REG - Polarean Imaging PLC - Final Results
18/05/2022 07:00
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RNS Number : 8481L Polarean Imaging PLC 18 May 2022
18 May 2022
Polarean Imaging Plc
("Polarean" or the "Company")
Final results for the year ended 31 December 2021
Notice of Annual General Meeting
Polarean Imaging plc (AIM: POLX), the medical‑imaging technology company
with an investigational drug‑device combination product using hyperpolarised
(129)xenon gas to enhance magnetic resonance imaging (MRI) in pulmonary
medicine announces its audited final results for the year ended 31 December
2021.
In addition, Polarean confirms that the Annual Report and Accounts for the
year ended 31 December 2021, the Notice of the Annual General Meeting ("AGM")
and a Form of Proxy are now available on the Company's website
(http://www.polarean-ir.com/content/investors/annual-reports.asp
(http://www.polarean-ir.com/content/investors/annual-reports.asp) ) and will
be posted to shareholders shortly.
Polarean's AGM will be held at 2500 Meridian Parkway, Suite 175, Durham, NC
27713, USA at 2 p.m. BST / 9 a.m. EST on Wednesday 29 June 2022.
Highlights
- Raised £27 million (US$37.1 million) gross proceeds in an
oversubscribed financing in April 2021, including continued support of
strategic investors, Bracco Imaging S.p.A and Nukem Isotopes GmbH as well as
institutional investor Amati AIM VCT plc, joined by several new UK and US
institutional investors
- Sale and installation of two new Polarean
9820 Xenon Polariser systems to each of the University of Texas MD Anderson
Cancer Center and the University of British Columbia BC Children's Hospital
- Appointment of Charles ("Chuck") Osborne, Chief Financial Officer,
to the Board
- Publication of first peer-reviewed COVID-19 research using
hyperpolarised xenon MRI to observe longer-term lung damage after COVID-19
infection by Professor Fergus Gleeson at the University of Oxford
- Net cash of US$28.9 million as of 31 December 2021, which, based on
strategic decisions, could finance the company into 2024
Post-period end
- Successful re-submission of New Drug Application (NDA) to the FDA
following the Complete Response Letter (CRL) received in October 2021, with an
established user fee goal date of 30 September 2022
- Further new research system orders from McMaster University in
Ontario, Canada and Cincinnati Children's Medical Center
- Appointment of Frank Schulkes and Dan Brague to the Board as
Non-Executive Directors
- Appointment of Ken West as Non-Executive Chairman, following the
retirement of Jonathan Allis
- Research collaboration with Oxford University Hospitals NHS Trust
for long-COVID
Richard Hullihen, CEO of Polarean, said: "In the first half of 2021 we
completed our largest financing to date with an oversubscribed £27 million
gross proceeds placing, subscription and open offer. We welcomed several
significant new institutional investors and continued to receive excellent
support from our existing strategic, institutional and retail investors.
"We spent much of the year gearing towards our anticipated FDA approval,
although the FDA confirmed in October that they were unable to approve the NDA
in its current form due to some technical or manufacturing-related issues
centred around the xenon hyperpolariser system. We worked hard with
consultants and collaborators to thoroughly address the items raised and
successfully resubmitted our application post-period end, in March 2022. We
now have an established user fee goal date of 30 September 2022 and will
continue to focus our efforts on building our commercial organisation to
support a successful launch upon FDA approval.
We continue to identify exciting opportunities in the areas of COVID-19,
cardiology and pulmonary vascular disease and these prospects should expand
the use of the Company's technology in the future. Although the delay in FDA
approval is disappointing, we are using this time to continue to explore
potential future applications for our technology. On behalf of the Board and
the whole Polarean team, I would like to extend my thanks to our shareholders
for all their support and we look forward to a very positive year ahead."
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) 596/2014.
Enquiries:
Polarean Imaging plc www.polarean.com / www.polarean-ir.com
Richard Hullihen, Chief Executive Officer Via Walbrook PR
Ken West, Chairman
Stifel Nicolaus Europe Limited (NOMAD and Sole Corporate Broker) +44 (0)20 7710 7600
Nicholas Moore / Samira Essebiyea / William Palmer-Brown (Healthcare
Investment Banking)
Nick Adams / Fred Walsh (Corporate Broking)
Walbrook PR Tel: +44 (0)20 7933 8780 or polarean@walbrookpr.com
Anna Dunphy / Phillip Marriage Mob: +44 (0)7879 741 001 / +44 (0)7867 984 082
About Polarean (www.polarean.com)
The Company and its wholly owned subsidiary, Polarean, Inc. (together the
"Group") are revenue-generating, investigational drug-device combination
companies operating in the high-resolution medical imaging research space.
The Group develops equipment that enables existing MRI systems to achieve an
improved level of pulmonary function imaging and specialises in the use of
hyperpolarised xenon gas ((129)Xe) as an imaging agent to visualise
ventilation. (129)Xe gas is currently being studied for visualisation of gas
exchange regionally in the smallest airways of the lungs, across the alveolar
tissue membrane, and into the pulmonary bloodstream.
In October 2020, the Group submitted a New Drug Application ("NDA") to the FDA
for hyperpolarised (129)Xe used to evaluate pulmonary function and to
visualise the lung using MRI. The Group received a complete response letter on
5 October 2021. On 30 March 2022, the Company filed the resubmission of its
NDA with the US FDA and has received a PDUFA date of 30 September 2022.
The Group operates in an area of significant unmet medical need and the
Group's technology provides a novel investigational diagnostic approach,
offering a non-invasive and radiation-free functional imaging platform.
Chairman's Statement
I am pleased to report on a year of considerable progress for Polarean
particularly in light of the ongoing global challenges. We have continued to
build momentum in our strategy to advance our powerful Xenon MRI lung imaging
technology towards commercialisation. The COVID pandemic, and the challenges
that are growing with long COVID, have further accentuated the urgent global
need for improved ways to diagnose and manage pulmonary disease. Polarean is
poised to offer a solution to the gaps that exist with current diagnostic
imaging to directly measure and visualise lung function.
Our efforts in 2021 focused on preparation for commercialisation, following
the Company's October 2020 New Drug Application ("NDA") submission to the
United States Food & Drug Administration ("FDA"). To fund these
commercialisation efforts, in April 2021, the Company completed an
oversubscribed £27 million placing, subscription and open offer. This
financing round put the Company into a strong financial position and brought
in several new top-tier investors into the Polarean shareholder base.
The market research and physician advisory boards that were conducted in 2021
thoroughly advanced our understanding of the unmet needs our technology seeks
to address and highlighted the market opportunities that exist in several
clinical applications at commercial launch. Through scientific engagement
between our medical affairs team and pulmonary disease thought-leaders
undertaken in 2021, it is clear that awareness, interest, and enthusiasm is
building for the potential of hyperpolarised xenon MRI to improve the care of
patients with pulmonary disease. The interest in Polarean's technology is also
growing amongst several pharmaceutical companies that are seeking novel
approaches to use quantitative, functional lung imaging in the development of
their investigational drugs. Finally, Polarean has also been in close contact
with reimbursement entities in the US market, developing pathways to ensure
that reimbursement for the use of Polarean's products is established, and at a
level that acceptable to insurers and providers
We were disappointed in early October 2021 to have received a Complete
Response Letter ("CRL") from the FDA in response to Polarean's NDA submission.
The Company worked diligently to comprehensively respond to the questions
raised in the CRL, which were mostly technical and manufacturing related. The
Company resubmitted the NDA to the FDA on 30 March 2022 and on 20 April 2022,
the Company announced that the FDA had accepted the resubmission of the NDA
and established a user fee goal date of 30 September 2022.
Our primary focus for the remainder of 2022 will be working with the FDA to
obtain final approval for our drug-device combination product and continuing
the planning and preparation for commercial launch. We are also looking
forward to generating new clinical data evidence to support a strong value
proposition and indication and geographical expansion in subsequent regulatory
filings over the next several years.
On behalf of the Board, I thank the employees, stakeholders and shareholders
for their support, without which none of this would have been possible.
Kenneth West
Non-Executive Chairman
17 May 2022
Chief Executive Officer's Statement
2021 - Year of Preparation and Response
We spent the first nine months of 2021 preparing for the launch of our
drug-device combination product in anticipation of receiving FDA approval in
the fourth quarter of 2021. On 5 October 2021, we were surprised to receive a
CRL from the FDA, indicating that they were unable to approve the NDA in its
current form. The CRL and subsequent Type A meeting with the FDA provided the
Company with the list of issues that needed to be addressed to obtain
approval. The issues were mostly technical or manufacturing-related in nature
and centred around the xenon hyperpolariser system. The Company worked with
its consultants and collaborators to address the items identified in the CRL.
On 30 March 2022, the Company refiled the NDA with the FDA. The resubmission
addressed the items identified in the CRL. On 20 April 2022, the Company
announced that the FDA had accepted the resubmission of the NDA and
established a user fee goal date of 30 September 2022, designating it Type 2.
The Opportunity
Pulmonary disease places a significant burden on the US and global healthcare
systems. In addition, the COVID-19 pandemic has resulted in millions of
additional patients who could potentially benefit from improvements in the
quantitative assessment of pulmonary function via non-invasive imaging. The
Company sees a tremendous opportunity to bring our technology's quantitative,
reproducible, non- invasive method for diagnostic and therapeutic guidance to
medicine. Researchers around the world are receiving grants to study long
COVID patients using the Company's technologies. Promising preliminary results
are already emerging and being published and we anticipate additional studies
being published over the next 12 months. Researchers are currently conducting
clinical trials and pharmaceutical company sponsored investigations in
multiple areas of pulmonary disease using our technology. The Company
continues to do market research and work with key opinion leaders through its
advisory board process to refine and extend our understanding of current
standards of care and refine the development of the healthcare economic
analyses of our technology to support the adoption of hyperpolarised noble gas
imaging by healthcare providers. The business plan continues to focus
initially on addressing the high end of the US academic and teaching hospital
market segment, which comprises approximately the top 1000 institutions
nationally having coincident multiple Centres of Excellence in Pulmonary
Medicine and Radiology. The combined addressable capital equipment market
there for our products approaches US$500 million in equipment sales alone,
with the consequent drug sales following, as laid out in recently published
research. We also see a parallel opportunity supporting the pharmaceutical
industry in improving the velocity and reducing the scale and cost of their
pulmonary drug clinical trials by providing quantitative, reproducible
image-based data.
