REG - Nuformix PLC - Results for the period ended 30 September 2023
03/01/2024 07:15
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RNS Number : 4386Y Nuformix PLC 03 January 2024
3 January 2024
Nuformix plc
("Nuformix", the "Company" or the "Group")
Annual Results for the period ended 30 September 2023
Nuformix plc (LSE: NFX), a pharmaceutical development company targeting unmet
medical needs in fibrosis and oncology via drug repurposing, announces its
audited results for the eighteen months ended 30 September 2023 following the
change in the Company's accounting reference date from 31 March to 30
September.
Non-Executive Directors' Statement
Introduction
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.
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 develop and file patent applications on novel
crystalline forms of existing, marketed drugs, that have improved physical
properties, with the aim of developing novel products in new indications to
create 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 newly
discovered 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 (novel proprietary form of tranilast) - Idiopathic Pulmonary Fibrosis
("IPF")
NXP002 is the Group's preclinical 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, which allows
the drug to be delivered in an inhaled formulation.
IPF is a devastating lung disease associated with a higher mortality rate than
many cancers. Thus, IPF represents a high unmet medical need such that the
requirement for improved treatment options represents 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 (now off patent) achieved US$3.5bn
and US$0.8bn respectively in 2022.
Tranilast has a long history of safe use as an oral drug for asthma, keloids
and hypertrophic scarring, but there is growing evidence that supports its
potential use in other fibrotic conditions, including IPF. NXP002 is
differentiated as it is a patent protected new form of tranilast that has been
enabled for formulation and 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. Discontinuation rates for
standard-of-care IPF therapies can be as high as 80% in certain patient groups
due to their debilitating systemic side-effects.
Effective inhalation therapies offer the potential to overcome these
limitations of oral therapies. Nuformix owns granted patents protecting new
forms of tranilast, in addition to a recently filed patent protecting its use
with SoC in IPF, with patent prosecution progressing in major pharmaceutical
territories.
As a potential treatment for IPF, which is a rare disease, NXP002 is a likely
candidate for Orphan Drug Designation, which could provide additional product
protection against potential competitors. The positioning of NXP002 as an
inhaled treatment for IPF could be either as added to Standards of Care (SoCs)
or administered as a monotherapy for patients non-responsive to SoCs and those
declining these therapies due to side effects which impact quality of life.
The preclinical inhalation strategy, initiated by the Company has
significantly progressed NXP002 demonstrating:
· it can be delivered in-vivo by a range of nebulisers at the optimum
particle size for delivery to the deep lung;
· very high doses appear to be well-tolerated; and
· an in-vivo inhalation dose response was observed for inflammatory and
fibrotic biomarkers that is consistent with all ex-vivo human IPF tissue
studies to date.
The Company conducted studies in a new iteration of a 3D human IPF lung tissue
using a disease and species relevant model that has been advanced to
significantly reduce output variability. The results from these studies of
NXP002 alone and in combination with current SoC, can be summarised as
follows:
· NXP002 is well tolerated in ex-vivo human lung tissue with no signs
of toxicity events;
· NXP002 alone delivers a strong, consistent anti-fibrotic and
anti-inflammatory effect as demonstrated by modulation of the release of
multiple biomarkers of fibrosis and inflammatio
· both high and low concentrations of NXP002 show an additive
anti-fibrotic and anti-inflammatory effect to SoC;
· in particular, the higher concentrations of NXP002 with SoC's deliver
a near complete ablation of fibrosis biomarker release, yet at lower
concentrations than have been seen in other preclinical models to date; and
· the clear, pronounced additive benefit of NXP002 on top of SoCs
observed suggests that NXP002 will provide additional efficacy, even in
patients responding to SoC therapy. This raises the possibility that NXP002
targets additional disease pathways to SoC's when increasing the combined
anti-fibrotic and anti-inflammatory response.
As announced on 18 May 2023, following success in suppressing biomarkers of
fibrotic disease progression in human IPF lung tissue, the same samples were
analysed to assess additional mechanistic and anti-inflammatory benefits on
top of SoC's and the results are summarised as follows:
· NXP002 alone delivers a strong, consistent anti-inflammatory effect
as demonstrated by suppression of the release of inflammatory cytokines by
over 90% for all cytokines studied; and
· the results further suggests that NXP002 will provide additional
efficacy in combination with SoC's, even in patients responding to SoC therapy
alone.
Nuformix has developed a Target Product Profile ("TPP") that is consistent
with twice daily inhalation administration. To assess NXP002's duration of
action in relation to the TTP, the Company initiated work in an exploratory
model in healthy human lung tissue. The model also bridges the Company's
successful preclinical work across a variety of LPS-challenge studies. The
results are summarised as follows:
· NXP002 suppresses the release of inflammatory cytokines by healthy
human lung tissue following LPS challenge; and
· a strong anti-inflammatory effect remains at 12 hours post drug
dosing demonstrated by continued suppression of the release of inflammatory
cytokines following LPS challenge, confirming NXP002 has a suitable duration
of action to support its TTP of twice daily dosing.
