 -
An interest expense of £13,807 with regards to the lease liability has been
included in the accounts. A discount rate of 7.5% is used in the calculation
of the liability and right of use asset. The lease term is 5 years ending in
August 2027.
25. Reserves
The following describes the nature and purpose of each
reserve within equity:
Share capital Amount subscribed for share capital fully paid.
Retained earnings Retained earnings represents all other net gains and losses and transactions
with shareholders (example dividends) not recognised elsewhere.
Share premium Excess subscribed above nominal value of shares. Included within share premium
are share issue costs which relate to commissions and other directly
attributable costs.
Foreign currency translation reserve This represents the net effect of translation of the subsidiaries whose
functional currencies are EUR and USD into GBP the reporting currency.
Share based payment reserve This reserve compromises the fair value of options share rights recognised as
an expense. Upon exercise of options or performance share rights, any proceeds
received are credited to share capital.
26. Goodwill
Group Goodwill
£'000
Cost
Additions 149
At 31 December 2022 149
Net book value
At 31 December 2021 -
At 31 December 2022 149
Abcodia Limited was purchased for an initial cash
price of £1, the fair value of the net assets acquired were £1. In addition,
a deferred consideration of up to £1m is payable to the vendors subject to
the achievement of an EBIT of £1m generated by the sale of ROCA tests in the
UK during the 6-year period following the date of acquisition. This is payable
in two tranches; the first tranche of £350,000 is payable on the achievement
of an EBIT of £350,000, and the second tranche of £650,000 is payable on the
achievement of a further £650,000 of EBIT. Goodwill has been calculated on
the basis of only the first tranche of £350,000 being payable to the vendors,
discounted to a present value of £149,000 using a rate of 15.3%.
27. Capital commitments
There is no capital expenditure contracted at this year-end reporting.
28. Related Party Transactions
During the year the Group and Company entered into the following transactions
with related parties:
2022 2021
Related party Transaction £'000 £'000
Jordi Puig Gilberte Executive director fees, £25,320 was outstanding 31.12.22 (2021, £30,954) 112 103
Felix Frueh Fees 23 -
Huon Gray Fees (pre-Directorship) 5 -
William Rhodes Chairman's fees 45 45
In addition to the above, share options were granted to key personnel during
the year, see the Directors' report for details.
Compensation of key management personnel of the Group
Key management are those persons having authority and responsibility for
planning, controlling and directing the activities of the Company. In the
opinion of the Board, the Company's key management are the Directors of
GENinCode plc.
Amounts included in the Financial Statements, in aggregate, by category of
related party are as follows:
Group Group
31 December 2022 31 December 2021
Directors £'000 £'000
Directors' remuneration (short term benefits) 650 551
Directors' remuneration (pension cost) 16 10
Directors' remuneration (employers NI) 77 57
Share based payments 36 22
Total 779 640
29. Contingent liability
There is a contingent consideration relating to the Abcodia Limited's deferred
consideration. The contingent consideration is on the second tranche of
£650,000 being payable on the achievement of £1m of EBIT generated by the
sale of ROCA tests in the UK during a 6-year period following the date of
acquisition. Due to current performance and predictions this possibility is
extremely unlikely therefore has not been provided for in the financial
statements.
30. Events after the reporting date
There are no significant adjusting or non-adjusting events after the reporting
date
31. Ultimate controlling party
The Group does not have an ultimate controlling party.
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