Polarean continues to serve the medical imaging research market by providing
xenon polarisers to enable functional MRI of the pulmonary system to
institutions and researchers. This brings dynamic, reproducible,
three-dimensional, high-resolution, regional, quantitative, image-based
information to pulmonary physicians and researchers whose best alternative
tool is spirometry, with its limitations in use for measurement of expired
breath. We expanded our installed bases with two new polariser installations
during 2021, including one at high profile academic research centre, MD
Anderson.
Our Organisation
In anticipation of FDA approval, the Company has been involved in preparing
the organisation for commercialisation of our products. The Company recently
named Alexander Dusek as its Chief Commercial Officer. Mr. Dusek brings an
extensive background in pharmaceutical industry commercialisation and is
building our commercial organisation to support a successful launch upon FDA
approval.
Our Operations
In 2021, the Company focused on working with its drug and system contract
manufacturing partners to ensure that they are prepared for the launch of the
Company's product. In addition, we made planned advances in our quality
systems and engineering infrastructure as we move toward maturing in our new
regulated environment.
During the year, we completed installations of two model 9820 xenon polariser
systems at BC Children's Hospital, Vancouver BC, and at the University of
Texas MD Anderson Cancer Center, to support their pulmonary research
programmes.
R&D
We continued to invest in our intellectual property portfolio and future
development of our technology. Intellectual property continues to be developed
in the areas of gas exchange and pulmonary vascular disease. Our group has
continued to push the design of the polariser systems forward. We have also
made key advances in exciting new display and analysis software focused on
providing an intuitive, colour encoded three-dimensional display for use
across all stakeholders in the healthcare process focused on providing care to
pulmonary patients.
Financials
Sales for 2021 were below our original expectations, as we did not receive FDA
approval in the final quarter as anticipated in the plan. We were able to
adjust our spending plans following receipt of the CRL from the FDA, which
allowed us to finish 2021 with a higher than anticipated cash balance of
US$28.9 million. We continued to sell our polariser systems into the research
market and completed two installations during 2021. The financing we completed
in the first half of 2021 has put the Company in a solid financial position
with the ability to fund the Company well into 2023.
Advisers
The Company appointed Stifel as joint broker in December 2020 and followed
that up by appointing them as the Company's nominated adviser and sole broker
early in 2021. Stifel guided the Company through an oversubscribed round of
financing, securing important new and larger funds participation in the first
half of 2021 that allowed the Company to prepare for the anticipated US launch
of its product.
2022 and Beyond
We spent the first quarter of 2022 finalising our NDA resubmission focusing on
execution of near-term objectives. We announced on 20 April 2022 that the FDA
had accepted the resubmission of the NDA as a complete response and has
established a user fee goal date of 30 September 2022. In the meantime, we
continue to sell our systems to the research market, including the recently
announced order and installation from McMaster University in Canada, and an
order for an additional system at Cincinnati Children's Hospital Medical
Center.
We continue to identify exciting opportunities in the areas of long COVID,
cardiology and pulmonary vascular disease and these prospects should expand
the use of the Company's technology in the future. We recently announced a
research collaboration in long COVID with Oxford University Hospitals NHS
Trust, whereby we will evaluate the underlying causes of persistent
breathlessness in patients with long COVID using our xenon polariser. We are
utilising the delay in obtaining FDA approval to work on the commercialisation
and launch programmes and explore initiation of follow-on trials for potential
future applications of our technology. We have begun evaluation of geographic
market exploration and expansion, and the pursuit of early engagement with
respiratory drug developers as we develop scale sufficient to prove our value
proposition with regard to reducing the costs of their drug development
process.
Polarean has a dedicated team of employees, consultants and advisers working
to bring our much- needed technology to the healthcare market.
Richard Hullihen
Chief Executive Officer
17 May 2022
Consolidated Statement of Comprehensive Income
2021 2020
Notes US$ US$
Revenue 4 1,185,427 1,056,766
Cost of sales (677,402) (346,300)
Gross profit 508,025 710,466
Administrative expenses (6,517,396) (5,049,246)
Depreciation 11 (177,349) (150,224)
Amortisation 12 (757,016) (734,058)
Selling and distribution expenses (5,557,829) (917,783)
Share-based payment expense 19 (1,814,882) (474,716)
Total administrative expenses (14,824,472) (7,326,027)
Operating loss 6 (14,316,447) (6,615,562)
Finance income 7 321,544 100,769
Finance expense 7 (21,101) (19,730)
Loss before tax (14,016,004) (6,534,523)
Taxation 10 - -
Loss for the year and total other comprehensive expense (14,016,004) (6,534,523)
Loss per share
Basic and diluted (US$) 9 (0.071) (0.044)
The results reflected above relate to continuing activities.
There are no items of Other Comprehensive Income ("OCI") for the year other
than the loss above and therefore no separate statement of other comprehensive
income has been presented.
Consolidated Statement of Financial Position
Notes 2021 2020
US$ US$
ASSETS
Non-current assets
Property, plant and equipment 11 634,779 271,264
Intangible assets 12 2,193,843 2,810,694
Right-of-use assets 24 422,816 184,213
Trade and other receivables 14 5,539 5,539
3,256,977 3,271,710
Current assets
Inventories 15 1,426,810 977,924
Trade and other receivables 14 970,968 348,067
Cash and cash equivalents 16 28,874,908 6,282,665
31,272,686 7,608,656
TOTAL ASSETS 34,529,663 10,880,366
EQUITY AND LIABILITIES
Equity attributable to holders of the parent
Share capital 17 101,642 78,200
Share premium 18 59,022,919 23,840,571
Group re-organisation reserve 18 7,813,337 7,813,337
Share-based payment reserve 19 3,660,332 1,845,450
Accumulated losses 18 (38,860,208) (24,844,204)
31,738,022 8,733,354
Non-current liabilities
Deferred income 21 145,747 219,954
Lease liability 24 358,837 91,609
Contingent consideration 20 316,000 316,000
820,584 627,563
Current liabilities
Trade and other payables 22 1,731,114 1,348,867
Lease liability 24 130,949 129,819
Deferred income 21 108,994 40,763
1,971,057 1,519,449
TOTAL EQUITY AND LIABILITIES 34,529,663 10,880,366
These Financial Statements were approved and authorised for issue by the Board
of Directors on 17 May 2022 and were signed on its behalf by:
Kenneth West
Non-Executive Chairman
Company Statement of Financial Position
Notes 2021 2020
US$ US$
ASSETS
Non-current assets
Investment in subsidiary 13 58,180,314 24,735,727
58,180,314 24,735,727
Current assets
Trade and other receivables 14 22,410 61,304
Cash and cash equivalents 16 2,454,491 911,271
2,476,901 972,575
TOTAL ASSETS 60,657,215 25,708,302
EQUITY AND LIABILITIES
Equity attributable to holders of the parent
Share capital 17 101,642 78,200
Share premium 18 59,022,919 23,840,571
Merger reserve 18 4,322,527 4,322,527
Share-based payment reserve 19 3,355,301 1,540,419
Accumulated losses 18 (6,251,190) (4,122,345)
60,551,199 25,659,372
Current liabilities
Trade and other payables 22 106,016 48,930
106,016 48,930
TOTAL EQUITY AND LIABILITIES 60,657,215 25,708,302
For the year under review, the amount due from subsidiary undertaking is
regarded as net investment and is therefore reclassified from trade and other
receivable to investment in subsidiary, and their respective comparatives were
also restated.
As permitted by section 408 of the Companies Act 2006, no separate statement
of Comprehensive Income is presented in respect of the parent Company. The
loss for the financial year dealt with in the financial statements of the
parent Company was US$2,128,845 (2020: US$908,895).
