REG - Nuformix PLC - Annual Results for the year ended 31 March 2022
28/07/2022 07:16
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220728:nRSb9999Ta&default-theme=true
RNS Number : 9999T Nuformix PLC 28 July 2022
28 July 2022
Nuformix plc
("Nuformix" or the "Company" or the "Group")
Annual Results for the year ended 31 March 2022
Nuformix plc (LSE: NFX), a pharmaceutical development company targeting unmet
medical needs in fibrosis and oncology via drug repurposing, is pleased to
announce its audited results for the year ended 31 March 2022.
Non-executive Directors' Statement
Introduction
Following the departure of Dr Anne Brindley as Chief Executive Officer, and
post period end, Dr Alastair Riddell as Executive Chairman, both to pursue
other opportunities, the key priority for the directors continues to be to
focus on the Company's early-stage pipeline of preclinical assets and ensure
strength in the areas of drug development, business development and financial
control within the Group. We operate a lean structure with the limited Board
and bring in specialists and consultants, experts in their field, to support
the business as required.
To enhance the Group's funding position to allow the continued work on the
three assets in the pipeline, in December 2021, the Company undertook an
equity fundraise, together with related sharing agreements, with Lanstead
Capital Investors L.P. ("Lanstead"), an institutional investor.
Pipeline
Nuformix has an early-stage pipeline of preclinical assets in development to
address the high unmet medical need in fibrosis and oncology. We target
solutions using our expertise to discover, develop and file patent
applications on novel drug forms of existing, marketed drugs, that have
improved physical properties, with the aim of developing novel products in new
indications to bring attractive commercial opportunities. Importantly, the
commercial opportunity is optimised when the repurposed product is
differentiated from the original marketed drug by way of either dose, route of
administration or presentation.
Drug repurposing is a well-known and successful strategy for enhancing the
therapeutic and commercial value of marketed drugs, and their development
typically brings a greater probability of success compared to developing brand
new drugs, due to the existing data that has been generated on the marketed
drug. This existence of data may also result in lower overall development
costs and shorter development timelines.
The Group's business model is to take these assets to key value inflection
points before partnering or licensing. We conduct our R&D activities
through out-sourcing, to enable us to access the different types of expertise
that are needed for drug R&D and to minimise our operational costs. We
have a strong network of external contractors, with whom we have had
relationships over many years.
NXP002 (new form of tranilast) - Idiopathic Pulmonary Fibrosis ("IPF")
NXP002 is the Group's pre-clinical lead asset and a potential novel inhaled
treatment for IPF and possibly other fibrosing interstitial lung diseases
("ILDs"). It is a proprietary, new form of the drug tranilast, to be delivered
in an inhaled formulation.
Idiopathic Pulmonary Fibrosis ("IPF") is a devastating lung disease associated
with a higher mortality rate than many cancers and where there is a need for
additional treatment options. Thus, IPF represents a high unmet medical need
and a significant commercial opportunity. IPF is classified as a rare disease
and presents a global commercial market that is forecast to grow to US$8.8bn
by 2027. Sales of standard-of-care therapies OFEV and Esbriet achieved
US$2.5bn and US$1bn respectively in 2021.
Tranilast has a long history of safe use as an oral drug for allergies, but
there is evidence that supports its potential in fibrosis, including IPF.
NXP002 is differentiated as it is a new form of tranilast that is being
formulated for delivery direct to the lungs by inhalation, a new route of
administration for this drug. The inhalation route is a well-known strategy
for treatment of lung diseases to yield greater efficacy and reduce systemic
side-effects compared to oral treatment. Nuformix has two patent families
protecting new forms of tranilast, some members of which have been granted in
major pharmaceutical territories, while others are still in prosecution. In
addition, in March 2022 a method of use patent application was filed.
NXP002, as a potential treatment for IPF, is a likely candidate for Orphan
Drug Designation which could provide additional product protection against
potential competitors. The positioning of such an inhaled treatment for IPF
could be either added to standard of care or administered as a monotherapy.
The Company has already generated positive preclinical data on NXP002,
demonstrating that:
- NXP002 can be formulated in a simple and stable solution suitable
for inhaled delivery via nebulisation;
- NXP002 formulations for nebulisation can be efficiently delivered
to the lung; and
- NXP002 can dose-dependently regulate the production of mediators
relevant to lung fibrosis and inflammation following a lipopolysaccharide
("LPS") challenge.
However, as announced post-period end on 30 May 2022, no conclusions could be
drawn from an additional study undertaken to investigate the duration of
action of NXP002 formulations. Subsequently further studies have been
initiated to generate a robust pre-clinical data package to support the
progression of NXP002, both in terms of product development and business
development discussions.
These studies will directly address issues faced in the duration of action
studies. Firstly, the Company will investigate a new formulation of NXP002 for
inhalation, delivered using an alternative method designed to ensure
consistent and controlled exposure is achieved. Secondly, the Company will
explore a new range of doses to best optimise efficacy of treatment. The
eventual aim of the studies is to confirm the formulation's positive
pharmacological profile towards the treatment of lung fibrosis and
inflammation via inhalation and to assess its duration of action. Data from
these inhalation studies will add to the Company's current compelling
pre-clinical dataset, to best support the development of NXP002 as a treatment
for IPF and potentially other poorly treated fibrosing interstitial lung
diseases.
Post-period, two abstracts describing NXP002 were peer-reviewed and accepted
for presentation at the European Respiratory Society ("ERS") International
Congress 2022 being held in Barcelona on 4-6 September 2022.
NXP001 (new form of aprepitant) - Oncology
NXP001 is a proprietary new form of the drug aprepitant that is currently
marketed as a product in the oncology supportive care setting (chemotherapy
induced nausea and vomiting). On 23 September 2020, Nuformix granted an
exclusive option to Oxilio Ltd ("Oxilio"), a privately held pharmaceutical
development company, to license NXP001 globally for oncology indications on
terms previously disclosed. The option was executed on 13 September 2021.
Oxilio is investigating aprepitant for the potential new treatment of cancer
indications. Oxilio has entered into a service agreement with Quotient
Sciences and is conducting formulation development of NXP001 to determine
whether it can achieve the bioavailability and subsequent dosing regimen
required for this new indication.
NXP004 (novel forms of olaparib) - Oncology
The Group has discovered novel forms of olaparib, a drug currently marketed by
AstraZeneca, under the Lynparza® brand name. Lynparza® was first approved in
December 2014 for the treatment of adults with advanced ovarian cancer and
deleterious or suspected deleterious germline BRCA mutation. Since then,
Lynparza® has secured similar approvals in breast, pancreatic and prostate
cancers with further trials on-going. These approvals have propelled
Lynparza® sales to US$2.7bn in 2021 with industry analysts forecasting annual
sales of US$9.7bn by 2028.
The Group has filed two patent applications on these novel forms of olaparib
with the potential for patent life to 2040/2041.
The Company previously demonstrated the enhanced performance of NXP004
cocrystals compared to olaparib. Subsequently further preformulation studies
have allowed the Company to identify lead cocrystals from its patent estate to
be progressed for further development.
Post-period, the Company reported that it initiated a programme of work to
progress the NXP004 programme in three key areas:
· Commence the scale-up of lead cocrystal production processes;
· Directly compare in-vitro dissolution performance of lead co-crystals
to the marketed Lynparza product; and
· Based on the results from these studies a formulation development
programme may be initiated. The aims of this work will be to develop prototype
formulations that offer the potential to be both bioequivalent and
'bio-better' versus the Lynparza product.
This work will direct and support future out-licensing discussions for NXP004.