Overall, the results further strengthen NXP002's potential for development as
a new inhaled treatment for IPF either in addition to existing therapies or as
a monotherapy. The Board continues to be encouraged by the progress of the
studies and the positive data generated to date, in particular the recent
duration of action study results and is focused on next steps which include:
· expansion of the current studies to include further human IPF tissue
donors to demonstrate the robustness of NXP002's anti-fibrotic response alone
and in SoC combinations; and
· formally commencing the NXP002 partnering process.
Post-period end on 23 October 2023, the Company announced that it was issued
with an Official Decision to Grant Notice of Allowance for Japanese National
Phase Patent Application No. 2020-555115 entitled "CRYSTALLINE TRANILAST SALTS
AND THEIR PHARMACEUTICAL USE". This patent, which has already been granted in
the US, describes proprietary new forms of the drug tranilast being progressed
by the Company as a potential novel IPF treatment. These proprietary drug
forms uniquely enable delivery via an inhaled nebulised formulation.
NXP004 (novel forms of olaparib) - Oncology
The Group discovered novel forms of olaparib, a drug currently marketed by
AstraZeneca, as Lynparza®. 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, it has secured
similar approvals in breast, pancreatic and prostate cancers with further
trials on-going. These approvals have propelled Lynparza® sales to US$2.6bn
in 2022 with industry analysts forecasting annual sales of US$9.7bn by 2028.
The Group has filed two patent applications on its novel forms of olaparib
with the potential for patent life to 2040/2041.
The Company demonstrated enhanced performance of NXP004 cocrystals compared to
olaparib. Subsequently, further preformulation studies allowed the Company to
identify lead cocrystals to be progressed for further development.
Results from in vitro dissolution studies demonstrated that the two lead
NXP004 cocrystals out-performed Lynparza®, both in terms of rate and extent
of dissolution and release of olaparib.
Enhancement of dissolution in the currently marketed formulation of Lynparza®
resulted in improved bioavailability versus the initial marketed product.
Therefore, the NXP004 programme may offer potential to further increase
olaparib bioavailability. In addition, the potential simplicity of
NXP004-based formulations may offer improvements in product cost-of-goods
versus the currently marketed product, which requires complex manufacturing
methods.
These attributes position NXP004 for applications in line-extensions for the
currently marketed product, or for possible development in future
first-to-generic products.
The Company will now consider the design and execution of suitable preclinical
pharmacokinetic models to further investigate and validate NXP004's potential
for enhancing the oral absorption of olaparib. Securing these data will enable
commencement of discussions with potential commercialisation partners.
This work will direct and support future out-licensing discussions for NXP004.
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) exclusively licensed to Oxilio for oncology
indications.
On 18 September 2023, the Company announced that Oxilio had acquired ownership
of its NXP001 patent estate for which Nuformix received new immediate and
near-term undisclosed milestone payments, whilst retaining further development
milestones and royalties capped at £2 million per year.
Fundraising
On 13 April 2023, the Company completed a subscription to raise gross proceeds
of £70,000 through a subscription for 35,000,000 new ordinary shares of 0.1
pence each in the capital of the Company (the "New Ordinary Shares") at a
price of 0.20 pence per share (the "Subscription"). The Subscription was
undertaken with a single UK-based FCA regulated institutional investor. The
New Ordinary Shares represented approximately 4.7 per cent. of the Company's
enlarged issued share capital.
In addition, the participant in the Subscription was issued with one warrant
for every one New Ordinary Share subscribed for with an exercise price of 0.25
pence per warrant. These warrants are exercisable for two years from 21 April
2023 ("Warrants"). If the Warrants are exercised in full, it would result in
the issue of an additional 35,000,000 new ordinary shares raising a further
£87,500 for the progression of the Company's business activities. The New
Ordinary Shares and Warrants were issued pursuant to the Company's existing
share issuance authorities.
The net proceeds of the Subscription are being used by the Company primarily
to further advance its NXP002 programme for the inhaled treatment of IPF.
Lanstead Subscription and Sharing Agreements
During the period the Company received proceeds from the Company's
subscription and associated sharing arrangements with Lanstead Capital
Investors L.P. ("Lanstead"), as announced on 14 December 2021, 17 January 2022
and 12 April 2022. The sharing agreements ended in October 2023, concluding
this arrangement and the Company is due no further funds from Lanstead.
Business Development
During the period the Company has switched its focus to business development
activities to explore partnering opportunities for both its NXP002 and NXP004
programmes, attending both the European Respiratory Conference in Milan and
the IPF Summit in Boston. Those partnering activities are ongoing.
Summary and Outlook
The strategy of the Group is to continue to optimise value from its existing
assets while maintaining tight control of costs. The proceeds from the
Lanstead Sharing Agreements, the April 2023 fundraise proceeds and the
milestone payment received from Oxilio in September 2023 and post-period in
December 2023 have enabled the Group to continue to advance and exploit the
current assets within the portfolio through selective additional R&D and
business development activities as set out above. The Group is conducting
business development/licensing activities for all its assets using a
structured and data-driven approach, with the goal of seeking global licensing
deals. Our focus and emphasis is to progress our NXP002 and NXP004 programmes
where required to complete licensing transactions and achieve value creation
to generate a 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
Madeleine Kennedy
Non-Executive
Chairman
Non-Executive Director
2 January 2024
2 January 2024
Enquiries:
Nuformix plc
Dr Dan Gooding, Executive Director Via IFC Advisory
Stanford Capital Partners Limited
Tom Price / Patrick Claridge (Corporate Finance) +44 (0) 20 3650 3650
Bob Pountney (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 period of these accounts 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 on page 6. 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 December 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
or a fundraising. The proceeds from the Lanstead sharing agreements ended in
October 2023
· 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
The ability of the Group to quickly adapt to external events such as a
pandemic 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 18 of the financial statements.