These financial statements were approved and authorised for issue by the Board
of Directors on 17 May 2022 and were signed on its behalf by:
Kenneth West
Non-Executive Chairman
Consolidated Statement of Changes in Equity
Share capital Share premium Share-based payment reserve Group Accumulated losses Total equity
US$
US$
US$
US$
re-organisation reserve US$
US$
As at 1 January 2020 55,776 13,659,912 1,370,734 7,813,337 (18,309,681) 4,590,078
Comprehensive income
Loss for the year - - - - (6,534,523) (6,534,523)
Transactions with owners
Issue of shares 22,424 10,703,373 - - - 10,725,797
Share issue costs - (522,714) - - - (522,714)
Share-based payment expense - - 474,716 - - 414,716
As at 31 December 2020 (audited) 78,200 23,840,571 1,845,450 7,813,337 (24,844,204) 8,733,354
Comprehensive income
Loss for the year - - - - (14,016,004) (14,016,004)
Transactions with owners
Issue of shares 23,442 37,284,454 - - - 37,307,896
Share issue costs - (2,102,106) - - - (2,102,106)
Share-based payment expense - - 1,814,882 - - 1,814,882
As at 31 December 2021 101,642 59,022,919 3,660,332 7,813,337 (38,860,208) 31,738,022
Company Statement of Changes in Equity
Share capital Share premium Share-based payment reserve Merger reserve Accumulated losses Total equity
US$
US$
US$
US$
US$
US$
As at 1 January 2020 55,776 13,659,912 1,065,703 4,322,527 (3,213,450) 15,890,468
Comprehensive income
Loss for the year - - - - (908,895) (908,895)
Transactions with owners
Issue of shares 22,424 10,703,373 - - - 10,725,797
Share issue costs - (522,714) - - - (522,714)
Share-based payment expense - - 474,716 - - 474,716
As at 31 December 2020 78,200 23,840,571 1,540,419 4,322,527 (4,122,345) 25,659,372
Comprehensive income
Loss for the year - - - - (2,128,845) (2,128,845)
Transactions with owners
Issue of shares 23,442 37,284,454 - - - 37,307,896
Share issue costs - (2,102,106) - - - (2,102,106)
Share-based payment expense - - 1,814,882 - - 1,814,882
As at 31 December 2021 101,642 59,022,919 3,355,301 4,322,527 (6,251,190) 60,551,199
Consolidated Statement of Cash Flows
2021 US$ 2020
US$
Cash flows from operating activities
Loss before tax (14,016,004) (6,534,522)
Adjustments for non-cash/non-operating items:
Depreciation of plant and equipment 177,349 150,224
Amortisation of intangible assets and right-of use-assets 757,015 734,058
Loss on disposal of property, plant and equipment 590 -
Loss on remeasurement of right-of-use assets 11,660 -
Share-based payment expense 1,814,882 474,716
Finance expense 21,101 19,730
Finance income (321,544) (100,769)
Operating cash outflows before movements in working capital (11,554,95) (5,256,563)
Increase in inventories (448,886) (423,093)
(Increase)/decrease in trade and other receivables (622,901) 288,096
Increase/(decrease) in trade and other payables 382,247 (424,714)
(Decrease)/increase in deferred income (5,976) 21,576
Net cash used in operations (12,250,467) (5,794,698)
Cash flows from investing activities
Purchase of plant and equipment (541,454) (65,531)
Net cash used in investing activities (541,454) (65,531)
Cash flows from financing activities
Issue of shares 37,307,896 10,725,797
Cost of issue (2,102,106) (522,714)
Interest paid on lease liabilities -(21,101) (19,730)
Interest received 321,544 100,769
Principal elements of lease payments (122,069) (103,097)
Net cash generated by financing activities 35,384,164 10,181,025
Net increase in cash and cash equivalents 22,592,243 4,320,796
Cash and cash equivalents at the beginning of year 6,282,665 1,961,869
Cash and cash equivalents at end of year 28,874,908 6,282,665
Company Statement of Cash Flows
Year ended Year ended
31 December
31 December
2021
2020
US$
US$
Cash flows from operating activities
Loss before tax (2,128,845) (908,895)
Adjustments for non-cash/non-operating items:
Share-based payment expense 1,814,882 474,716
Interest received (319,564) (100,358)
Operating cash outflows before movements in working capital (633,527) (534,537)
Increase in trade and other receivables 38,894 42,372
Increase/(decrease) in trade and other payables 57,086 (4,068)
Net cash used by operations (537,547) (496,233)
Cash flows from financing activities
Issue of shares 37,307,896 10,725,797
Cost of issue (2,102,106) (522,714)
Interest received 319,564 100,358
Loans to the Subsidiary (33,444,587) (8,952,702)
Net cash generated by financing activities 2,080,767 1,350,739
Increase in cash and cash equivalents 1,543,220 848,506
Cash and cash equivalents at the beginning of period 911,271 56,765
Cash and cash equivalents at end of period 2,454,491 911,271
Notes to the Financial Statements
1. General information
The Company is incorporated in England and Wales under the Companies Act 2006.
The registered number is 10442853 and its registered office is at 27-28
Eastcastle Street, London, W1W 8DH. The Company is listed on the AIM market of
the London Stock Exchange.
The Company is the parent company of Polarean, Inc (the "Subsidiary", together
the "Group"). The principal activity of the Group is developing next
generation medical imaging technology. The Subsidiary is incorporated in the
United States of America and has a registered office of 2500 Meridian Parkway
#175, Durham, NC 27713, USA.
2. Adoption of new and revised International Financial Reporting Standards
Standards and interpretations adopted during the year
Information on new standards, amendments and interpretations that are relevant
to the Group's annual report and accounts is provided below:
· Interest Rate Benchmark Reform (IBOR) reform Phase 2 (Amendments to
IFRS 9, IAS 39 and IFRS 7); and
· COVID-19-Related Rent Concessions beyond 30 June 2021 (Amendments to
IFRS 16).
These standards have no material impact on the Group.
Standards, amendments and interpretations that are not yet effective
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Company has decided not to adopt early. The most significant
of these are as follows, which are all effective for the period beginning 1
January 2022:
· Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS
37);
· Property, Plant and Equipment: Proceeds before Intended Use
(Amendments to IAS 16);
· Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS
1, IFRS 9, IFRS 16 and IAS 41); and
· References to Conceptual Framework (Amendments to IFRS 3).
The following amendments are effective for the period beginning 1 January
2023:
· Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS
Practice Statement 2);
· Definition of Accounting Estimates (Amendments to IAS 8); and
· Deferred Tax Related to Assets and Liabilities arising from a Single
Transaction (Amendments to IAS 12).
The Group is currently assessing the impact of these new accounting standards
and amendments.
3. Significant accounting policies
Basis of preparation
These financial statements have been prepared in accordance with UK adopted
International Accounting Standards ("IFRS") and under the historical cost
convention. The financial statements are presented in United States Dollars
("US$") except where otherwise indicated.
The principal accounting policies adopted in the preparation of the financial
statements are set out below. The policies have been consistently applied to
all the years presented, unless otherwise stated.
Going concern
The Directors consider the going concern basis of preparation to be
appropriate in preparing the financial statements.
The Group is in its development stage and has not yet moved to full commercial
exploitation of its IP. During the year ended 31 December 2021 the Group
recorded a loss after tax of US$14,016,004 (2020: loss of US$6,534,523) and a
net cash outflow from operating activities of US $12,250,467 (2020:
US$5,794,698).
During the year, the Group raised approximately US$37.3 million from the
placement of new shares. At the reporting the Group's cash balance was US$28.9
million (2020: US$6.3 million). In considering the appropriateness of this
basis of preparation, the Directors have reviewed the Group's working capital
forecasts for a minimum of 12 months from the date of the approval of this
financial information. Based on their consideration the Directors have
reasonable expectation that the Group has adequate resources to continue for
the foreseeable future and that carrying values of intangible assets are
supported. Thus, they continue to adopt the going concern basis of accounting
in preparing this financial information.
Management has implemented logistical and organisational changes to underpin
the Group's resilience to COVID-19, with the key focus being protecting all
personnel, minimising the impact on critical work streams and ensuring
business continuity. COVID-19 may impact the Group in varying ways, which
could lead to a direct bearing on the Group's ability to generate future cash
flows for working capital purposes. Management is closely monitoring
commercial and technical aspects of the Group's operations to mitigate the
impact from the COVID-19 pandemic. The inability to gauge the length of such
disruption further adds to this uncertainty. For these reasons the generation
of sufficient operating cash flows remain a risk. Management believes the
Group will generate sufficient working capital and cash flows to continue in
operational existence and will have the ongoing support of its shareholders,
if required, for the foreseeable future.
Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares are shown in share premium as a
deduction from the proceeds.
Government and other grants
Grants are not recognised until there is a reasonable assurance that the Group
will comply with the conditions attaching to them and that the grants will be
received. Grants are treated as deferred income and released to the income
statement on the achievement of the relevant performance criteria.
Inventory
Inventories are measured at the lower of cost and net realisable value. The
cost of inventories is based on the weighted average cost principle and
includes expenditure incurred in inventories, adjusted for rebates, and other
costs incurred in bringing them to their existing location.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an
original maturity of three months or less.
3. Significant accounting policies continued
Functional and presentation currency
Items included in the financial statements of the Group are measured using the
currency of the primary economic environment in which the Group operates ("the
functional currency"). The financial statements are presented in United States
Dollars (US$) which is also the Group's functional currency.
Foreign currencies
Transactions in foreign currencies are initially recorded by the Group's
entities at their respective functional currency spot rates at the date the
transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are
translated at the functional currency spot rates of exchange at the reporting
date.
Differences arising on settlement or translation of monetary items are
recognised in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates at the dates of the initial
transactions. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value is
determined. The gain or loss arising on translation of non-monetary items
measured at fair value is treated in line with the recognition of the gain or
loss on the change in fair value of the item (i.e., translation differences on
items whose fair value gain or loss is recognised in OCI or profit or loss are
also recognised in OCI or profit or loss, respectively).
Basis of consolidation
The consolidated financial statements are for the year ended 31 December 2021.
The measurement bases and principal accounting policies of the Group are set
out below.
On 30 May 2017 Polarean Merger-Sub, Inc., a Subsidiary of the Subsidiary,
completed a merger process under which it acquired substantially all of the
assets of m2m Imaging Corp ("m2m"), a portfolio company of Amphion Innovations
plc engaged in the development of high-performance MRI RF coils for the global
research market, primarily in micro-imaging. By 2016 m2m had been inactive for
several years due to an inability to raise funds. At the date of the merger
the assets of m2m were its technology and patents. The merger was affected by
way of court sanction in the process of which the Subsidiary acquired, through
a special purpose entity, Polarean Merger Sub, Inc. the assets of another
special purpose entity, m2m Merger Sub, Inc., with m2m Merger Sub, Inc. being
the surviving entity. After the reporting date, on 1 September 2017, m2m
Merger Sub, Inc. was merged into the Subsidiary with the Subsidiary being the
surviving entity, the effect being that m2m Merger Sub, Inc. was collapsed,
and the Subsidiary had acquired the m2m assets.
As part of the arrangements for the merger 576,430 shares in the Subsidiary
were issued to the former shareholders in m2m with the intention that all
parties would exchange their stock in Polarean, Inc. for shares in the Group
on a pro rata basis as soon as practicable.