Summary and Outlook
The strategy of the Group is to continue to optimise value from its existing
assets while maintaining tight control of costs. In particular, the fundraise
with Lanstead has enabled the Group to continue to advance and exploit the
current assets within the portfolio through additional R&D and business
development activities as set out above.
At the appropriate time for each asset, the Group plans to conduct business
development/licensing activities for all its assets using a structured and
data-driven approach, with the goal of seeking global licensing deals.
The Chairman last year acknowledged that there had been a series of changes
over the years which we also experienced in the past year and more recently,
however our focus and emphasis is on stability to progress the studies and
achieve significant value creation to generate a real return for shareholders.
We would like to thank all stakeholders and in particular our shareholders for
their continued support and we look forward to the remainder of the year and
beyond with confidence that significant value can be realised from our
portfolio of assets over time.
Julian Gilbert and Maddy Kennedy
Non-Executive Directors
27 July 2022
Enquiries:
Nuformix plc
Dr Julian Gilbert, Non-executive Director Via IFC Advisory
Maddy Kennedy, Non-executive Director
Stanford Capital Partners Limited
Tom Price / Patrick Claridge (Corporate Finance) +44 (0) 20 3650 3650
John Howes (Corporate Broking) +44 (0) 20 3650 3652
IFC Advisory Limited
Tim Metcalfe +44 (0) 20 3934 6630
Zach Cohen nuformix@investor-focus.co.uk
About Nuformix
Nuformix is a pharmaceutical development company targeting unmet medical needs
in fibrosis and oncology via drug repurposing. The Company aims to use its
expertise in discovering, developing and patenting novel drug forms, with
improved physical properties, to develop new products in new indications that
are, importantly, differentiated from the original (by way of dosage, delivery
route or presentation), thus creating new and attractive commercial
opportunities. Nuformix has a pipeline of preclinical assets with potential
for significant value and early licensing opportunities.
Strategic Report
Review of the Business
A review of the year is given in the Non-Executive Directors' Statement above.
Risks and uncertainties
The Group's risk management policy is regularly reviewed and updated in line
with the changing needs of the business. Risk is inherent in all business. Set
out below are certain risk factors which could have an impact on the Group's
long-term performance and mitigating factors adopted to alleviate these risks.
This does not purport to be an exhaustive list of the risks affecting the
Group.
The primary risks identified by the Board are:
Strategic risks
· Funding the business
The biotechnology and pharmaceutical industries are very competitive, with
many major players having substantial R&D departments with greater
resources and financial support. The Group aims to execute licensing deals
early in the development process in order to generate revenue to support the
business. The Group's lead asset is targeted towards IPF, a disease area where
there is good precedent for licensing deals at early stages of development.
Without licensing revenue, reliance falls on raising funds from investors or
potential M&A opportunities. Failure to generate additional funding from
these sources, if required, would compromise the Group's ability to achieve
its strategic objectives as set out in the outlook. There is a material
uncertainty around achieving early licensing deals and, if needed, raising
additional funds. However it is the Directors' reasonable expectation that the
Group has adequate resources to continue to operate as a going concern for at
least twelve months from the date of the approval of the accounts. In forming
this assessment, the Directors have prepared cashflow forecasts covering the
period ending 31 March 2024 that take into account the likely run rate on
overheads and research and development expenditure and the prudent
expectations of income from out-licensing rights to its programmes.
The Subscription proceeds from the Lanstead Sharing Agreements pursuant to
which the Company is entitled to receive back those proceeds on a pro rata
monthly basis over a period of 20 months, subject to adjustment upwards or
downwards each month depending on the Company's share price at the time. The
Sharing Agreement provides the opportunity for the Company to benefit from
positive future share price performance. Notwithstanding the Subscription
Price of 1.5 pence, shareholders should note that the share price of the
Company needs to be on average over the 20 months of the Sharing Agreement at
or above the Benchmark Price of 2 pence per share for the Company to receive
at least, or more than, the gross Subscription of £1.65million.
· Feasibility of drug candidates
Pharmaceutical R&D is an inherently risky activity and drug candidates can
fail due to a lack of efficacy, lack of potency, unsuitable pharmacokinetic
properties, unacceptable toxicology profile, poor stability of the drug or
formulation, poor performance of the drug product, or other technical issues
unforeseen at the time of candidate selection. This is the main reason that
conventional pharmaceutical R&D takes many years and billions of dollars
to progress a drug from discovery through to an approved medicine. It is
possible that the drug candidates selected by the Group are found to be non-
viable for further development although the Group's model of repurposing and
working on known drugs allows us to mitigate this risk to a certain extent.
· Failure to generate and protect our IP
If our IP rights are not adequately secured or defended against infringement,
or conversely become subject to infringement claims by others, commercial
exploitation could be completely inhibited. The Group constantly monitors its
patents and is prepared to defend them rigorously.
By virtue of conducting research on known drugs, competitors may file patent
applications on the same drugs as the Group, and thus there is a risk of
securing new granted patents. There is a delay of up to 18 months in
publishing patent applications and thus it is not always known whether the
Group's inventions will be novel. This is mitigated through knowledge and
expertise in identifying new IP and promptly filing patent applications.
· Unrealistic goals and timeframes
The Board has a duty to maintain a realistic view of the chances of success of
products, deals and partnerships. Should this not be managed accurately and
appropriately, the Group and its Board and staff risk financial, business and
reputational damage, whilst its shareholders become exposed to investment risk
and uncertainty over the Group's viability and status. The Board continually
reviews expectations and communications in the public domain to reduce the
risk of misalignment.
· Reliance on partners
To progress the development of a drug candidate requires resources, financial
and otherwise, that are not necessarily available to the Group. The drug
candidates that the Group wishes to develop may be of interest to third
parties capable of providing these resources, so a partnership (e.g., a
co-development partnership) may provide mutual benefits and mitigate risks
for the Group. However, the specific strategic focus of a partner may not
align totally with the Group's objectives. Maintaining a balance in a
partnership is therefore a risk, such as timing, cost sharing, development
decisions. Currently the Group is progressing two of its three pipeline assets
without external co-development partners and thus this risk is currently
minimised.
Operational risks
· Management, employees, consultants and contractors
With a fully virtual Group operating model with a reliance on consultants and
contractors, the Group's ability to manage day to day tasks and its
relationships with its customers and suppliers could be undermined by failure
to recruit key personnel. The Group endeavours to offer attractive
remuneration and a positive working environment for all people involved in its
projects. The Board are incentivised as detailed in the Directors'
Remuneration Report.
· Business development risks in terms of timing and success of deal
flow
Opportunities to generate value from the portfolio have increased, but there
is a need to generate further data to make the assets as attractive as
possible to potential licensees. The Group seeks to extract value from its
existing pipeline through early licensing deals once sufficient data are
generated, to provide revenue. Generation of more robust data packages will
lead to a greater probability of successful licensing discussions.
· Adapting to the external environment - COVID-19
The ability of the Group to quickly adapt to external events such as the
outbreak of COVID-19 may impact the delivery of our strategy. The pandemic
could cause further impact to external research. Our primary focus remains the
safety of our employees. The Group follows Government advice whilst allowing
employees to work flexibly. The risks are also minimised by the Group's
virtual business model, allowing the Board to work remotely and effectively.
Close liaison with contractors ensures that Group projects are progressed
according to agreed timelines and costs.
Financial risk management
· Failure to achieve strategic plans or meet targets or expectations
The Group actively and regularly reviews and manages its capital structure to
ensure an optimal capital structure and equity holder returns, taking into
consideration the future capital requirements of the Group and capital
efficiency, prevailing and projected profitability, projected operating cash
flows, projected capital expenditures and projected strategic investment
opportunities. Further detail on the Group's risk management policies and
procedures are set out in Note 20 of the financial statements.