Financial Highlights
· Net assets at year-end (18 months) of £4,195,033 (2022: £4,737,962)
which includes £202,548 cash at bank (2022: £464,095)
· The Group delivered a loss on ordinary activities (after tax credit)
for the 18 months of £859,467 (2022: loss of £1,108,993) and a loss per
share of 0.12p (2022: 0.19p). The reported loss is driven mainly by costs
related to the further development of pipeline assets
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 30
September 2023 cash balances totalled £202,548 (2022: £464,095). 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 18 of the financial statements.
· Revenue from agreements:
During the period of these accounts, the revised Oxilio agreement has provided
Nuformix with new immediate and near-term undisclosed milestone payments.
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 period of these accounts the Group continued to prioritise
the development of NXP002, its inhaled candidate for the treatment for IPF,
and generated further preclinical data. The Group firstly initiated further
preclinical studies confirming preclinical tolerability across a new range of
higher doses than previously studied following inhalation of a new nebulised
formulation. In response to intelligence gathered following the attendance of
key conferences, the Group switched its research focus onto further
investigations of NXP002 in combination with current IPF standards of care
(SoC) and demonstration of NXP002's duration of action.
This was achieved via new studies in 3D human lung tissue, firstly using a
disease and species relevant IPF model, focusing on NXP002 in combination with
current SoC. Advancements within this model were designed to significantly
reduce output variability. The results continued to confirm that NXP002 is
well tolerated in ex-vivo human lung tissue with no signs of toxicity events
and that NXP002 alone delivers a strong, consistent anti-fibrotic effect as
demonstrated by modulation of the release of multiple biomarkers of fibrosis.
Furthermore, both high and low concentrations of NXP002 show an additive
anti-fibrotic effect to SoC. In particular, the higher concentrations of
NXP002 with SoC's deliver a near complete ablation of fibrosis and
inflammation biomarker release, yet at lower concentrations than have been
seen in other preclinical models to date.
The results indicated that the clear, pronounced additive benefit of NXP002 on
top of SoCs observed offers the potential for additional IPF treatment
efficacy, even in patients responding to SoC therapy. The results also
raised the possibility that NXP002 targets additional disease pathways to
SoC's when increasing the combined anti-fibrotic response.
Lastly, the Group initiated work using an exploratory healthy human lung
tissue model to investigate NXP002's duration of action. Demonstration of a
prolonged duration of action is essential in the development of inhaled
therapies, whose clearance from the lung can be rapid. Therapies requiring
multiple (more than two) daily uses of inhalation devices for effective
treatment are less attractive and suffer reduced patient compliance, even in
life-threatening conditions such as IPF. Therefore, Nuformix has developed a
TPP that is consistent with twice daily inhalation administration.
The exploratory model involves an LPS challenge to healthy human lung tissue,
offering numerous advantages in terms of species relevance and the ability to
control tissue exposure to drug. The model also bridges the Company's previous
successful preclinical work across a variety of LPS-challenge studies. It was
found that NXP002 suppresses the release of inflammatory cytokines by healthy
human lung tissue following LPS challenge. This effect was seen at one hour
post treatment with NXP002, suggesting only a short time is required for lung
tissue penetration and activity. In addition, a strong anti-inflammatory
effect remained at 12 hours post drug dosing demonstrated by suppression of
the release of inflammatory cytokines following
LPS challenge, confirming NXP002 has a suitable duration of action. Lastly,
results indicated that anti-inflammatory effect was still observed at 24 hours
post removal of drug.
Overall, the combined data generated gives the Group confidence in NXP002's
potential as an inhaled therapy for IPF treatment and allows the telling of a
more complete preclinical story to potential licensing partners for the first
time. The Group continues to pursue opportunities to share this important new
data with key players in the rare disease and respiratory disease sectors as
it explore all opportunities to progress the NXP002 programme.
NXP001: On 18 September 2023, the Company announced Oxilio had acquired
ownership of its NXP001 patent estate for which Nuformix received new
immediate and near-term undisclosed milestone payments, whilst retaining
further development milestones and royalties capped at £2 million per year.
NXP004: During the period of these accounts, the Group continued to perform
preclinical studies investigating the enhanced performance of NXP004
cocrystals compared to various forms of olaparib. Pre-formulation studies
were first completed confirming the superiority of the Group's recently
patented cocrystal forms, allowing lead cocrystals to be identified and
progressed to further drug product development studies.
The Group initiated in-vitro dissolution performance studies for its lead
cocrystals compared to the marketed Lynparza® tablet product using a
biologically relevant dissolution design and with drug loading relevant to
human dosing. The results demonstrated that the two lead NXP004 cocrystals
selected out-perform Lynparza®, both in terms of rate and extent of
dissolution and release of olaparib.