The Directors consider the merger between the Subsidiary and m2m Acquisition,
Inc. as a consequence of which the group acquired the exclusive worldwide
rights to m2m's technology and patents does not meet the definition of an
acquisition of a business as set out in IFRS3 and has therefore been accounted
for as the acquisition of an asset or a group of assets that does not
constitute a business.
IFRS 3 requires that in such cases the acquirer shall identify and recognise
the individual identifiable assets acquired (including those assets that meet
the definition of, and recognition criteria for, intangible assets in IAS 38
Intangible assets) and to allocate the cost of the individual identifiable
assets and liabilities on the basis of their relative fair values at the date
of purchase. Such a transaction or event does not give rise to goodwill.
The fair value of the assets acquired under the merger arrangement of
US$4,999,996 represents the aggregate estimated value of the financial
obligations of the former m2m shareholders which were converted into equity in
m2m prior to the merger agreement.
3. Significant accounting policies continued
The Directors consider the acquisition of the entire issued common stock of
the Subsidiary by the Company in exchange for equivalent equity participation
in the Company to be a group re-organisation and not a business combination
and to fall outside the scope of IFRS 3. Having considered the requirements of
IAS 8 and the relevant UK and US guidance, the transaction has been accounted
for on a merger or pooling of interest basis as if both entities had always
been combined, using book values, with no fair value adjustments made nor
goodwill recognised.
Revenue recognition
Revenue comprises the fair value of the sale of goods and rendering of
services to external customers, net of applicable sales tax, rebates,
promotions and returns.
Contracts and obligation
The majority of customer contracts have three main elements that the Group
provides to the customer:
- Sale of polarisers;
- Sale of parts and upgrades; and
- Provision of service.
The sale of polarisers is seen as a distinct performance obligation and
revenue is recognised at a point in time. The customer can benefit from the
use of the polarisers when supplied and is not reliant on the Group to provide
the parts and upgrades or service, and therefore revenue from the sale of
polarisers is recognised in full when the goods are delivered to the customer.
The second performance obligation is the sale of parts and upgrades. The
customer can benefit from the use of the parts and upgrade when supplied and
is not reliant on the Group to provide the service, and therefore revenue from
the sale of parts and upgrades is recognised in full when the goods are
delivered to the customer.
The third performance obligation is the provision of preventive maintenance
service. Revenue from the provision of preventive maintenance service is
recognised over the period when the services are rendered. A contract
liability represents the obligation of the Group to render services to a
customer for which consideration has been received (or the amount is due) from
the customer.
Determining the transaction price
The transaction price is determined as the fair value of the Group expects to
receive over the course of the contract.
There are no incentives given to customers that would have a material effect
on the financial statements.
Allocate the transaction price to the performance obligations in the contract
The allocation of the transaction price to the performance obligations in the
contract is non-complex for the Group. There is a fixed unit price for each
product or service sold. Therefore, there is limited judgement involved in
allocating the contract price to each unit ordered.
Recognise revenue when or as the entity satisfies its performance obligations
The overarching terms are consistent in each contract.
The sale of polarisers is seen as a distinct performance obligation and
revenue is recognised at a point in time, when title of the goods transferred
to the customer, as the customer can benefit from the use of the polarisers
when supplied.
The sale of parts and upgrades is seen as a distinct performance obligation
and revenue is recognised at a point in time, when supplied to the customer,
as the customer can benefit from the use of the parts and upgrade when
supplied.
The provision of service is seen as a distinct performance obligation and
revenue is recognised as the Group provides these services for the duration of
the contract, i.e. over time. Any unexpired portion of a service contract or
payment received in advance in respect of service contracts either partially
completed or not started, are included in deferred income and released over
their remaining term.
3. Significant accounting policies continued
Property, plant and equipment
Owned assets
Items of property, plant and equipment are stated at cost or deemed cost less
accumulated depreciation and impairment losses. Cost includes the original
purchase price of the asset and the costs attributable to bringing the asset
to its working condition for its intended use. When parts of an item of
property, plant and equipment have different useful lives, those components
are accounted for as separate items of property, plant and equipment.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably.
Depreciation
Depreciation is charged to profit or loss on a straight-line basis over the
estimated useful lives of each part of an item of property, plant and
equipment. The estimated useful lives are as follows:
● Computer and IT equipment - 33% straight line
● Leasehold improvements - 20% straight line
● Laboratory equipment - 20% straight line
The residual values, useful lives and depreciation methods are reviewed, and
adjusted if appropriate, or if there is an indication of a significant change
since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with
the carrying amount and are recognised within administrative expenses in the
statement of comprehensive income.
Intangible Assets
Patents and related rights which are acquired through a business combination,
are assessed by reviewing their net present value of future cash flows.
Patents are currently amortised over their useful life, not exceeding 10
years.
Internally generated intangible assets - research costs are costs incurred in
research activities and are recognised as an expense in the period in which
they are incurred. An internally generated intangible asset arising from the
development of commercial technologies is recognised only if all of the
following conditions are met:
· it is probable that the asset will create future economic benefits;
· the development costs can be measured reliably;
· technical feasibility of completing the intangible asset can be
demonstrated;
· there is the intention to complete the asset and use or sell it;
· there is the ability to use or sell the asset; and
· adequate technical, financial and other resources to complete the
development and to use or sell the asset are available.
At this time the Directors consider that the Group does not meet all of those
conditions and development costs are therefore recorded as expense in the
period in which the cost is incurred.
Impairment of non-financial assets
Non-financial assets are reviewed 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 carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of
an asset's fair value less costs to sell and value in use. For the purposes of
assessing impairment, assets are reviewed at the lowest levels for which there
are separately identifiable cash flows (cash-generating units).
Non-financial assets other than goodwill that suffered impairment are reviewed
for possible reversal of the impairment at each reporting date.
3. Significant accounting policies continued
Provisions
A provision is recognised in the statement of financial position when the
Group has a present legal or constructive obligation as a result of a past
event, and it is probable that an outflow of economic benefits will be
required to settle the obligation. If the effect is material, provisions are
determined by discounting the expected future cash flows at a pre-tax rate
that reflects current market assessments of the time value of money and, when
appropriate, the risks specific to the liability. The increase in the
provision due to the passage of time is recognised in finance costs.
Financial assets
The Group classifies all of its financial assets at amortised cost. Financial
assets do not comprise prepayments. Management determines the classification
of its financial assets at initial recognition.
These assets arise principally from the provision of goods and services to
customers (e.g. trade receivables), but also incorporate other types of
financial assets where the objective is to hold their assets in order to
collect contractual cash flows and the contractual cash flows are solely
payments of the principal and interest. They are initially recognised at fair
value plus transaction costs that are directly attributable to their
acquisition or issue and are subsequently carried at amortised cost using the
effective interest rate method, less provision for impairment.
Amortised Cost
The Group's financial assets held at amortised cost comprise trade and other
receivables and cash and cash equivalents in the consolidated statement of
financial position.
Impairment provisions for trade receivables are recognised based on the
simplified approach within IFRS 9 using the lifetime expected credit losses.
During this process the probability of the non-payment of the trade
receivables is assessed. This probability is then multiplied by the amount of
the expected loss arising from default to determine the lifetime expected
credit loss for the trade receivables. For trade receivables, which are
reported net; such provisions are recorded in a separate provision account
with the loss being recognised within administrative expenses in the
consolidated statement of comprehensive income. On confirmation that the trade
receivable will not be collectable, the gross carrying value of the asset is
written off against the associated provision.
Impairment provisions for other receivables are recognised based on the
general impairment model within IFRS 9. In doing so, the Company follows the
3-stage approach to expected credit losses. Step 1 is to estimate the
probability that the debtor will default over the next 12 months. Step 2
considers if the credit risk has increased significantly since initial
recognition of the debtor. Finally, Step 3 considers if the debtor is credit
impaired, following the criteria under IAS 39.
Financial liabilities
The Group classifies its financial liabilities in the category of financial
liabilities at amortised cost. All financial liabilities are recognised in the
statement of financial position when the Group becomes a party to the
contractual provision of the instrument.
Financial liabilities measured at amortised cost comprise trade payables and
other short-dated monetary liabilities, which are initially recognised at fair
value and subsequently carried at amortised cost using the effective interest
rate method.
Unless otherwise indicated, the carrying values of the Group's financial
liabilities measured at amortised cost represents a reasonable approximation
of their fair values.
Employee benefits: pension obligations
The Group operates a defined contribution plan. A defined contribution plan is
a pension plan under which the Group pays fixed contributions into a separate
entity. The Group 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 periods.
The Group has no further payment obligations once the contributions have been
paid. The contributions are recognised as employee benefit expense when they
are due. Prepaid contributions are recognised as an asset to the extent that a
cash refund or a reduction in the future payments is available.
3. Significant accounting policies continued
Net finance costs
Finance costs
Finance costs comprise direct issue costs and foreign exchange losses; and are
expensed using the effective interest method in the period in which they are
incurred.
Finance income
Finance income comprises interest receivable on funds invested, and foreign
exchange gains.
Interest income is recognised in the income statement as it accrues using the
effective interest method.
Leases
Definition of a lease
The Group assesses whether a contract is or contains a lease. A contract is or
contains a lease if the contract conveys a right to control the use of an
identified asset for a period of time in exchange for consideration.
The Group recognises a right-of-use asset and a lease liability at the lease
commencement date. The right-of-use asset is initially measured at cost, and
subsequently at cost less any accumulated amortisation and impairment losses
and adjusted for certain measurements of the lease liability. Right-of-use
assets are amortised on a straight-line basis over the remaining term of the
lease or over the remaining economic life of the asset if, rarely, this is
judged to be shorter than the lease term.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using the
interest rate implicit or, if that rate cannot be readily determined, the
Group's incremental borrowing rate. Generally, the Group uses its incremental
borrowing rate as the discount rate.