Financial Highlights
· Net assets at year-end of £4,737,962 (2021: £5,686,261) which
includes £464,095 cash at bank (2021: £1,669,780)
· The Group delivered a loss on ordinary activities (after tax credit)
for the year of £1,108,993 (2021: loss of £1,253,497) and a loss per share
of 0.19p (2021: 0.22p). The reported loss is driven mainly by costs related to
the further development of pipeline assets
· Total revenue for the year of £50,000 (2021: £195,550)
Future outlook
The Non-Executive Directors' Statement above gives information on the outlook
of the Group.
Performance
The following are the key performance indicators ("KPIs") considered by the
Board in assessing the Group's performance against its objectives. These KPIs
are:
Financial KPIs
The Group is currently at a stage where the Board considers availability of
cash to fund the planned R&D activities to be the primary KPI. At 31 March
2022 cash balances totalled £464,095 (2021: £1,669,780). The Board will
consider introducing additional KPIs to monitor the Group's development as
they become relevant in the future.
· Meeting financial targets:
The Group actively and regularly reviews and manages its capital structure to
ensure an optimal capital structure and equity holder returns, taking into
consideration the future capital requirements of the Group and capital
efficiency, prevailing and projected profitability, projected operating cash
flows, projected capital expenditures and projected strategic investment
opportunities. Further detail on the Group's risk management policies and
procedures are set out in Note 20 of the financial statements.
· Revenue from collaborative technology licensing agreements:
During the year, collaborative agreements with third parties entailed
providing fee-for-service work and applying Nuformix know how to their
proprietary products. This has provided Nuformix with limited short-term
revenue streams.
The future Group strategy is to prioritise its resources on progressing its
own portfolio to generate licensing revenue.
Non-Financial KPIs
· Progress of Lead Programmes:
The Group strategy is to generate revenue streams through applying and further
developing its IP to produce proprietary product opportunities for short-term
development and early out-licensing opportunities. Thus, progression of its
assets towards licensing is crucial to the business.
NXP002: During the year the Group prioritised the development of NXP002, its
IPF candidate, and generated further preclinical data. Post-period, studies
are ongoing to provide a more robust data package for potential early
licensing. In addition, two abstracts describing the NXP002 were peer-reviewed
and accepted for presentation at the European Respiratory Society ("ERS").
Progression of the planned R&D, filing a patent application and peer
reviewed acceptance of submitted abstracts are important performance
indicators.
NXP001: In the Group signed an exclusive global licensing agreement with
Oxilio to license the NXP001 IP for oncology indications. Securing the full
licensing agreement is an important performance indicator.
NXP004: During the year, the Group discovered new forms of olaparib, a
commercially attractive oncology drug, and filed an additional patent
application, an important performance indicator.
· Co-development with third parties:
Co-development of generic products with third parties, where Nuformix's
knowhow or IP could provide extended patent protection is a potential business
model although the Group is prioritising its resources on progressing its own
portfolio to generate licensing revenue.
Section 172
The Board considers the interests of the Group's employees and other
stakeholders, including the impact of its activities on the community,
environment and the Group's reputation, when making decisions. The Board
ensures that its decisions offer the best chance to promote the success of the
Group as a whole and consider the likely and long-term consequences for all
stakeholders, particularly (though not exclusively) considering the following:
· How the views and interests of all stakeholders were represented in
the boardroom during the year. Open and honest discussion at Board level
considers the impact on the Group's stakeholders when reviewing items flowing
to the Board as part of its activities, whether this is reviewing strategy,
budget or a business development opportunity.
· Given the size and stage of development of the Group, the Board has
not formally adopted a mechanism to obtain stakeholder feedback. However, the
Group's Directors can be contacted at info@nuformix.com
(mailto:info@nuformix.com) should any stakeholders wish to contact the Group
and shareholders may contact the Company's investor relations adviser, IFC
Advisory Limited, at nuformix@investor-focus.co.uk.
· The Group's strategy and business model detailed in the Non-Executive
Directors' Statement above
· How the Group manages risks is set out in the full annual report
· Corporate governance including how governance supported the delivery
of our strategic objectives in this period is set out in the annual report
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. The Directors are required by law to prepare the Group and
Parent Company financial statements in accordance with UK-adopted
international accounting standards. Under Company law, the Directors must not
approve the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Company and Group and of the
profit or loss for that period. In preparing the Company and Group's financial
statements, Companies Act 2006 requires that Directors:
· Select suitable accounting policies and apply them consistently;
· Make judgements and accounting estimates that are reasonable and
prudent;
· State whether applicable under UK-adopted international accounting
standards, have been followed, subject to any material departures disclosed
and explained in the financial statements; and
· Prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Group will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group transactions and disclose with
reasonable accuracy at any time the financial position of the Group and
enable them to ensure that the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the Group
and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
In the case of each person who was a director at the time of this report was
approved:
· So far as that Director is aware, there is no relevant audit
information of which the Group's auditor is unaware; and
· That Director has taken all steps that the director ought to have
taken as a director to make himself aware of any relevant audit information
and to establish that the Group's auditor is aware of that information.
Auditors
A resolution to reappoint Jeffreys Henry Audit Limited as auditors will be
presented to the members at the Annual General Meeting in accordance with
Section 485(2) of the Companies Act 2006.
Independent Auditor's Report to the Members of Nuformix plc
Opinion
We have audited the financial statements of Nuformix plc ("Parent Company")
and its subsidiary (together the "Group") for the year ended 31 March 2022
which comprise the statement of comprehensive income, the statements of
financial position, the statements of changes in equity, the statements of
cash flows and notes to the financial statements, including a summary of
significant accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and UK-adopted
International Accounting Standards.
In our opinion, the financial statements:
• give a true and fair view of the state of the
Group's and of the Parent Company's affairs as at 31 March 2022 and of the
loss for the year then ended;
• have been properly prepared in accordance with
UK-adopted International Accounting Standards; and
• have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the Group in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC's Ethical
Standard as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements, which indicates that
the Group and Parent Company is not in a position where is it self-financing
and will require further funding which has not yet been secured. Whilst
management are confident that such funding will be achieved there is an
inherent material uncertainty surrounding this. As stated in note 2, these
events or conditions, along with other matters set out in note 2, indicate
that a material uncertainty exists that may cast significant doubt on the
Group and Parent Company's ability to continue as a going concern. Our opinion
is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the Directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the Directors'
assessment of the Group's ability to continue to adopt the going concern basis
of accounting included, as part of our risk assessment, review of the nature
of the business of the Group, its business model and related risks including
where relevant the impact of the COVID-19 pandemic, the requirements of the
applicable financial reporting framework and the system of internal control.
We evaluated the Directors' assessment of the Group's ability to continue as a
going concern, including challenging the underlying data and key assumptions
used to make the assessment, and evaluated the Directors' plans for future
actions in relation to their going concern assessment.
Our responsibilities and the responsibilities of the Directors with respect to
going concern are described in the relevant sections of this report.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the
risks of material misstatement in the financial statements. In particular, we
looked at where the Directors made subjective judgments, for example in
respect of significant accounting estimates that involved making assumptions
and considering future events that are inherently uncertain. As in all of our
audits we also addressed the risk of management override of internal controls,
including evaluating whether there was evidence of bias by the Directors that
represented a risk of material misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to
be able to give an opinion on the financial statements as a whole, taking into
account the structure of the Group, its accounting processes, its internal
controls and the industry in which it operates.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
In addition to the matter described in the material uncertainty related to
going concern section above, we have determined the matters below to be the
key audit matters to be communicated in our report.
Below is not a complete list of all risks identified by our audit.