Enhancement of dissolution in the currently marketed formulation of
Lynparza® resulted in improved bioavailability versus the initial marketed
product. Therefore, the NXP004 programme may offer potential to further
increase olaparib bioavailability. In addition, the potential simplicity of
NXP004-based formulations may offer improvements in product cost-of-goods
versus the currently marketed product, which requires complex manufacturing
methods. These attributes position NXP004 for applications in line-extensions
for the currently marketed product, or for possible development in future
first-to-generic products. The Company has commenced discussions
with potential commercialisation partners.
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 period of these accounts. 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 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, on pages 9 to 15 of the Annual Report.
· Corporate governance, on pages 17 to 22 of the Annual Report,
including how governance supported the delivery of our strategic objectives in
this period.
Carbon Reporting
The Group has opted not to include any Streamlined Energy and Carbon Reporting
(SECR) within this report as it does not meet the Large Company threshold or
energy consumption threshold requiring additional reporting.
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
Kreston Reeves LLP were appointed as auditors in the period, and a resolution
to reappoint Kreston Reeves LLP as auditors will be presented to the members
at the Annual General Meeting in accordance with Section 485(2) of the
Companies Act 2006.
On behalf of the board,
Dr Julian Gilbert
Madeleine Kennedy
Non-Executive Director
Non-Executive Director
2 January 2024
2
January 2024
Independent Auditor's Report
to the Shareholders of Nuformix plc
For the period ended 30 September 2023
Opinion
We have audited the financial statements of Nuformix PLC (the 'parent
company') and its subsidiaries (the 'Group') for the year ended 30 September
2023 which comprise the consolidated income statement, consolidated statement
of comprehensive income, consolidated and company statements of financial
position, consolidated and company statements of changes in equity,
consolidated statements of cashflow 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 International Financial Reporting Standards (IFRSs) as adopted by the
United Kingdom in accordance with the provisions of the Companies Act 2006.
In our opinion, the financial statements:
· give a true and fair view of the state of the Group's and of the parent company's affairs as at 30 September 2023 and of the Group's loss for the year then ended;
· have been properly prepared in accordance with IFRSs adopted by the United Kingdom; 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 relating to going concern
We draw attention to note 2 in the financial statements, which indicates that
there is a significant material uncertainty in relation to the going concern
status of the group.
Nuformix is a pharmaceutical development company that has undertaken
significant research into targeting the pharmaceutical product gap needs in
fibrosis and oncology via drug repurposing. In order to complete this work,
the company will need to expend significant, and currently unquantifiable,
amounts that will be in excess of the cash held at the balance sheet date of
£203k (2022: £464k).
Given the stage in the business life cycle the Group is incurring significant
losses at present, totalling to £859k in the 18-month period ended 30
September 2023 (2022: year ended loss of £1,109k) resulting in the group's
accumulated losses at the balance sheet date of £8,209k (2022: accumulated
losses of £7,350k). These losses are attributable to the ongoing drug
research programme which is yet to reach commercial production stage where
revenue could potentially be generated. The Group is therefore not in a
position to self-finance and will require additional external funding which,
at the date of this audit report, is unknown in quantum and not secured.
Additionally, the ultimate likelihood of the development work being undertaken
resulting in an effective product that is commercially viable is also unknown
at this stage.
As a result of the material uncertainty with respect to going concern, we have
completed the following audit work as part of our evaluation of going concern:
· Overheads and debt costs assumptions - we considered projected
overheads for the 2023/24 and 2024/25 periods to ensure that these were
reasonable after considering both the current and expected future profile of
the business moving forward. As part of this future profiling, the
non-executive directors have elected not to take payment of their salaries
until such time as the business holds sufficient funds to enable them to do
so.
· Credit / cash control management assumptions - we identified within
the forecasting the most significant cash inflows and ensured that the
valuation and timing of these were reasonable.
· We performed sensitivity analysis to assess the level of working
capital headroom should key assumptions be less favourable than assumed in
management's model.
· We considered post year end performance data available, including the
group's future commitments, to gain additional assurance over the
effectiveness of management's plans to ensure the Company and Group remain a
going concern.
Based on the work we have performed we have gained sufficient assurance in
order to rely on management's forecasting in forming our assessment. We have
also gained assurance over the credibility of management's budgeting strategy
over the next 12 months.. This included gaining assurance over the adequacy of
working capital available in order to settle external liabilities as they fall
due. With respect to further funding of development we have reviewed the
director's assessment that they can raise the funding required in the
near-term through future share capital raises.
However, whilst we have evaluated future cash inflows as reasonable for
meeting current working capital needs, there is significant uncertainty
surrounding the ultimate quantum and timing of funding required to reach the
production stage and indeed the likelihood this stage will ever be reached.
Should all or part of this funding not be received or one or both of their
core projects NXP002 and NXP004 not succeed the valuation of the group's
goodwill £4,023,484 (2022: £4,023,484), the parent company's valuation of
the subsidiary investment £4,023,484 (2022: £4,023,484), the group's
carrying value of other intangible assets £57,793 (2022: £126,927) and
ultimately the going concern assessment of the Group would be adversely
affected.