The lease liability is subsequently increased by the interest cost on the
lease liability and decreased by lease payments made. It is remeasured when
there is a change in future lease payments arising from a change in an index
or rate, a change in estimate of the amount expected to be payable under a
residual value guarantee, or as appropriate, changes in the assessment of
whether a purchase or extension option is reasonably certain to be exercised
or a termination option is reasonably certain not to be exercised.
The Group has applied judgement to determine the lease term for some lease
contracts in which it is a lease that include renewal options. The assessment
of whether the Group is reasonably certain to exercise such options impacts
the lease term, which significantly affects the amount of lease liabilities ad
right-of-use assets recognised.
Income tax
Income tax for the years presented comprises current and deferred tax. Income
tax is recognised in the income statement except to the extent that it relates
to items recognised directly in equity, in which case it is recognised in
equity. Current tax is the expected tax payable on the taxable income for the
year, using tax rates enacted or substantively enacted at the statement of
financial position date, and any adjustment to tax payable in respect of
previous years.
Deferred tax is recognised on temporary differences arsing between the tax
bases of assets and liabilities and their carrying amounts.
The following temporary differences are not recognised if they arise from a)
the initial recognition of goodwill, and b) for the initial recognition of
other assets or liabilities in a transaction other than a business combination
that at the time of the transaction affects neither accounting nor taxable
profit or loss. Deferred tax is determined using tax rates and laws that have
been enacted or substantially enacted by the balance sheet date and are
expected to apply when the related deferred tax asset is realised, or the
deferred income tax liability is settled.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be
utilised. Deferred tax assets are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.
3. Significant accounting policies continued
Deferred income tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when the deferred income taxes assets and liabilities relate to income
taxes levied by the same taxation authority on either the taxable entity or
different taxable entities where there is an intention to settle the balances
on a net basis.
Critical accounting estimates and judgements
The preparation of the Group's financial statements under IFRS requires the
directors to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and
liabilities. Estimates and judgements are continually evaluated and are based
on historical experience and other factors including expectations of future
events that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates.
The directors consider that the following judgements are likely to have the
most significant effect on the amounts recognised in the financial statements.
Carrying value of intangible assets - Group
In determining whether there are indicators of impairment of the Group's
intangible assets, the directors take into consideration various factors
including the economic viability and expected future financial performance of
the asset and when it relates to the intangible assets arising on a business
combination, the expected future performance of the business acquired.
Carrying value of investments in and amounts receivable from subsidiaries -
Company
In determining whether there are indicators of impairment of the Company's
investments in, and amounts receivable from, its subsidiary undertakings, the
directors take into consideration various factors including the economic
viability and expected future financial performance of the business of the
subsidiary undertakings.
4. Segmental information
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the chief
operating decision maker (which takes the form of the Board of Directors) as
defined in IFRS 8, in order to allocate resources to the segment and to assess
its performance.
The chief operating decision maker has determined that the Group has one
operating segment, the development and commercialisation of gas polariser
devices and ancillary instruments. Revenues are reviewed based on the products
and services provided: Polarisers, Parts and Upgrades, Service and Other
revenue.
The Group operates in Canada, Germany, the United Kingdom and the United
States of America. Revenue by origin of geographical segment for all entities
in the Group is as follows:
Revenue
2021 2020
US$ US$
Canada 529,824 85,728
Germany 6,750 -
United Kingdom 25,183 34,304
United States of America 623,670 936,734
Total 1,185,427 1,056,766
Non-current assets
2021 2020
US$ US$
United States of America 3,256,977 3,271,710
Total 3,256,977 3,271,710
Product and services revenue analysis
Revenue
2021 2020
US$ US$
Polarisers 826,059 536,350
Parts and Upgrades 275,789 158,275
Service 83,579 61,991
Grants - 300,151
Total 1,185,427 1,056,766
Management measures revenues by reference to the Group's core services and
products and related services, which underpin such income.
5. Employees and Directors
Staff costs for the Group and the Company during the year:
2021 2020
US$ US$
Wages and salaries 3,604,758 2,265,077
Healthcare benefits 220,476 142,942
Social Security costs 248,063 132,941
4,073,297 2,540,959
Average monthly number of people (including directors) employed by activity:
2021 2020
No. No.
Senior management including directors 10 10
R&D and clinical trial 11 8
Administration 7 3
Total 28 21
Key management compensation:
The following table details the aggregate compensation paid to key management
personnel.
2021 2020
US$ US$
Salaries and fees 1,394,235 1,242,468
Healthcare benefits 85,830 78,065
Social security costs 69,465 70,968
1,549,530 1,391,501
Key management personnel include all directors who together have authority and
responsibility for planning, directing, and controlling the activities of the
Group and senior divisional managers.
6. Operating loss
2021 2020
US$ US$
Depreciation
- Owned property, plant and equipment 177,349 150,224
Amortisation of right-of-use assets 140,164 117,206
Amortisation of intangible assets 616,851 616,852
Subtotal Amortisation 757,015 734,058
Research expenses 649,695 451,129
Auditors' remuneration (note 8) 55,664 49,000
Clinical trial costs (52,599) 427,155
Regulatory consulting costs 1,126,675 788,903
Legal and professional fees 494,688 298,850
Brand development and market research 2,091,921 348,510
Medical affairs and congress/symposia 916,238 23,625
7. Net finance expense
2021 2020
US$
US$
Foreign exchange gain 318,957 100,358
Sundry income 2,587 411
Total finance income 321,544 100,769
Finance expense 21,101 19,730
Total finance expense 21,101 19,730
8. Auditor remuneration
2021 2020
US$ US$
Auditors' remuneration
Fees payable to the Group's auditor for audit of Parent Company and 55,664 49,000
Consolidated Financial Statements
9. Loss per share
The loss per share has been calculated using the loss for the year and the
weighted average number of ordinary shares outstanding during the year, as
follows:
2021 2020
US$
US$
Loss for the year attributable to shareholders of the Group (US$) (14,016,004) (6,534,523)
Weighted average number of ordinary shares 196,961,274 149,985,929
Basic and diluted loss per share (0.071) (0.044)
For diluted loss per share, the weighted average number of ordinary shares in
issue is adjusted to assume conversion of all potential dilutive warrants,
options and convertible loans over ordinary shares. Potential ordinary shares
resulting from the exercise of warrants, options and the conversion of
convertible loans have an anti-dilutive effect due to the Group being in a
loss position. As a result, diluted loss per share is disclosed as the same
value as basic loss per share.
10. Taxation
There were no charges to current corporate taxation due to the losses incurred
by the Group in the period.
Income taxes computed at the statutory federal income tax of 21% (2020: 21%)
and the state income tax of 2.50% (2020: 2.50%) UK corporation tax is
calculated at 19% of the estimated assessable profits for the year.
2021 2020
US$
US$
Loss on ordinary activities before tax (14,016,004) (6,534,523)
Loss on ordinary activities multiplied by the rate of corporation tax in the (2,943,361) (1,372,250)
US as above
Effects of:
Adjustments for rate of tax in other jurisdictions 42,577 26,611
Unrelieved tax losses carried forward 2,900,784 1,345,639
Total taxation charge - -
The tax reform act of 1986 contains provisions which limit the ability to
utilise the net operating loss carry forwards in the case of certain events
including significant changes in ownership interests. If the Group's net
operating loss carry forward, the Group would incur a federal income tax
liability even though net operating loss carry forwards would be available in
future years.
The Company has tax losses carried forward of US$33,391,842 (2020:
$19,375,838). The unutilised tax losses have not been recognised as a deferred
tax asset due to uncertainty over the timing of future profits and gains. In
addition, there are approximately $531,000 (2020: $227,000) of unrecognised
deferred tax assets in respect of the share-based payment.
11. Property, plant and equipment
Leasehold improvements Furniture and equipment Computers and IT equipment Total
US$
US$
US$
US$
Cost
At 1 January 2020 2,695 433,950 26,665 463,310
Additions 10,963 14,252 40,316 65,531
Disposals (7,412) (7,708) (15,120)
At 31 December 2020 13,658 440,790 59,273 513,721
Additions 17,050 464,585 59,819 541,454
Disposals - - (1,328) (1,328)
At 31 December 2021 30,708 905,375 117,764 1,053,847
Accumulated depreciation
At 1 January 2020 1,977 82,109 23,266 107,352
Depreciation expense 4,091 138,314 7,820 150,225
Disposals (7,412) (7,708) (15,120)
At 31 December 2020 6,068 213,012 23,377 242,457
Depreciation expense 7,934 146,656 22,759 177,349
Disposals - - (738) (738)
At 31 December 2021 14,002 359,668 45,398 419,068
Carrying amount
At 31 December 2020 7,590 227,778 35,896 271,264
At 31 December 2021 16,706 545,707 72,366 634,779
12. Intangible assets
Patents Total
US$ US$
Cost
At 1 January 2020 5,045,996 5,045,996
Additions - -
At 31 December 2020 5,045,996 5,045,996
Additions - -
At 31 December 2021 5,045,996 5,045,996
Accumulated amortisation
At 1 January 2020 1,618,450 1,618,450
Amortisation expense 616,852 616,852
At 31 December 2020 2,235,302 2,235,302
Amortisation expense 616,851 616,851
At 31 December 2021 2,852,153 2,852,153
Carrying amount
At 31 December 2020 2,810,694 2,810,694
At 31 December 2021 2,193,843 2,193,843
13. Investment in subsidiary undertaking
Company Investment in subsidiary Amount due
undertaking from subsidiary undertaking
US$
US$ Total
US$
Cost
At 31 December 2020 4,342,848 20,392,879 24,735,727
At 31 December 2021 4,342,848 53,837,466 58,180,314
Carrying amount
At 31 December 2020 4,342,848 20,392,879 24,735,727
At 31 December 2021 4,342,848 53,837,466 58,180,314
The investment in subsidiary undertaking is stated at cost less provision for
impairment. The amount due from subsidiary undertaking are regarded as net
investment which is subject to the impairment assessment whenever events or
changes in circumstance indicate that the carrying value of the investment and
the amount due from subsidiary undertakings may not be recoverable. For the
year under review, there is no such indicator for impairment.