Key Audit Matter How our audit addressed the Key Audit Matter
Impairment of goodwill Our key procedures, among others, included:
At 31 March 2022, the Group had goodwill of approximately £4,023,000 (2021: · assessing the appropriateness of the VIU calculations used by the
£4,023,000) arising from acquisition of business in prior years. management to estimate recoverable amount of CGU;
· reconciling key input data applied in the VIU calculations to
reliable supporting evidence; and
For the purpose of assessing impairment on goodwill arising from business
combination, goodwill is allocated to a single cash generating units ('CGU') · challenging the reasonableness of key assumptions based on our
and the recoverable amount of the CGU was determined with reference to knowledge and understanding of the business and industry.
value-in-use (the 'VIU') calculations using cash flow projections. In carrying
out the impairment assessment, significant management judgement was used to · obtaining evidence of the commercial and technical feasibility of the
determine the key assumptions underlying the VIU calculations. patents owned by the subsidiary.
We have identified the above matter as a key audit matter because goodwill is
material to the Group and the estimation of recoverable amount of the CGU
involved a significant degree of management judgement and therefore was
subject to an inherent risk of error.
Carrying value of investment in subsidiary and recoverability of intercompany We have performed the following audit procedures:
balance - parent company financial statements only.
· Reviewed management's plan of future operating cashflows of the
The Company had investment in a subsidiary of £4,023,484, net of impairment subsidiary; and
of £7,226,516, at the year ended 31 March 2022.
· obtaining evidence of the commercial and technical feasibility of the
patents owned by the subsidiary
The amount due from a subsidiary was fully impaired at the year ended 31 March
2022. We identified there was a risk in relation to the impairment on the
investment held within the parent company financial statements in its Based on the audit work performed, we are satisfied with management's
subsidiary. assertion on the impairment charged on the investment in a subsidiary and the
amount due from a subsidiary on the parent company financial statements.
Management's assessment of the recoverable amount of investment in a
subsidiary requires estimation and judgement around assumptions used,
including the cash flows to be generated from the continuing operations of the
subsidiary. Changes to assumptions could lead to material changes in the
estimated recoverable amount, impacting the value of investment in the
subsidiary and impairment charges.
Our application of materiality
The scope of our audit was influenced by our application of materiality. We
set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and
the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements
as a whole.
Based on our professional judgment, we determined materiality for the
financial statements as a whole as follows:
Group financial statements
Overall materiality £63,000
How we determined it 5% of net loss
Rationale for benchmark applied The group as a whole is currently focused on the development of its
Intellectual Property (IP), and as such the users of the financial statements
will be most concerned with the expenditure incurred in furthering these IP
assets. As such, the most appropriate basis for the group materiality is net
profit/loss.
We agreed with the Board of Directors that we would report to them
misstatements identified during our audit above £3,150 as well as
misstatements below those amounts that, in our view, warranted reporting for
qualitative reasons.
Other information
The directors are responsible for the other information. The other information
comprises the information included in the annual report, other than the
financial statements and our auditor's report thereon. Our opinion on the
financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors' remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and
the directors' report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
• the strategic report and the directors' report have
been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and its
environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act
2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by
the Group, or returns adequate for our audit have not been received from
branches not visited by us; or
• the Group financial statements and the directors'
remuneration report to be audited are not in agreement with the accounting
records and returns; or
• certain disclosures of directors' remuneration
specified by law are not made; or
• we have not received all the information and
explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement above,
the directors are responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Group's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above and on the Financial Reporting Council's website, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting irregularities,
including fraud
Our approach to identifying and assessing the risks of material misstatement
in respect of irregularities, including fraud and non-compliance with laws and
regulations, was as follows:
• the senior statutory auditor ensured the engagement team
collectively had the appropriate competence, capabilities and skills to
identify or recognise non-compliance with applicable laws and regulations;
• we identified the laws and regulations applicable to the Group
through discussions with the Directors, and from our commercial knowledge and
experience of the biotech sector;
• we focused on specific laws and regulations which we considered may
have a direct material effect on the financial statements or the operations of
the group, including Companies Act 2006, taxation legislation, data
protection, anti-bribery, employment, environmental, health and safety
legislation and anti-money laundering regulations;
• we assessed the extent of compliance with the laws and regulations
identified above through making enquiries of management and inspecting legal
correspondence; and
• identified laws and regulations were communicated within the audit
team regularly and the team remained alert to instances of non-compliance
throughout the audit.
We assessed the susceptibility of the group's financial statements to material
misstatement, including obtaining an understanding of how fraud might occur,
by:
• making enquiries of management as to where they considered there was
susceptibility to fraud, their knowledge of actual, suspected and alleged
fraud;
• considering the internal controls in place to mitigate risks of
fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls,
we:
• performed analytical procedures to identify any unusual or
unexpected relationships;
• tested journal entries to identify unusual transactions;
• assessed whether judgements and assumptions made in determining the
accounting estimates set out in Note 2 of the financial statements were
indicative of potential bias;
• investigated the rationale behind significant or unusual
transactions.
In response to the risk of irregularities and non-compliance with laws and
regulations, we designed procedures which included, but were not limited to:
• agreeing financial statement disclosures to underlying supporting
documentation;
• reading the minutes of meetings of those charged with governance;
• enquiring of management as to actual and potential litigation and
claims;
• reviewing correspondence with HMRC and the group's legal advisor.
There are inherent limitations in our audit procedures described above. The
more removed the laws and regulations are from financial transactions, the
less likely it is that we would become aware of non-compliance. Auditing
standards also limit the audit procedures required to identify non-compliance
with laws and regulations to enquiry of the directors and other management and
the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than
those that arise from error as they may involve deliberate concealment or
collusion.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor's report.
Other matters we are required to address
We were appointed by the Board of Directors on 18 February 2022 to audit the
financial statements for the year ended 31 March 2022. Our total uninterrupted
period of engagement is 1 year, covering the year ended 31 March 2022.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the Group and we remain independent of the Group in conducting our
audit.
Our audit opinion is consistent with the additional report to the Board of
Directors.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Group's members those matters we are
required to state to them in an Auditor's report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the Group and the Group's members as a body, for our
audit work, for this report, or for the opinions we have formed.
Sanjay Parmar
(Senior statutory auditor)
For and on behalf of Jeffreys Henry Audit Limited (Statutory Auditor)
Finsgate
5-7 Cranwood Street
London EC1V 9EE
Date: 27 July 2022
Financial Statements
Consolidated Statement of Comprehensive Income
for the year-ended 31 March 2022
31 March 31 March
Note 2022 2021
£ £
Revenue 3 50,000 195,550
Cost of sales (1,695) (62,307)
Gross profit 48,305 133,243
Administrative expenses (1,318,577) (1,507,221)
Other operating income 4 - 1,300
Operating loss 5 (1,270,272) (1,372,678)
Finance costs 6 - (3,054)
Loss before tax (1,270,272) (1,375,732)
Income tax credit 10 161,279 122,235
Loss for the year and total comprehensive loss for the year (1,108,993) (1,253,497)
Loss per share - basic and diluted 11 (0.19)p (0.22)p
The above results were derived from continuing operations.
The accompanying notes to the financial statements form an integral part of
the financial statements.