Management will continue to reduce non-essential costs in the 2024 financial
period and has signed an agreement to sell the ownership of the NXP001 patent
estate, which allows them to focus on NXP002 and NXP004. As part of this
agreement two milestone payments have been achieved and received in the bank
since the year end. However, there are further larger milestone payments due,
which are unlikely to be received into the bank in the foreseeable future.
The above indicates that a significant material uncertainty exists with
respect to going concern. However, as we have obtained sufficient assurance
over the availability of financial resources to settle liabilities as they
fall due over a period of at least the next 12 months, our opinion is not
modified in respect of this matter.
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 judgements, 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.
Group revenue Group profit/(loss) before tax Group net assets
Full statutory audit (Kreston Reeves) 100% 100% 100%
Limited procedures 0 0 0
Totals at 30 September 2023: 100% 100% 100%
We tailored the scope of our audit to ensure that we performed sufficient work
to be able to give an opinion on the financial statements as a whole, taking
into account the structure of the Group and the parent company, the accounting
processes and controls, and the industry in which they operate.
Our scoping considerations for the Group audit were based both on financial
information and risk. As noted above limited assurance audit work - which is
to say the audit of balances and transactions material at a group level - was
not utilised due to statutory audit requirements of all group entities. The
below table summarises for the parent company and its subsidiaries, the level
of assurance gained:
Group component Level of assurance
Nuformix PLC Full statutory audit (Kreston Reeves LLP)
Nuformix Technologies Limited Full statutory audit (Kreston Reeves LLP)
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. This is not a complete list of
all risks identified by our audit.
Impairment of goodwill / Valuation of investment: How our audit addressed the key risk
Significance and nature of key risk
During the course of the audit, we undertook the following key procedures:
The Group has significant goodwill generated from an investment in subsidiary
of £4,023,484. In addition, the parent company holds an equal investment
value of £4,023,484 on it's company balance sheet relating to the same · assessing the appropriateness of the VIU calculations used by the
subsidiary. management to estimate recoverable amount of CGU;
· reconciling key input data applied in the VIU calculations to
reliable supporting evidence; and
We identified there was a risk in relation to the impairment on the goodwill /
investment held with regards to the trading subsidiary. · challenging the reasonableness of key assumptions based on our
knowledge and understanding of the business and industry.
· Reviewed management's plan of future operating cashflows of the
Management's assessment of the recoverable amount of investment in a subsidiary; and
subsidiary requires estimation and judgement around assumptions used,
including the cash flows to be generated from the continuing operations of the · obtaining evidence of the commercial and technical feasibility of the
subsidiary. Changes to assumptions could lead to material changes in the patents owned by the subsidiary.
estimated recoverable amount, impacting the value of investment in the
subsidiary and impairment charges.
There were also other procedures which are not deemed to be key and have
therefore not been listed above.
For the purpose of assessing impairment on goodwill arising from business
combination, goodwill is allocated to a single cash generating units ('CGU')
and the recoverable amount of the CGU was determined with reference to
value-in-use (the 'VIU') calculations using cash flow projections. In carrying Based on the audit work performed, we are satisfied with management's
out the impairment assessment, significant management judgement was used to valuation of goodwill and investment as featured within these financial
determine the key assumptions underlying the VIU calculations. statements.
We have identified the above matter as a key audit matter because goodwill is
material to the Group and the valuation of the investment is material to the
parent company. 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.
Key observations communicated to the Audit & Risk Committee
We have no significant concerns over the material accuracy of valuation /
impairment of investment values recognised in the financial statements.
Our application of materiality
Group financial statements Parent company financial statements
Overall Materiality £98,100 £95,300
How we determined it 2% of Group gross assets 2% of Company gross assets
Rationale for benchmark The group is focused on the development of its Intellectual Property (IP) and The parent company is principally holding subsidiary investment. The users of
the assets held in order to finance the continuing development of this IP. As the financial statements will be most concerned with the value of investment.
such, the most appropriate basis for the group financial statements is gross As such, the most appropriate basis for the parent company materiality is
assets. gross assets.
We reported all audit differences found in excess of our triviality threshold
of £4,900 to the directors and the management board 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 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, 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 our knowledge and understanding of the Group and parent
company 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 parent company,
or returns adequate for our audit have not been received from branches not
visited by us; or
· the parent company financial statements 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 (set out
on pages 29 and 30), 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 and parent company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to
liquidate the Group or parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud.
Based on our understanding of the group and industry, and through discussion
with the directors and other management (as required by auditing standards),
we identified that the principal risks of non-compliance with laws and
regulations related to health and safety, anti-bribery and employment law. We
considered the extent to which non-compliance might have a material effect on
the financial statements.
We also considered those laws and regulations that have a direct impact on the
preparation of the financial statements such as the Companies Act 2006,
taxation and pension legislation. We communicated identified laws and
regulations throughout our team and remained alert to any indications
of non-compliance throughout the audit.