The net carrying amounts noted above relates to the Subsidiary. The subsidiary
undertaking during the year were as follows:
Registered office address Country of incorporation Interest held
%
Polarean Inc. 2500 Meridian Parkway #175, Durham, NC 27713, USA USA 100
14. Trade and other receivables
Group Company
Amounts falling due after one year 2021 2020 2021 2020
US$
US$
US$
US$
Rental deposit 5,539 5,539 - -
Group Company
2021 2020 2021 2020
US$
US$
US$
US$
Amounts falling due within one year
Trade receivables 119,096 185,473 - -
Other receivables - 51,184 - 51,184
Prepayments 851,872 111,410 22,410 10,120
970,968 348,067 22,410 61,304
Analysis of trade receivables based on age of invoices
< 30 31 - 60 $'000 61 -90 $'000 > 90 Total Gross ECL Total Net
$'000 $'000 $'000 $'000 $'000
2021 73,500 - 45,097 499 119,096 - 119,096
2020 27,116 155,785 2,572 - 185,473 - 185,473
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses (ECL) which uses a lifetime expected loss allowance for all trade
receivables. The ECL balance has been determined based on historical data
available to management in addition to forward looking information utilising
management knowledge. The Company applies a similar approach to measuring ECL
for the amounts due from group undertakings.
Trade receivables are amounts due from customers for goods sold or services
performed in the ordinary course of business. They are generally due for
settlement within 30 days and therefore are all classified as current. The
majority of trade and other receivables are non-interest bearing. Where the
effect is material, trade and other receivables are discounted using discount
rates which reflect the relevant costs of financing. The carrying amount of
trade and other receivables approximates fair value.
The group trade receivables include governments grants which amounted to
US$Nil (2020: US$42,735) in which there are no unfulfilled conditions or
contingencies attached to these grants as of 31 December 2021.
15. Inventory
Group
2021 2020
US$
US$
Component parts 1,426,810 977,924
During the year ended 31 December 2021, a total of $677,402 of inventories was
included in the statement of comprehensive income as an expense (2020:
$346,300).
16. Cash and cash equivalents
Group Company
2021 2020 2021 2020
US$
US$
US$
US$
Cash at bank and in hand 28,874,908 6,282,665 2,454,491 911,271
17. Share capital
The issued share capital of the Company was as follows:
Allotted and called up - Ordinary shares of 0.037p each 2021 2021 2020 2020
No. US$ No. US$
At beginning of period 163,212,935 78,200 114,438,600 55,776
Issue of shares upon warrant exercise 928,089 474 830,538 386
Issue of shares to investors 44,932,142 22,881 46,624,997 21,386
Issue of shares upon option exercise 176,800 87 1,318,800 652
At end of year 209,249,966 101,642 163,212,935 78,200
On 2 March 2020, the Company issued 232,010 new ordinary shares upon the
exercise of share warrants with an exercise price of £0.15 each.
On 1 April 2020, the Company issued 46,624,997 new ordinary shares at a price
of £0.18 each.
On 1 June 2020, the Company issued 534,400 new ordinary shares upon the
exercise of share warrants with an exercise price of £0.00003 each.
On 20 October 2020, the Company issued 64,128 new ordinary shares upon the
exercise of share warrants with an exercise price of £0.15 each.
On 23 December 2020, the Company issued 1,318,800 new ordinary shares upon the
exercise of share options with an exercise price of £0.15 each.
On 24 February 2021, the Company issued 61,563 new ordinary shares upon the
exercise of share warrants with an exercise price of £0.15 each.
On 25 March 2021, the Company issued 358,713 new ordinary shares upon the
exercise of share warrants with an exercise price of £0.00037 each.
On 31 March 2021, 7 April 2021 and 8 April 2021 the Company issued a total of
44,932,142 new ordinary shares of £0.00037 each in the capital of the Company
at the issue price of 60 pence per share in a Placing, Subscription and Open
Offer for total proceeds of £27 million (before expenses).
On 16 April 2021, the Company issued 467,733 new ordinary shares upon the
exercise of share warrants with an exercise price of £0.00037 each.
On 17 May 2021, the Company issued 40,080 new ordinary shares upon the
exercise of share warrants with an exercise price of £0.00037 each.
On 23 November 2021, the Company issued 66,800 new ordinary shares upon the
exercise of share options with an exercise price of £0.025358 each.
On 9 December 2021, the Company issued 110,000 new ordinary shares upon the
exercise of share options with an exercise price of £0.15 each.
18. Reserves
Share premium
Share premium represents the excess of subscription amounts for the issue of
shares over nominal value of shares issued, less any attributable share issue
costs.
Group re-organisation reserve
The group re-organisation reserve arose on the transaction under which the
Group acquired the Subsidiary by way of a group re-organisation.
Share based payment reserve
Cumulative fair value of options charged to the consolidated income statement
net of transfers to the profit or loss reserve on exercised and
cancelled/lapsed options.
Accumulated losses
Includes all current and prior year retained profits and losses.
Merger reserve
The balance on the merger reserve represents the fair value of the
consideration given in excess of the nominal value of the ordinary shares
issued in an acquisition made by the issue of shares where the transaction
qualifies for merger relief under the Companies Act 2006.
19. Share-based payments
Share options
The Company grants share options at its discretion to Directors, management
and employees. These are accounted for as equity settled transactions. Should
the options remain unexercised after a period of ten years from the date of
grant the options will expire unless an extension is agreed to by the board.
Options are exercisable at a price equal to the Company's quoted market price
on the date of grant or an exercise price to be determined by the board.
Details of share options granted, exercised, lapsed and outstanding at the
year-end are as follows:
Number of share options 2021 Weighted average exercise price (US$) Number Weighted average exercise price (US$)
of share
2021
options 2020
2020
Outstanding at beginning of year 16,884,322 0.19 17,436,722 0.13
Granted during the year 8,580,000 1.11 900,000 0.99
Exercised during the year (176,800) 0.14 (1,318,800) 0.19
Forfeited/lapsed during the year (844,210) 1.01 (133,600) 0.00
Outstanding at end of the year 24,443,312 0.50 16,884,322 0.19
Exercisable at end of the year 13,055,517 0.14 10,239,882 0.12
On 23 December 2020, 900,000 options were granted, with an exercise price of
73 pence per share. 25% of the options shall vest on the one year anniversary
of the employee's date of hire with the remaining 75% vesting in equal
portions over the 36 months following the one year anniversary of the
employee's date of hire.
On 27 April 2021, 1,000,000 options were granted, with an exercise price of 77
pence per share. 25% of the options shall vest on the one-year anniversary of
the employee's date of hire with the remaining 75% vesting in equal portions
over the 36 months following the one year anniversary of the employee's date
of hire.
On 24 June 2021, 250,000 options were granted, with an exercise price of 95
pence per share. 25% of the options shall vest on the one-year anniversary of
the employee's date of hire with the remaining 75% vesting in equal portions
over the 36 months following the one year anniversary of the employee's date
of hire.
19. Share based payments continued
On 07 July 2021, 5,250,000 options were granted, with an exercise price of 93
pence per share . 25% of the options shall vest on the one-year anniversary of
the employee's date of hire with the remaining 75% vesting in equal portions
over the 36 months following the one year anniversary of the employee's date
of hire.
On 26 August 2021, 1,300,000 options were granted, with an exercise price of
87 pence per share . 25% of the options shall vest on one-year anniversary of
the employee's date of hire with the remaining 75% vesting in equal portions
over the 36 months following the one year anniversary of the employee's date
of hire.
On 08 September 2021, 430,000 options were granted, with an exercise price of
89 pence per share. 25% of the options shall vest on the one-year anniversary
of the employee's date of hire with the remaining 75% vesting in equal
portions over the 36 months following the one year anniversary of the
employee's date of hire.
On 21 October 2021, 150,000 options were granted, with an exercise price of 63
pence per share . 25% of the options shall vest on the one-year anniversary of
the employee's date of hire with the remaining 75% vesting in equal portions
over the 36 months following the one year anniversary of the employee's date
of hire.
On 14 December 2021, 200,000 options were granted, with an exercise price of
57 pence per share . 25% of the options shall vest on the one-year anniversary
of the date of hire with the remaining 75% vesting in equal portions over the
36 months following the one year anniversary of the employee's date of hire...
The options outstanding as at 31 December 2021 have an exercise price in the
range of US$0.0041 to US$1.19 (2020: US$0.0041 to US$0.99).
The fair value of options granted during the year has been calculated using
the Black Scholes model which has given rise to fair values per share of
between US$0.43 and US$0.60. This is based on risk-free rates of between 0.60%
and 1.20% and volatility of between 57% and 80%.
The Black Scholes calculations for the options resulted in a charge of
US$1,814,882 (2020: US$474,716) which has been expensed in the year. The
weighted average remaining contractual life of the share options is 6.85 years
(2020: 6.47 years). The weighted average share price at the date of exercise
for all share options exercised during the period was US$0.58 (2020: $0.73).
All share options are equity settled on exercise.
Share warrants
The Company grants share warrants at its discretion to Directors, management,
employees, advisors and lenders. These are accounted for as equity settled
transactions. Terms of warrants vary from agreement to agreement.