Consolidated Statement of Financial Position
As at 31 March 2022
Registration number: 09632100
31 March 31 March
Note 2022 2021
£ £
Assets
Non-current assets
Property, plant and equipment 12 438 957
Intangible assets 13 4,150,411 4,186,868
4,150,849 4,187,825
Current assets
Trade and other receivables 14 199,600 32,260
Income tax asset 161,279 121,020
Cash and cash equivalents 15 464,095 1,669,780
824,974 1,823,060
Total assets 4,975,823 6,010,885
Equity and liabilities
Equity
Share capital 16 615,609 591,609
Share premium 6,500,817 6,384,835
Merger relief reserve 10,950,000 10,950,000
Reverse acquisition reserve (8,005,195) (8,005,195)
Share option reserve 2,026,664 2,005,952
Retained earnings (7,349,933) (6,240,940)
Total equity 4,737,962 5,686,261
Current liabilities
Trade and other payables 19 237,861 324,624
237,861 324,624
Total equity and liabilities 4,975,823 6,010,885
The accompanying notes to the financial statements form an integral part of
the financial statements.
Consolidated Statement of Changes in Equity
For the year-ended 31 March 2022
Reverse acquisition
Merger relief reserve reserve Share option reserve Retained earnings
Share premium £ £ £ £ Total
Share capital
£ £
£
At 1 April 2021 591,609 6,384,835 10,950,000 (8,005,195) 2,005,952 (6,240,940) 5,686,261
Loss for the year and total comprehensive loss - - - - - (1,108,993) (1,108,993)
Issue of share capital 24,000 145,982 - - - - 169,982
Share issue costs - (30,000) - - - - (30,000)
Share and warrant based payment - - - - 20,712 - 20,712
At 31 March 2022 615,609 6,500,817 10,950,000 (8,005,195) 2,026,664 (7,349,933) 4,737,962
Reverse
Merger relief reserve acquisition Share option reserve Retained
Share capital Share premium £ reserve £ earnings Total
£ £ £ £ £
At 1 April 2020 490,145 4,480,400 10,950,000 (8,005,195) 1,814,613 (4,987,443) 4,742,520
Loss for the year and total comprehensive loss - - - - - (1,253,497) (1,253,497)
Issue of share capital 101,464 2,113,535 - - - - 2,214,999
Share issue costs - (209,100) - - - - (209,100)
Share and warrant based payment - - - - 191,339 - 191,339
At 31 March 2021 591,609 6,384,835 10,950,000 (8,005,195) 2,005,952 (6,240,940) 5,686,261
The accompanying notes to the financial statements form an integral part of
the financial statements.
Consolidated Statement of Cash Flows
for the year-ended 31 March 2022
31 March 31 March
2022 2021
Note £ £
Cash flows from operating activities
Loss for the year (1,108,993) (1,253,497)
Adjustments to cash flows from non-cash items
Depreciation and amortisation 12,13 36,976 93,052
Loss on disposal of plant, property and equipment 12 - 6,179
Finance costs 6 - 3,054
Income tax credit 10 (161,279) (122,235)
Share and warrant based payment 20,712 191,339
(1,212,584) (1,082,108)
Working capital adjustments
(Increase)/Decrease in trade and other receivables 14 (167,340) 47,237
(Decrease)/Increase in trade and other payables 19 (86,763) 16,099
Cash consumed by operations (1,466,687) (1,018,772)
Income taxes received 10 121,020 173,606
Net cash used in operating activities (1,345,667) (845,166)
Cash flows from investing activities
Acquisitions of property plant and equipment 12 - (605)
Disposals of property plant and equipment 12 - 44,322
Net cash from investing activities - 43,717
Cash flows from financing activities
Issue of shares (net of costs) 139,982 2,005,899
Interest paid 6 - (3,054)
Reduction in other loans 19 - (75,388)
Net cash from financing activities 139,982 1,927,457
Net increase/(decrease) in cash and cash equivalents (1,205,685) 1,126,008
Cash and cash equivalents at 1 April 1,669,780 543,772
Cash and cash equivalents at 31 March 464,095 1,669,780
The accompanying notes to the financial statements form an integral part of
the financial statements
Notes to the Consolidated Financial Statements
for the year-ended 31 March 2022
1. General information
Nuformix plc ("the Company") and its subsidiary (together, "the Group")
operate in the field of pharmaceutical development targeting unmet medical
needs in fibrosis and oncology via drug repurposing.
The Company is a public limited company which is listed on the Standard List
of the London Stock Exchange, domiciled in the United Kingdom ("the UK") and
incorporated in England and Wales.
The address of its registered office is 6th Floor, 60 Gracechurch Street,
London, EC3V 0HR.
The company operates in a virtual manner and as such does not have a principal
place of business.
2. Summary of Significant Accounting policies
Basis of preparation
On 31 December 2020, IFRS as adopted by the European Union at that date was
brought into UK law and became UK-adopted International Accounting Standards,
with future changes being subject to endorsement by the UK Endorsement Board.
Nuformix plc transitioned to UK-adopted International Accounting Standards in
its Group and Parent Company financial statements on 1 April 2021. This change
constitutes a change in accounting framework. However, there is no change on
recognition, measurement or disclosure in the financial year reported as a
result of the change in framework.
These Group and Parent Company financial statements were prepared in
accordance with UK-adopted International Accounting Standards and with the
requirements of the Companies Act 2006 as applicable to companies reporting
under those standards.
The financial statements of the Group and the Parent Company have been
prepared on accrual basis and under historical cost convention. The financial
statements are presented in Pounds Sterling which is the Group's functional
and presentational currency.
New Standards and Interpretations
No new standards, amendments or interpretations, effective for the first time
for the period beginning on or after 1 April 2021 have had a material impact
on the Group.
Standards, amendments and interpretations that are not yet effective and have
not been early adopted are as follows:
Standard Impact on initial application Effective date
IAS 1 Classification of liabilities as current or non-current Not earlier than 1 January 2024
IAS 1 Disclosure of accounting policies 1 January 2023
IAS 8 Accounting estimates 1 January 2023
IAS 12 Deferred tax related to assets and liabilities arising from a single 1 January 2023
transaction
IFRS 17 Insurance contracts 1 January 2023
The Directors are evaluating the impact of the new and amended standards
above. The Directors believe that these new and amended standards are not
expected to have a material impact on the financial statements of the Group
Going concern
The financial statements have been prepared on the going concern basis of
preparation which, inter alia, is based on the Directors' reasonable
expectation that the Group and Parent Company has adequate resources to
continue to operate as a going concern for at least twelve months from the
date of approval of these financial statements. In forming this assessment,
the Directors have prepared cashflow forecasts covering the period ending 31
March 2024 that take into account the likely run rate on overheads and
research and development expenditure and the estimates of the possibilities of
raising funds through issues of equity and have considered alternative
strategies should projected income be delayed or fail to materialise.
The Group is not in a position for self-financing and will require further
funding which has not yet been secured. Whilst the Directors understand the
risks and issues around raising further funds through an equity raise, this
will be carefully considered, as and when appropriate.
These circumstances indicate the existence of an inherent material
uncertainty, which may cast a significant doubt on the Group's and Parent
Company's ability to continue as a going concern, when in twelve - eighteen
months' time a thorough review of funding will be required. However, these
scenarios have already been considered and will continue to be closely
monitored by the Directors. The financial statements do not include any
adjustments that would result if the company or Group was unable to continue
as a going concern.
The Directors have carried out a thorough review of costs and are clear on the
development work to be completed. Discretionary costs have been carefully
reviewed and reduced where reasonable to do so while continuing to allow the
prudent running of the business.
After careful consideration, the Directors consider that they have reasonable
grounds to believe that the Group can be regarded as a going concern and for
this reason they continue to adopt the going concern basis in preparing the
Group's financial statements.
Critical Accounting Estimates and Judgements
The preparation of these financial statements under UK-adopted International
Accounting Standards requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting year. These estimates and assumptions are based upon management's
knowledge and experience of the amounts, events or actions. Actual results may
differ from such estimates.
The critical accounting estimates are considered to relate to the following:
Intangible assets
The Group recognises intangible assets in respect of goodwill arising on
consolidation. This recognition requires the use of estimates, judgements and
assumptions in determining whether the goodwill is impaired at each year end.