We evaluated management's incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override of
controls) and determined that the principal risks were related to posting
inappropriate journal entries to increase revenue or reduce expenditure and
management bias in accounting estimates and judgemental areas of the financial
statements such as the valuation of intangible assets and investments. Audit
procedures performed by the group engagement team included:
· Discussions with management and assessment of known or
suspected instances of non-compliance with laws and regulations and fraud, and
review of the reports made by management; and
· Assessment of identified fraud risk factors; and
· Challenging assumptions and judgements made by management in
its significant accounting estimates; and
· Performing integrity testing to verify the legitimacy of
banking records obtained from management; and
· Performing analytical procedures to identify any unusual or
unexpected relationships, including related party transactions, that may
indicate risks of material misstatement due to fraud; and
· Confirmation of related parties with management, and review
of transactions throughout the period to identify any previously undisclosed
transactions with related parties outside the normal course of business; and
· Performing analytical procedures with automated data
analytics tools to identify any unusual or unexpected relationships, including
related party transactions, that may indicate risks of material misstatement
due to fraud; and
· Reading minutes of meetings of those charged with governance,
reviewing internal audit reports and reviewing correspondence with relevant
tax and regulatory authorities; and
· Review of significant and unusual transactions and evaluation
of the underlying financial rationale supporting the transactions.
There are inherent limitations in the audit procedures described above and the
further removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less likely we
would become aware of it. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion.
As part of an audit in accordance with ISAs (UK), we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
· Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
· Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group's internal control.
· Evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related disclosures made by the
directors.
· Conclude on the appropriateness of the directors'
use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group's or the parent
company's ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our
auditor's report to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor's report.
However, future events or conditions may cause the Group or the parent company
to cease to continue as a going concern.
· Evaluate the overall presentation, structure and content of
the financial statements, including the disclosures, and whether the financial
statements represent the underlying transactions and events in a manner that
achieves fair presentation.
· Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within the Group
to express an opinion on the consolidated financial statements. We are
responsible for the direction, supervision and performance of the Group audit.
We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Use of our Report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Anne Dwyer BSc(Hons) FCA (Senior Statutory Auditor)
For and on behalf of
Kreston Reeves LLP
Chartered Accountants
Statutory Auditor
London
Date: 2 January 2024
Consolidated Statement of Comprehensive Income
for the Period Ended 30 September 2023
Note Period ended Year ended
30 September 31 March
2023 2022
£ £
Revenue 3 - 50,000
Cost of sales - (1,695)
Gross profit - 48,305
Administrative expenses (927,972) (1,318,577)
Operating loss 4 (927,972) (1,270,272)
Loss before tax (927,972) (1,270,272)
Income tax credit 8 68,505 161,279
Loss for the year and total comprehensive loss for the year (859,467) (1,108,993)
Loss per share - basic and diluted 9 (0.12)p (0.19)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 30 September 2023
Registration number: 09632100
30 September 31 March
Note 2023 2022
£ £
Assets
Non-current assets
Property, plant and equipment 10 - 438
Intangible assets 11 4,081,277 4,150,411
4,081,277 4,150,849
Current assets
Trade and other receivables 12 66,857 199,600
Income tax asset 67,342 161,279
Cash and cash equivalents 13 202,548 464,095
336,747 824,974
Total assets 4,418,024 4,975,823
Equity and liabilities
Equity
Share capital 14 744,309 615,609
Share premium 6,656,802 6,500,817
Merger relief reserve 10,950,000 10,950,000
Reverse acquisition reserve (8,005,195) (8,005,195)
Share option reserve 2,058,518 2,026,664
Retained earnings (8,209,400) (7,349,933)
Total equity 4,195,034 4,737,962
Current liabilities
Trade and other payables 17 222,990 237,861
222,990 237,861
Total equity and liabilities 4,418,024 4,975,823
These financial statements were approved by the board on 2 January 2024 and
signed on its behalf by:
Madeleine Kennedy
Director
The accompanying notes to the financial statements form an integral part of
the financial statements.
Consolidated Statement of Changes in Equity
for the Period Ended 30 September 2023
Reverse acquisition
Merger relief reserve reserve Share option reserve Retained earnings
Share premium £ £ £ £ Total
Share capital
£ £
£
At 1 April 2022 615,609 6,500,817 10,950,000 (8,005,195) 2,026,664 (7,349,933) 4,737,962
Loss for the year and total comprehensive loss - - - - - (859,467) (859,467)
Issue of share capital 128,700 160,285 - - - - 288,985
Share issue costs - (4,300) - - - - (4,300)
Share and warrant based payment - - - - 31,854 - 31,854
At 30 September 2023 744,309 6,656,802 10,950,000 (8,005,195) 2,058,518 (8,209,400) 4,195,034
Reverse
Merger relief reserve acquisition Share option reserve Retained
Share capital Share premium £ reserve £ earnings Total
£ £ £ £ £
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
The accompanying notes to the financial statements form an integral part of
the financial statements.