Details for the warrants granted, exercised, lapsed and outstanding at the
year-end are as follows:
Number of share warrants 2021 Number of share warrants
Weighted average exercise price (US$) 2020 Weighted average exercise price (US$)
2021 2020
Outstanding at beginning of year 3,994,165 0.09 4,824,703 0.09
Exercised during the year (928,089) 0.34 (830,538) 0.13
Forfeited/lapsed during the year (11,947) 0.34 - -
Outstanding at end of the year 3,054,129 0.01 3,994,165 0.09
Exercisable at end of the year 3,054,129 0.01 3,994,165 0.09
The weighted average remaining contractual life of the share warrants is 2.55
years (2020: 2.81 years). The weighted average share price at the date of
exercise for all share warrants exercised during the period was US$0.68 (2020:
$0.31).
20. Provision for contingent consideration
Group Company
2021 2020 2021 2020
US$
US$
US$
US$
Provision for contingent consideration 316,000 316,000 - -
On 19 December 2011, the Subsidiary entered into an agreement with a third
party to purchase various assets, including patents, trademarks, a license
agreement and physical inventory. As consideration for this transaction, the
Subsidiary agreed to pay 5 per cent. of gross revenue on clinical sales of
products that are sold related to the patents purchased, for seven years from
the date of the commercial sale. As of 31 December 2021, the fair value of
this contingent consideration was US$316,000 (2020: US$316,000). This
liability is valued based on a probability weighted expected return method
using projected future cash flows. There were no significant events in the
year ended 31 December 2021 necessitating revision of the probability weighted
expected value of the contingent consideration.
There was therefore US$Nil profit or loss arising on revaluation of contingent
consideration during the year ended 31 December 2021 (2020: US$Nil).
21. Deferred income
Group Company
2021 2020 2021 2020
US$
US$
US$
US$
Arising from service contracts
Balance brought forward 260,717 239,141 - -
Movement for the year (5,976) 21,576 - -
Balance carried forward 254,741 260,717 - -
Current 108,994 40,763 - -
Non-current 145,747 219,954 - -
Total 254,741 260,717 - -
22. Trade and other payables
Group Company
2021 2020 2021 2020
US$
US$
US$
US$
Trade payables 405,953 388,030 40,887 4,930
Accruals and other payables 1,325,161 960,837 65,129 44,000
1,731,114 1,348,867 106,016 48,930
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and ongoing costs and are payable within 1 year.
The Directors consider the carrying value of all financial liabilities to be
equivalent to their fair value.
23. Changes in liabilities from financing activities
Group
1 January Cash flows Non-cash changes 31 December
2020 US$ US$ 2020
US$ US$
Lease liability 121,369 (122,827) 222,886 221,428
Total liabilities from financing activities 121,369 (122,827) 222,886 221,428
1 January Cash flows Non-cash changes 31 December
2021 US$ US$ 2021
US$ US$
Lease liability 221,428 (143,170) 411,528 489,786
Total liabilities from financing activities 221,428 (143,170) 411,528 489,786
24. Leases
Nature of leasing activities
The group leases properties in the jurisdiction in which it operates with all
lease payments fixed over the lease term.
2021 2020
US$ US$
Number of active leases 2 2
The Group discounts the lease payments using its incremental borrowing rate at
the commencement date of the lease. The weighted-average rate applied is 10%.
Right-of-use assets
Land and Buildings
US$
At 1 January 2020 98,263
Additions 203,156
Amortisation expense (117,206)
At 31 December 2020 184,213
At 1 January 2021 184,213
Additions 378,767
Amortisation expense (140,164)
At 31 December 2021 422,816
24. Leases continued
Lease Liabilities
Land and Buildings
US$
At 1 January 2020 121,369
Additions 203,156
Interest expense 19,730
Lease payments (122,827)
At 31 December 2020 221,428
At 1 January 2021 221,428
Additions 390,427
Interest expense 21,101
Lease payments (143,170)
At 31 December 2021 489,786
Analysis of lease liabilities
Maturity of the lease liabilities is analysed as follows:
2021 2020
US$ US$
Within 1 year 130,949 129,819
Later than 1 year and less than 5 years 358,837 91,609
489,786 221,428
25. Commitments
Royalty commitments
The Subsidiary has entered into three agreements requiring royalty payments.
One agreement is conditional and requires a payment of 5 per cent. of gross
revenue on clinical sales during the payment period beginning on the date a
product is first commercially sold, contingent on receiving FDA approval, and
ending seven years from that date. A separate agreement requires payments of
0.25 per cent of net sales of machines, and 20 per cent of any sublicensing
income for a specific method of use of patent beginning in 2016. Additionally,
beginning five years after the effective date of 1 February 2021, there are
minimum yearly royalties of US$5,000. The third agreement requires a fixed
payment of US$250,000 for use of patents.
26. Financial instruments
The Group has exposure to the following key risks related to financial
instruments:
i. Market risk
ii. Credit risk
iii. Liquidity risk
This note presents information about the Group's exposure to each of the above
risks, the Group's objectives, policies and processes for measuring and
managing risk, and the Group's management of capital. Further quantitative
disclosures are included throughout these consolidated Financial Statements.
The Group uses financial instruments including cash, loans, as well as trade
receivables and payables that arise directly from operations.
Due to the simple nature of these financial instruments, there is no material
difference between book and fair values, discounting would not give a material
difference to the results of the Group and the Directors believe that there
are no material sensitivities that require additional disclosure.
(a) Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Subsidiary. In
order to minimise the risk, the Subsidiary endeavours only to deal with
companies which are demonstrably creditworthy and this, together with the
aggregate financial exposure, is continuously monitored. The maximum exposure
to credit risk is the value of the outstanding amount. The Group considers the
banks and financial institutions have low credit risks. Therefore, the Group
is of the view that the loss allowance is immaterial and hence no provision is
required.
The Directors do not consider that there is any concentration of risk within
either trade or other receivables. There are no impairments to trade or other
receivables in each of the years presented.
Categories of financial instruments
Group Company
Financial assets measured at amortised cost 2021 2020 2021 2020
US$
US$
US$
US$
Cash and cash equivalents 28,874,908 6,282,665 2,454,491 911,271
Loans and receivables
Trade and other receivables - current 119,096 236,657 - 51,184
Trade and other receivables - non-current 5,539 5,539 - -
Financial liabilities measured at amortised cost
Trade and other payables 1,731,114 1,348,867 106,016 48,930
Capital risk management
The Group manages its capital to ensure that it will be able to continue as a
going concern while maximising returns to shareholders through the
optimisation of capital structure. The Group is funded by equity. Equity
comprises share capital, share premium, share-based payment reserves, group
re-org reserves and accumulated losses and is presented in the statement of
financial position. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to shareholders, return capital
to shareholders or issue new shares.
The Group manages the capital structure and makes adjustments to it in the
light of changes to economic conditions and risks.
26. Financial instruments continued
(b) Market risk
There is no interest risk exposure to the group or the company. The Company
made unsecured interest-free loans to its subsidiary and are expected to be
repaid in the future as the subsidiary is revenue generative.
(c) Liquidity risk
A maturity analysis of the Group's financial liabilities is shown below:
Carrying amounts Contractual undiscounted cashflow Less than Two to five years
one year One to two years
US$ US$ US$ US$ US$
2021
Trade and other payables 1,731,114 1,731,114 1,731,114 - -
Lease liabilities 489,786 539,145 154,710 158,135 226,300
2,220,900 2,270,259 1,885,824 158,135 226,300
2020
Trade and other payables 1,348,867 1,348,867 1,348,867 - -
Lease liabilities 221,428 237,631 143,410 82,670 11,551
1,570,295 1,586,498 1,492,277 82,670 11,551
Derivatives
The Group and Company have no derivative financial instruments.
27. Contingent liabilities
The Directors are not aware of any material contingent liabilities, except for
the contingent consideration detailed in note 20.
28. Related party transactions
Remuneration of the key management personnel has been disclosed in Note 5.
29. Events after the reporting period
Between 1 January 2022 and 30 April 2022, the Company issued a total of
3,190,024 new ordinary shares of £0.00037 each in the capital of Company upon
the exercise of share options.
Between 1 January 2022 and 4 May 2022, the Company granted options over a
total of 1,070,000 ordinary shares of £0.00037 each in the capital of Company
to a new employee and two new Directors. The options vest over a four-year
period and have an exercise price equal to the closing price on the date of
grant.
On 13 April 2022 and 4 May 2022, the Company appointed Frank Schulkes,
Non-Executive Director and Daniel Brague, Non-Executive Director to the Board
of Directors, respectively.
On 4 May 2022, Jonathan Allis resigned as Non-Executive Director from the
Board of Directors.
On 4 May 2022, Kenneth West assumed the role of Non-Executive Chairman of the
Board of Directors.
Notice of the Annual General Meeting
POLAREAN IMAGING PLC
(Incorporated in England and Wales under the Companies Act 2006 with company
number 10442853)
NOTICE OF ANNUAL GENERAL MEETING
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you are in any doubt as to what action you should take, you are recommended
to seek your own financial advice from your stockbroker or other independent
adviser authorised under the Financial Services and Markets Act 2000.
If you have recently sold or transferred all of your shares in Polarean
Imaging plc, please forward this document, together with the accompanying
documents, as soon as possible either to the purchaser or transferee or to the
person who arranged the sale or transfer so they can pass these documents to
the person who now holds the shares.
It is intended that the Annual General Meeting (the "AGM") of Polarean Imaging
plc (the "Company") will be held at the Company's office at 2500 Meridian
Parkway, Suite 175, Durham, NC 27713 USA at 2:00 p.m. BST (9:00 a.m. EST) on
29 June 2022. However, it is possible that there may be government
restrictions imposed as a result of the COVID-19 pandemic at that time and
therefore the arrangements for the AGM may be subject to change, possibly at
short notice.