Share options
The Group's fair values equity-settled share-based payment transactions using
the Black-Scholes model. The use of the models involves judgements and
estimates including an assessment of whether the shares will vest. Should
actual future outcomes differ from these assessments the amounts recognised on
a straight-line basis would vary from those currently recognised.
Basis of consolidation
The Group's financial statements consolidate those of the parent company and
its subsidiary as of 31 March 2022. Its subsidiary has a reporting date of 31
March.
All transactions and balances between Group companies are eliminated on
consolidation, including unrealised gains and losses on transactions between
Group companies. Where unrealised losses on intra-group asset sales are
reversed on consolidation, the underlying asset is also tested for impairment
from a Group perspective. Amounts reported in the financial statements of its
subsidiary have been adjusted where necessary to ensure consistency with the
accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or
disposed of during the year are recognised from the effective date of
acquisition, or up to the effective date of disposal, as applicable.
Business combinations
The Group applies the acquisition method in accounting for business
combinations. The consideration transferred by the Group to obtain control of
a subsidiary is calculated as the sum of the acquisition-date fair values of
assets transferred, liabilities incurred and the equity interests issued by
the Group, which includes the fair value of any asset or liability arising
from a contingent consideration arrangement. Acquisition costs are expensed as
incurred.
Assets acquired and liabilities assumed are generally measured at their
acquisition-date fair values.
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable
for the sale of goods and provision of services in the ordinary course of the
Group's activities. Revenue is shown net of sales/value added tax, returns,
rebates and discounts and after eliminating sales within the Group.
The Group recognises revenue when:
• the amount of revenue can be reliably measured;
• it is probable that future economic benefits will flow to the
entity; and,
• specific criteria have been met for each of the Group activities,
such as the demonstration of milestone achievements in research or acceptance
by both parties.
Segmental information
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-makers. The chief operating
decision-makers, who are responsible for allocating resources and assessing
performance of the operating segments, has been identified as the executive
Board of Directors.
All operations and information are reviewed together so that at present there
is only one reportable operating segment.
In the opinion of the Directors, during the year the Group operated in the
single business segment of the research and development of pharmaceutical
products using technology developed by the Group.
Taxation
Taxation comprises current and deferred tax. Current tax is based on taxable
profit or loss for the period. Taxable profit differs from net profit or
loss as reported in the income statement because it excludes items of income
or expense that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Group's current tax
asset is calculated using tax rates that have been enacted or substantively
enacted at the balance sheet date.
Deferred tax is recognised on differences between the carrying amounts of
assets and liabilities in the financial information and the corresponding tax
bases used in the computation of taxable profit and is accounted for using the
balance sheet liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary difference arises
from initial recognition of goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Company is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled, or the asset realised. Deferred tax is
charged or credited to profit or loss, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and
liabilities on a net basis.
Property, plant and equipment
Property, plant and equipment is stated in the statement of financial
position at cost, less any subsequent accumulated depreciation and subsequent
accumulated impairment losses.
The cost of property, plant and equipment includes directly attributable
incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged to write off the cost of assets over their estimated
useful lives, as follows:
Asset class Depreciation method and rate
Computer equipment 33.33% straight line
Goodwill and Intangible assets
Goodwill arising on the acquisition of an entity represents the excess of the
cost of acquisition over the Group's interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities of the entity
recognised at the date of acquisition. Goodwill is initially recognised as an
asset at cost and is subsequently measured at cost less any accumulated
impairment losses. Goodwill is held in the currency of the acquired entity and
revalued to the closing rate at each reporting year date.
Goodwill is not amortised, but it is tested for impairment annually, or more
frequently if events or changes in circumstances indicate that it might be
impaired and is carried at cost less accumulated impairment losses. Gains and
losses on the disposal of an entity include the carrying amount of goodwill
relating to the entity sold.
Goodwill is allocated to cash-generating units ("CGUs") for the purpose of
impairment testing. The allocation is made to those CGUs or groups of CGUs
that are expected to benefit from the business combination in which the
goodwill arose. The Group currently has only one CGU.
Other intangible assets, including customer relationships, licences, patents
and trademarks, that are acquired by the Group and have finite useful lives
are measured at cost less accumulated amortisation and any accumulated
impairment losses.
Amortisation is provided on the Group's patents to write off the cost, less
any estimated residual value, over their expected useful economic life on a
10% straight line basis.
Impairment testing of goodwill, other intangible assets and property, plant
and equipment
For impairment assessment purposes, assets are grouped at the lowest levels
for which there are largely independent cash inflows (cash-generating units).
As a result, some assets are tested individually for impairment and some are
tested at cash-generating unit level. Goodwill is allocated to those
cash-generating units that are expected to benefit from synergies of a related
business combination and represent the lowest level within the Group at which
management monitors goodwill.
Cash-generating units to which goodwill has been allocated (determined by the
Group's management as equivalent to its operating segments) are tested for
impairment at least annually. All other individual assets or cash-generating
units are tested for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset's (or
cash-generating unit's) carrying amount exceeds its recoverable amount, which
is the higher of fair value less costs of disposal and value-in-use. To
determine the value-in-use, management estimates expected future cash flows
from each cash-generating unit and determines a suitable discount rate in
order to calculate the present value of those cash flows. The data used for
impairment testing procedures are directly linked to the Group's latest
approved budget, adjusted as necessary to exclude the effects of future
reorganisations and asset enhancements. Discount factors are determined
individually for each cash-generating unit and reflect current market
assessments of the time value of money and asset-specific risk factors.
Impairment losses for cash-generating units reduce first the carrying amount
of any goodwill allocated to that cash-generating unit. Any remaining
impairment loss is charged pro rata to the other assets in the cash-generating
unit.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other
short-term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an insignificant risk of changes in value.
Financial instruments
IFRS 9 requires an entity to address the classification, measurement and
recognition of financial assets and liabilities.
i) Classification
The Company classifies its financial assets in the following measurement
categories:
• those to be measured at amortised cost.
The classification depends on the Company's business model for managing the
financial assets and the contractual terms of the cash flows.
The Company classifies financial assets as at amortised cost only if both of
the following criteria are met:
• the asset is held within a business model whose objective is to
collect contractual cash flows; and
• the contractual terms give rise to cash flows that are solely
payment of principal and interest.
•
ii) Recognition
Purchases and sales of financial assets are recognised on trade date (that is,
the date on which the Company commits to purchase or sell the asset).
Financial assets are derecognised when the rights to receive cash flows from
the financial assets have expired or have been transferred and the Company has
transferred substantially all the risks and rewards of ownership.
iii) Measurement
At initial recognition, the Company 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.
iv) Impairment
The Company 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 Company applies the simplified
approach permitted by IFRS 9, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
Financial liabilities
The Group's financial liabilities include other payables.
Financial liabilities are initially measured at fair value, and, where
applicable, adjusted for transaction costs unless the Group designated a
financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the
effective interest method except for derivatives and financial liabilities
designated at FVTPL, which are carried subsequently at fair value with gains
or losses recognised in profit or loss (other than derivative financial
instruments that are designated and effective as hedging instruments).
All interest-related charges and, if applicable, changes in an instrument's
fair value that are reported in profit or loss are included within finance
costs or finance income.
Equity
Equity comprises the following:
• "Share capital" represents the nominal value of equity shares.
• "Share premium" represents the amount paid for equity shares over
the nominal value.
• "Reverse acquisition reserve" arises due to the elimination of the
Company's investment in Nuformix Technologies Limited.
• "Merger relief reserve" represents the share premium arising on
issue of shares in respect of the reverse acquisition takeover.