Consolidated Statement of Cash Flows
for the Period Ended 30 September 2023
30 September 31 March
2023 2022
Note £ £
Cash flows from operating activities
Loss for the year (859,467) (1,108,993)
Adjustments to cash flows from non-cash items
Profit on Sale of intangibles (35,552) -
Depreciation and amortisation 10,11 55,124 36,976
Income tax credit 8 (68,505) (161,279)
Share and warrant based payment 31,854 20,712
(876,546) (1,212,584)
Working capital adjustments
(Increase)/Decrease in trade and other receivables 12 132,743 (167,340)
(Decrease)/Increase in trade and other payables 17 (14,870) (86,763)
Cash consumed by operations (708,674) (1,466,687)
Income taxes received 162,442 121,020
Net cash used in operating activities (546,232) (1,345,667)
Cash flows from investing activities
Proceeds from sale of intangibles 50,000 -
Net cash from investing activities 50,000 -
Cash flows from financing activities
Issue of shares (net of costs) 284,685 139,982
Net cash from financing activities 284,685 139,982
Net increase/(decrease) in cash and cash equivalents (261,547) (1,205,685)
Cash and cash equivalents at 1 April 2022 464,095 1,669,780
Cash and cash equivalents at 30 September 2023 202,548 464,095
The accompanying notes to the financial statements form an integral part of
the financial statements
Notes to the Consolidated Financial Statements
for the Period Ended 30 September 2023
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.
The company extended its accounting period from 31 March 2023 to 30 September
2023 to allow sufficient time to appoint new auditors. Due to this change the
current year figures included in the statement of comprehensive income,
statement of cash flows and related notes represent 18 months of transactions
in comparison to the 12 months represented in the previous period by the
comparative.
2. Summary of Significant Accounting policies
Basis of preparation
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 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 2022 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
Supplier finance
IFRS 7
1 January 2024
Leases on sale and leaseback
IFRS 16 1 January 2024
IFRS 17 Insurance contracts 1 January 2023
IAS 21 Lack of exchangeability 1 January 2025
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
December 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. In addition, the non-executive directors have
elected not to take payment of their salaries until such time as the business
holds sufficient funds to enable them to do so.
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:
i) 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,
using a NPV calculation assuming a 20% discount rate.
ii) 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. The total
charge in the period to 30 September 2023 was £31,854.
iii) Basis of consolidation
The Group's financial statements consolidate those of the parent company and
its subsidiary as of 30 September 2023. Its subsidiary has a reporting date of
30 September.
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.
iv) 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.
v) 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.
After applying the above criteria, no revenue was recognised in the Income
Statement in the period.
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 17.
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:
30 Sep 2023 31 March
£ 2022
£
Licensing Fees - 50,000
- 50,000
4. Operating loss
Arrived at after charging
30 Sep 31 March
2023 2022
£ £
Depreciation expense 438 519
Amortisation expense 54,686 36,457
Profit on disposal of intangible fixed assets 35,552 -
Research and development expenditure 245,101 572,921
Share option and warrant charge 31,854 20,712
Details of the share-based payments can be found in Note 15.
5. Staff costs
The aggregate payroll costs (including directors' remuneration) were as
follows:
30 Sep 31 March
2023 2022
£ £
Wages and salaries 141,833 197,983
Social security costs 7,112 18,533
Pension costs, defined contribution scheme - 1,721
148,945 218,237
The average number of persons employed by the Group (including directors)
during the year and analysed by category was as follows:
30 Sep 31 March
2023 2022
No. No.
Research and development 1 3
Non-executive directors 2 2
Total 3 5
6. Directors' remuneration
The Directors' remuneration for the year was as
follows:
30 Sep 31 March
2023 2022
£ £
Remuneration 141,833 197,983
Share based payment charge 19,474 3,895
161,307 201,878
Further information about the remuneration of individual directors are
provided in the Directors' Remuneration Report.
During the year, the number of Directors who were receiving pension benefits
was as follows:
30 Sep 31 March
2023 2022
No. No.
Accruing benefits under money purchase pension scheme - 2
Details of the total remuneration paid for the services of the directors are
set out on pages 23 to 27 in the Remuneration Report section of the Annual
Report.
In respect of the highest paid director:
30 Sep 31 March
2023 2022
£ £
Remuneration 44,500 72,143
7. Auditors' remuneration
30 Sep 31 March
2023 2022
£ £
Audit of the financial statements - Group 37,000 34,000
Audit of the financial statements - Subsidiary 18,000 19,000
8. Income tax
Tax (credited) in the income statement
30 Sep 31 March
2023 2022
£ £
Current taxation
UK corporation tax (67,342) (161,279)
Adjustment in respect of prior years (1,163) -
(68,505) (161,279)
The tax on loss before tax for the period is higher than (2022: lower than)
the standard rate of corporation tax in the UK of 25% (2022: 19%).
The differences are reconciled below:
30 Sep 31 Mar
2023 2022
£ £
Loss before tax (927,972) (1,270,272)
Corporation tax at standard rate 19% (176,315) (241,352)
Excess of depreciation over capital allowances 3,611 6,932
Expenses not deductible 45 3,935
Tax losses for which no deferred tax asset was recognised 135,025 138,601
Adjustment in respect of research and development tax credit (29,708) (69,396)
Adjustment in respect of prior years (1,163) -
Total tax credit (68,505) (161,279)
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 30 September 2023 the Group has tax losses carried forward of approximately
£5,535,000 (2022: £4,853,000).
8. Income Tax (cont.)
Factors that may affect future tax charges
Since 1 April 2017 there has been a single rate of corporation tax of 19% in
place. From 1 April 2023, the main rate of corporation tax will rise to 25%
for companies with profits over £250,000. For companies with profits of
£50,000 or less, they will pay corporation tax at the small profits rate of
19%. Where a company's profits fall between £50,000 and £250,000, they will
pay corporation tax at the main rate reduced by marginal relief. The upper and
lower limits will be proportionally reduced for short accounting periods and
where there are associated companies.