• "Share option reserve" represents the fair value of options
issued.
• "Retained earnings" represents retained earnings/losses.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed
contributions are paid into a separate entity and has no legal or constructive
obligations to pay further contributions if the fund does not hold sufficient
assets to pay all employees the benefits relating to employee service in the
current and prior years.
For defined contribution plans contributions are paid into publicly or
privately administered pension insurance plans on a mandatory or contractual
basis. The contributions are recognised as employee benefit expense when they
are due. If contribution payments exceed the contribution due for service, the
excess is recognised as an asset.
Share based payments
Equity-settled share-based payments to employees and others providing similar
services are measured at the fair value of the equity instruments at the grant
date. The fair value excludes the effect of non-market-based vesting
conditions. Details regarding the determination of the fair value of
equity-settled share-based transactions are set out in note 18.
The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based
on the Group's estimate of the number of equity instruments that will
eventually vest. At each reporting date, the Group revises its estimate of the
number of equity instruments expected to vest as a result of the effect of
non-market-based vesting conditions. The impact of the revision of the
original estimates, if any, is recognised in profit or loss such that the
cumulative expense reflects the revised estimate, with a corresponding
adjustment to reserves.
Equity‑settled share‑based payment transactions with parties other than
employees are measured at the fair value of the goods or services received,
except where that fair value cannot be estimated reliably, in which case they
are measured at the fair value of the equity instruments granted, measured at
the date the entity obtains the goods or the counterparty renders the service.
For cash‑settled share‑based payments, a liability is recognised for the
goods or services acquired, measured initially at the fair value of the
liability. At each reporting date until the liability is settled, and at the
date of settlement, the fair value of the liability is remeasured, with any
changes in fair value recognised in profit or loss for the year.
Earnings per Ordinary Share
The Company presents basic and diluted earnings per share data for its
Ordinary Shares.
Basic earnings per Ordinary Share is calculated by dividing the profit or loss
attributable to Shareholders by the weighted average number of Ordinary Shares
outstanding during the period.
Diluted earnings per Ordinary Share is calculated by adjusting the earnings
and number of Ordinary Shares for the effects of dilutive potential Ordinary
Shares.
Investment in subsidiaries
Investments in subsidiaries are carried in the Company's balance sheet at cost
less accumulated impairment losses. On disposal of investments in subsidiaries
the difference between disposal proceeds and the carrying amounts of the
investments are recognised in profit or loss.
3. Revenue
The analysis of the Group's revenue for the year from continuing operations is
as follows:
2022 2021
£ £
Rendering of services - 195,550
Licensing Fees 50,000 50,000
50,000 195,550
4. Other operating income
The analysis of the Group's other operating income for the year is as follows:
2022 2021
£ £
Miscellaneous other operating income - 1,300
5. Operating loss
Arrived at after charging
2022 2021
£ £
Depreciation expense (including lease depreciation) 519 32,058
Amortisation expense 36,457 60,994
Loss on disposal of tangible fixed assets - 6,179
Research and development expenditure 572,921 362,878
Share option and warrant charge 20,712 191,399
Details of the share-based payments can be found in Note 17.
6. Finance income and costs
2022 2021
£ £
Finance costs
Interest on lease liabilities - 3,054
Total finance costs - 3,054
7. Staff costs
The aggregate payroll costs (including directors' remuneration) were as
follows:
2022 2021
£ £
Wages and salaries 197,983 388,594
Social security costs 18,533 36,404
Pension costs, defined contribution scheme 1,721 3,870
218,237 428,868
The average number of persons employed by the Group (including directors)
during the year and analysed by category was as follows:
2022 2021
No. No.
Research and development 2 3
Non-executive directors 2 2
Total 4 5
8. Directors' remuneration
The Directors' remuneration for the year was as
follows:
2022 2021
£ £
Remuneration 197,983 311,096
Further information of warrants and options granted to the Directors is set
out in note 17.
During the year, the number of Directors who were receiving pension benefits
was as follows:
2022 2021
No. No.
Accruing benefits under money purchase pension scheme 2 2
Details of the total remuneration paid for the services of the directors are
set out in the Remuneration Report.
In respect of the highest paid director:
2022 2021
£ £
Remuneration 72,143 97,000
9. Auditors' remuneration
2022 2021
£ £
Audit of the financial statements - Group 34,000 34,000
Audit of the financial statements - Company 19,000 19,000
Audit related assurance service - 5,000
10. Income tax
Tax (credited) in the income statement
2022 2021
£ £
Current taxation
UK corporation tax (161,279) (121,020)
Adjustment in respect of prior years - (1,215)
(161,279) (122,235)
The tax on loss before tax for the year is lower than (2021: lower than) the
standard rate of corporation tax in the UK of 19% (2021: 19%).
The differences are reconciled below:
2022 2021
£ £
Loss before tax (1,270,272) (1,375,732)
Corporation tax at standard rate 19% (241,352) (261,389)
Excess of depreciation over capital allowances 6,932 7,036
Expenses not deductible 3,935 36,354
Tax losses for which no deferred tax asset was recognized 138,601 149,052
Adjustment in respect of research and development tax credit (69,396) (52,073)
Adjustment in respect of prior years - (1,215)
Total tax credit (161,279) (122,235)
No deferred tax asset has been recognised as the Directors cannot be certain
that future profits will be sufficient for this asset to be realised. As
at 31 March 2022 the Group has tax losses carried forward of approximately
£4,853,000 (2021: £4,120,000).
11. Loss per share
Loss per share is calculated based on the weighted average number of shares
outstanding during the period. Diluted loss per share is calculated based on
the weighted average number of shares outstanding and the number of shares
issuable as a result of the conversion of dilutive financial instruments.
2022 2021
£ £
Loss after tax (1,108,993) (1,253,497)
Weighted average number of shares - basic and diluted 598,447,724 580,629,372
Basic and diluted loss per share (0.19)p (0.22)p
There is no difference between the basic and diluted earnings per share as the
effect would be to decrease earnings per share.
12. Property, plant and equipment
Computer equipment
Total
£ £
Cost
At 1 April 2021 1,561 1,561
Additions - -
Disposals - -
At 31 March 2022 1,561 1,561
Depreciation
At 1 April 2021 604 604
Charge for the year 519 519
Eliminated on disposal - -
At 31 March 2022 1,123 1,123
Carrying amount
At 31 March 2022 438 438
At 31 March 2021 957 957
13. Intangible assets
Goodwill Patents Total
£ £ £
Cost
At 1 April 2021 4,023,484 449,611 4,473,095
Additions - - -
Written-off - (85,035) (85,035)
At 31 March 2022 4,023,484 364,576 4,388,060
Amortisation
At 1 April 2021 - 286,227 286,227
Amortisation charge - 36,457 36,457
On written-off - (85,035) (85,035)
At 31 March 2022 - 237,649 237,649
Net book value
At 31 March 2022 4,023,484 126,927 4,150,411
At 31 March 2021 4,023,484 163,384 4,186,868
For impairment testing purposes, management considers the operations of the
Group to represent a single cash generating unit (CGU) focused on
pharmaceutical development, targeting unmet medical needs in fibrosis and
oncology via drug repurposing. The directors have assessed the recoverable
amount of goodwill, which in accordance with IAS36 is the higher of its value
in use and its fair value less cost to sell (fair value), in determining
whether there is evidence of impairment.
As at 31 March 2022, the Group assessed the recoverable amount of the CGU with
reference to a value-in-use calculation based on cash flow projection of the
subsidiary. The calculations uses cash flow projection based on financial
budgets approved by the Directors covering a 30-year period with discount rate
of 15% assumed. The recoverable amount of the CGU based on the value-in-use
calculation exceeded its carrying amount. The Directors also assessed the
market capitalisation of the Group with reference to the share price of the
Company and supported the view that goodwill is not impaired.
14. Trade and other receivables
31 March 31 March
2022 2021
£ £
Prepayments 27,941 14,742
Other receivables 171,659 17,518
199,600 32,260
The fair value of trade and other receivables is considered by the Directors
not to be materially different to the carrying amounts.
15. Cash and cash equivalents
31 March 31 March
2022 2021
£ £
Cash at bank 464,095 1,669,780
The Directors consider that the carrying value of cash and cash equivalents
represents their fair value.
16. Share capital
Allotted, called up and fully paid shares
31 March 31 March
2022 2021
No. £ No. £
Ordinary shares of £0.001 each 615,609,368 615,609 591,609,368 591,609
No.
As at 1 April 2021 591,609,366
Placement of new shares on the stock market 24,000,000
As at 31 March 2022 615,609,368
On 17 December 2021, the company completed a capital increase through the
issue of 24,000,000 shares of £0.001 each in a share placement at a price of
£0.015 per share, with a share premium of £115,982.
17. Share options and warrants
The Group operates share-based payment arrangements to remunerate Directors
and key employees in the form of a share option scheme. Equity-settled
share-based payments are measured at fair value (excluding the effect of
non-market based vesting conditions) at the date of grant. The fair value is
determined at the grant date of the equity-settled share-based payments and is
expensed on a straight-line basis over the vesting period, based on the
Group's estimate of shares that will eventually vest and adjusted for the
effect of non- market based vesting conditions.
The following share-based payments were made in the year to 31 March 2022:
On 31 January 2022, the directors, A. Riddell. J. Gilbert and M. Kennedy were
granted warrants to subscribe for 3,000,000 new Ordinary shares of £0.001 at
an exercise price of 1.45p each. The warrants are exercisable up until 31
January 2023. The fair value of the warrants was determined using the
Black-Scholes option pricing model at 1.45p per warrant.
The fair value of the options and warrants issued in 2022 were determined
using the Black-Scholes option pricing model, where appropriate, and had a
weighted average of 2.46p per option (2021: 2.46p).
The significant inputs into the model in respect of the options and warrants
granted in the years ended 31 March 2021 and 31 March 2022 were as follows:
2022 2021
Existing director warrants Existing
director
warrants
Grant date share price 1.45-4.15p 2.5-4.15p
Exercise price 1.45-2.80p 2.8p
No. of share options 13,746,943 1,160,713
Risk free rate 0.153-0.44% 0.44%
Expected volatility 50-97% 95%
Expected option life 1-5 years 5 years
The following table sets out details of the granted warrants and options
movements:
Warrant/ option holder Number of warrants/ options at 1 April 2020 Issued in year Lapsed in year Number of warrants / options at 31 March 2021 Issued in year Lapsed in year Number of warrants/ options at 31 March 2022 Exercise price Expiry date
Directors during year
J Holland 36,860,000 - - 36,860,000 - - 36,860,000 4-10p 16/10/2022
K Keegan 3,000,000 - - 3,000,000 - (3,000,000) - 6.75p 10/05/2021
J Gilbert - - - - 3,000,000 - 3,000,000 1.45p 31/01/2023
M Kennedy - - - - 3,000,000 - 3,000,000 1.45p 31/01/2023
A Riddell - - - - 3,000,000 - 3,000,000 1.45p 31/01/2023
Previous directors
Pascal Hughes 1,625,000 - (1,625,000) 0 - - - 4p 16/10/2020
D Gooding 36,860,000 - - 36,860,000 - - 36,860,000 4-10p 16/10/2022
C Blackwell 3,000,000 - - 3,000,000 - (3,000,000) - 4p 10/05/2021
Other warrants/options
Novum Securities Limited - 580,357 - 580,357 - - 580,357 2.8p 21/10/2025
Other warrants 580,356 - 580,356 - - 580,356 2.8p 21/10/2025
Alex Eberlin - 586,229 - 586,229 - - 586,229 4.691p 18/12/2023
81,345,000 1,746,942 (1,625,000) 81,466,942 9,000,000 (6,000,000) 84,466,942
18. Pension and other schemes
Defined contribution pension sheme
The Group operates a defined contribution pension scheme. The pension cost
charge for the year represents contributions payable by the Group to the
scheme and amounted to £1,721 (2021: £3,870).
Contributions totaling £Nil (2021: £292) were payable to the scheme at the
end of the year and are included in creditors.
19. Trade and other payables
31 March 31 March
2022 2021
£
Trade payables 12,351 98,955
Accrued expenses 218,202 197,436
Social security and other taxes 7,308 2,941
Outstanding defined contribution pension costs - 292
Other payables - -
237,861 299,624
The fair value of trade and other payables is considered by the Directors not
to be materially different to the carrying amounts. All payables are due
within one year.
20. Financial instruments
Credit risk
The main credit risk relates to liquid funds held at banks. The credit risk in
respect of these bank balances is limited because the counterparties are banks
with high credit ratings assigned by international credit rating agencies.
Liquidity risk
The Group seeks to manage financial risk, to ensure sufficient liquidity is
available to meet foreseeable needs. An analysis of trade and other payables
is given in note 19.
Capital risk management
The Group's objectives when managing capital are:
• to safeguard the Group's ability to continue as a going concern,
so that it continues to provide returns and benefits for shareholders;
• to support the Group's growth; and
• to provide capital for the purpose of strengthening the Group's
risk management capability.
The Group actively and regularly reviews and manages its capital structure to
ensure an optimal capital structure and equity holder returns, taking into
consideration the future capital requirements of the Group and capital
efficiency, prevailing and projected profitability, projected operating cash
flows, projected capital expenditures and projected strategic investment
opportunities. Management regards total equity as capital and reserves, for
capital management purposes.
21. Related party transactions
All transactions with related parties are conducted on an arm's length basis.
The remuneration of the key management personnel of the Group, who are
defined as the directors, is set out in the directors' remuneration report.
Ultimate controlling party
The Directors do not consider there to be a single ultimate controlling party.
22. Post Balance Sheet Events
In December 2021 the Company entered into a Sharing Agreement with Lanstead
Capital Partners LP ("Lanstead"), split into two tranches of new shares issued
with payments to be received over a 20-month period from March 2022 to October
2023. Tranche 1 covers the period March 2022 to June 2022 and Tranche 2 runs
from July 2022 to October 2023
The agreement is structured in such a way that the proceeds received by the
Company are linked to the market price for the Company's shares. The proceeds
are calculated based on the volume-weighted average share price in the month
preceding the payment from Lanstead, compared to a target price of 2p per
share. The total proceeds based on the 2p share price are £1,650,000, with
Tranche 1 representing £330,000 of this amount.
At the time of signing the accounts the Company has received the full proceeds
from Tranche 1 at a value of £139,982 net. This is considered to be an
adjusting post balance sheet event and therefore the share issue in the year
to March 2022 has been adjusted to reflect the known proceeds.
Tranche 2 of the share issue completed in April 2022 and the proceeds are yet
to be determined as they relate to the future share price. As stated above
this will vary in accordance with the share's performance against the target
price of 2p. The issue of shares post year end is considered to be a post
balance sheet event.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR EAEXXAEEAEAARecent news on Nuformix
See all newsREG - Nuformix PLC - Half-year Report
AnnouncementREG - Nuformix PLC - Confirmation of European Orphan Drug Designation
AnnouncementREG - Nuformix PLC - Change of Registered Office and Company Secretary
AnnouncementREG - Official List - Official List Notice
AnnouncementREG - Stock Exch Notice - Admission to Trading - 22/04/2025
Announcement