9. 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.
30 Sep 31 March
2023 2022
£ £
Loss after tax (859,467) (1,108,993)
Weighted average number of shares - basic and diluted 719,462,470 598,447,724
Basic and diluted loss per share (0.12)p (0.19)p
There is no difference between the basic and diluted earnings per share as the
effect would be to decrease earnings per share.
10. Property, plant and equipment
Computer equipment
Total
£ £
Cost
At 1 April 2022 1,561 1,561
Disposals (1,561) (1,561)
At 30 September 2023 - -
Depreciation
At 1 April 2022 1,123 1,123
Charge for the year 438 438
Eliminated on disposal (1,561) (1,561)
At 30 September 2023 - -
Carrying amount
At 30 September 2023 - -
At 31 March 2022 438 438
11. Intangible assets
Goodwill Patents Total
£ £ £
Cost
At 1 April 2022 4,023,484 364,576 4,388,060
Additions - - -
Disposals - (72,915) (72,915)
At 30 September 2023 4,023,484 291,661 4,315,145
Amortisation
At 1 April 2022 - 237,649 237,649
Amortisation charge - 54,686 54,686
On disposals - (58,467) (58,467)
At 30 September 2023 - 233,868 233,868
Net book value
At 30 September 2023 4,023,484 57,793 4,081,277
At 31 March 2022 4,023,484 126,927 4,150,411
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 30 September 2023, 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 use cash flow projection based on financial
budgets approved by the Directors covering a 30-year period with a discount
rate of 20% 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.
12. Trade and other receivables
30 Sep 31 March
2023 2022
£ £
Prepayments 17,919 27,941
Other receivables 48,938 171,659
66,857 199,600
The fair value of trade and other receivables is considered by the Directors not to be materially different to the carrying amounts.
13. Cash and cash equivalents
30 Sep 31 March
2023 2022
£ £
Cash at bank 202,548 464,095
The Directors consider that the carrying value of cash and cash equivalents
represents their fair value.
14. Share capital
Allotted, called up and fully paid shares
31 Sep 31 March
2023 2022
No. £ No. £
Ordinary shares of £0.001 each 744,309,368 744,309 615,609,368 615,609
No.
As at 1 April 2022 615,609,368
Placement of new shares on the stock market 128,700,000
As at 30 September 2023 744,309,368
On 11 April 2022 and 21 April 2023, the company completed capital increases
through the issue of 128,700,000 shares of £0.001 each in share placements,
with an overall share premium of £160,285.
15. 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 30 September 2023:
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
November 2024. 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 (2022: 2.46p).
The significant inputs into the model in respect of the options and warrants
granted in the periods ended 31 March 2022 and 30 September 2023 were as
follows:
2023 2022
Existing director warrants Existing
director
warrants
Grant date share price 1p 1.45-4.15p
Exercise price 1.45p 1.45-2.80p
No. of share options 9,000,000 13,746,943
Risk free rate 0.153% 0.153-0.44%
Expected volatility 97% 50-97%
Expected option life 3 years 1-5 years
The following table sets out details of the granted warrants and options
movements:
Warrant/ option holder Number of warrants / options at 31 March 2021 Issued in year Lapsed in year Number of warrants/ options at 31 March 2022 Issued in period Lapsed in peiod Number of warrants/ options at 30 September 2023 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) - - - - 6.75p 10/05/2021
J Gilbert - 3,000,000 - 3,000,000 - - 3,000,000 1.45p 23/11/2024
M Kennedy - 3,000,000 - 3,000,000 - - 3,000,000 1.45p 23/11/2024
A Riddell - 3,000,000 - 3,000,000 - - 3,000,000 1.45p 23/11/2024
Previous directors
D Gooding 36,860,000 - - 36,860,000 - (36,860,000) - 4-10p 16/10/2022
C Blackwell 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
Other warrants (2023) - - - - 35,000,000 - 35,000,000 0.2p 17/04/2025
Alex Eberlin 586,229 - - 586,229 - - 586,229 4.691p 18/12/2023
81,466,942 9,000,000 (6,000,000) 84,466,942 35,000,000 (73,720,000) 45,746,942
16. Pension and other schemes
Defined contribution pension scheme
The Group operates a defined contribution pension scheme. The pension cost
charge for the year represents contributions payable by the Group to the
scheme. No contributions were made in the period to 30 September 2023 (2022:
£1,721).
No contributions were payable to the scheme at 30 September 2023 or 31 March
2022.
17. Trade and other payables
30 Sep 31 March
2023 2022
£
Trade payables 69,774 12,351
Accrued expenses 152,043 218,202
Social security and other taxes 1,174 7,308
222,991 237,861
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.
18. 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 17.
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.
19. 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.
20. Ultimate controlling party
The directors do not consider there to be a single ultimate controlling party.
21. Post Balance Sheet Events
The directors do not consider that any events after the balance sheet event
give rise to adjusting or non-adjusting events and therefore no adjustments or
disclosure are required.
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