In light of this, we strongly encourage you to vote on all resolutions by
completing an online proxy form in advance of the meeting, appointing the
Chair of the meeting as your proxy, whether or not you are ultimately able to
attend in person. Details of how to do this are set out below. Please note
that if you appoint a person other than the Chair of the meeting as your
proxy, in the event that measures are put in place by the US government which
prevent attendance at the meeting, your proxy may not be able to attend the
AGM and, if this is the case, your votes will not be counted.
NOTICE IS HEREBY GIVEN that the annual general meeting of Polarean Imaging plc (the "Company") will be held at the Company's office at 2500 Meridian Parkway, Suite 175, Durham, NC 27713 USA at 2:00 p.m. BST (9:00 a.m. EST) on 29 June 2022 for the purpose of considering and, if thought fit, transacting the following business:
ORDINARY BUSINESS
To consider and, if thought fit, pass the following resolutions which will be
proposed as ordinary resolutions:
1. To receive and consider the Company's audited accounts for the
year ended 31 December 2021 and the Directors' of the Company (the
"Director(s)") and auditors' reports thereon.
2. To consider and approve the remuneration report as detailed in
the Company's annual report and accounts.
3. To re-appoint Crowe UK LLP as auditor of the Company (the
"Auditor") to hold office until the conclusion of the next general meeting at
which accounts are laid and to authorise the Directors to fix the Auditor's
remuneration.
4. To re-elect Richard Hullihen as a Director, who retires in
accordance with article 78 of the Articles, and who, being eligible, offers
himself for re-election.
5. To re-elect Bastiaan Driehuys as a Director, who retires in
accordance with article 78 of the Articles, and who, being eligible, offers
himself for re-election.
6. To re-elect Frank Schulkes as a Director, who retires in
accordance with article 83 of the Articles, and who, being eligible, offers
himself for re-election.
7. To re-elect Daniel Brague as a Director, who retires in
accordance with article 83 of the Articles, and who, being eligible, offers
himself for re-election.
8. To generally and unconditionally authorise the Directors for
the purpose of section 551 of the Companies Act 2006 (the "Act"), in
substitution for all existing authorities to the extent unused, to exercise
all the powers of the Company to allot or grant rights to subscribe for or to
convert any security into shares in the Company up to an aggregate number of
31,865,998 ordinary shares of £0.00037 each ("Ordinary Shares") (being 15
per cent. of the total number of Ordinary Shares in issue as at the date of
this notice) provided that this authority shall expire on the earlier of 15
months after the date of passing of this resolution or the conclusion of the
annual general meeting of the Company next following the passing of this
resolution, save that the Company may, before such expiry, make an offer or
agreement which would or might require shares or equity securities, as the
case may be, to be allotted or such rights granted after such expiry and the
Directors may allot shares or equity securities or grant such rights, as the
case may be, in pursuance of such offer or agreement notwithstanding that the
authority conferred by this resolution has expired.
SPECIAL BUSINESS
To consider and, if thought fit, pass the following resolution as a special
resolution:
9. Subject to the passing of resolution 8 above, to empower the
Directors, pursuant to the general authority conferred on them and section 570
of the Act, to allot equity securities (within the meaning of section 560 of
the Act) for cash as if section 561 of the Act did not apply to any such
allotment, provided that this power shall be limited to the allotment of
equity securities:
9.1. made in connection with an offer of securities, open for
acceptance for a fixed period, to holders of Ordinary Shares of the Company on
the register on a fixed record date in proportion (as nearly as may be) to
their then holdings of such Ordinary Shares (but subject to such exclusions or
other arrangements as the Directors may deem necessary or expedient to deal
with any legal or practical problems under the laws or requirements of any
recognised regulatory body or any stock exchange in any overseas territory or
in connection with fractional entitlements); and/or
9.2. wholly for cash (otherwise than pursuant to paragraph 7.1
above) up to an aggregate number of 31,865,998 Ordinary Shares.
This authority shall expire on the earlier of 15 months after the date of
passing of this resolution and the conclusion of the annual general meeting of
the Company next following the passing of this resolution but the Company may,
before such expiry, make an offer or agreement which would or might require
shares or equity securities, as the case may be, to be allotted or such rights
granted after such expiry and the Directors may allot shares or equity
securities or grant such rights, as the case may be, in pursuance of such an
offer or agreement notwithstanding that the power conferred by this resolution
has expired.
By Order of the Board
Registered Office:
Stephen Austin 27-28 Eastcastle Street
Company Secretary London
17 May 2022 W1Q 8DH
NOTES
A shareholder entitled to attend and vote at the meeting convened by this
notice is entitled to appoint one or more proxies to exercise all or any of
their rights to attend, speak and vote on their behalf at the AGM. A proxy
need not be a shareholder.
(1) Arrangements for the meeting - COVID-19 outbreak
The continuing coronavirus (COVID-19) pandemic has previously led to the
imposition of severe restrictions on public gatherings. Although it appears as
at the date of this Notice that these will not apply on the date of the AGM,
this remains subject to change. In the event that the AGM venue is closed on
the date of the AGM, physical attendance in person at the AGM will not be
possible, in which case the meeting will take place with the minimum necessary
quorum of two shareholders which will be facilitated by the Company in line
with the Government's social distancing advice as at that time.
On this basis, to safeguard Shareholders' and employees' health and to make
the meeting as safe and as efficient as possible, the Board:
· encourages Shareholders to submit their votes by proxy as early as
possible, and Shareholders should appoint the Chairman of the meeting as their
proxy. If a Shareholder appoints someone else as their proxy, that proxy may
not be able to attend the AGM in person or cast the Shareholder's vote. All
proxy appointments should be received by no later than 2:00 p.m. BST on 27
June 2022;
· strongly recommends CREST members to vote electronically through the
CREST electronic proxy appointment service as your vote will automatically be
counted. In addition, the Company has also decided that Forms of Proxy can
also be submitted by Shareholders electronically (even outside CREST) by
emailing a scanned copy of the signed personalised Form of Proxy to
voting@shareregistrars.uk.com. Please contact Share Registrars Limited contact
number on +44 (0) 1252 821390 for any further guidance. Dealing with paper
proxies requires physical interaction such as post sorting and delivery,
evaluation and manual input. Given the current situation, any task that
requires a physical presence may be subject to disruption and sending a paper
proxy is no guarantee of having your vote counted;
· proposes that voting at the meeting will be conducted by means of a
poll on all resolutions, with each Shareholder having one vote for each share
held, thereby allowing all those proxy votes submitted and received prior to
the meeting to be counted;
· encourages you to submit any question that you would like to be
answered at the meeting by sending it, together with your name as shown on the
Company's register of members and the number of shares held, to the following
email address: polarean@walbrookpr.com so that it is received by no later
than 2:00 p.m. BST on 24 June 2022. Please insert "AGM - Shareholder
Questions" in the subject header box of your email. The Company will endeavour
to respond to all questions received from Shareholders at the AGM or within
seven days following the AGM; and
· will continue to closely monitor the COVID-19 situation in the lead
up to the meeting and make further updates about the meeting on the Company's
website at https://www.polarean-ir.com/content/news/corporate-news as
necessary. Please ensure that you regularly check this page for updates.
(2) To appoint a proxy, shareholders should use the form of
proxy enclosed with this notice of AGM. Please carefully read the instructions
on how to complete the form of proxy. For a proxy to be effective, the
instrument appointing a proxy together with the power of attorney or such
other authority (if any) under which it is signed or a notarised certified
copy of the same must be deposited with the Company's registrars, Share
Registrars Limited of 3 The Millennium Centre, Crosby Way, Farnham, Surrey,
GU9 7XX, United Kingdom (the "Registrars") or by e-mail to
voting@shareregistrars.uk.com, by 2:00 p.m. BST on 27 June 2022, or, if the
AGM is adjourned, 48 hours before the time fixed for the adjourned meeting
(excluding any part of a day that is not a business day). The completion and
return of a form of proxy does not preclude a shareholder from subsequently
attending and voting at the AGM in person if he or she so wishes. If a
shareholder has appointed a proxy and attends the AGM in person, such proxy
appointment will automatically be terminated.
(3) Pursuant to Regulation 41 of Uncertificated Securities
Regulations 2001, the Company specifies that only those shareholders on the
register of members at 2:00 p.m. BST on 27 June 2022 or, if the meeting is
adjourned, 48 hours before the time of the adjourned meeting (excluding any
part of a day that is not a business day), shall be entitled to attend or vote
at the AGM in respect of the number of ordinary shares of £0.00037 each (the
"Ordinary Shares") registered in their name at that time. Changes to the
register of members after that time shall be disregarded in determining the
rights of any person to attend or vote at the AGM.
(4) Any Shareholder may insert the full name of a proxy or
the full names of two alternative proxies of the Shareholder's choice in the
space provided with or without deleting 'the Chairman of the meeting.' A proxy
need not be a Shareholder but must attend the meeting to represent the
relevant Shareholder. The person whose name appears first on the Form of Proxy
and has not been deleted will be entitled to act as proxy to the exclusion of
those whose names follow. If this proxy form is signed and returned with no
name inserted in the space provided for that purpose, the Chairman of the
meeting will be deemed to be the appointed proxy. Where a Shareholder appoints
as his/her proxy someone other than the Chairman, the relevant Shareholder is
responsible for ensuring that the proxy attends the meeting and is aware of
the Shareholder's voting intentions. Any alteration, deletion or correction
made in the Form of Proxy must be initialled by the signatory/ies.
(5) A shareholder may appoint more than one proxy provided
that each proxy is appointed to exercise the rights attached to a different
Ordinary Share or Ordinary Shares held by that shareholder. A shareholder may
not appoint more than one proxy to exercise rights attached to any one
Ordinary Share. If a shareholder wishes to appoint more than one proxy, they
should contact the Registrars on 01252 821390, +44 1252 821390 from overseas.
Lines are open from 9.00 a.m. to 5.30 p.m. Monday to Friday, excluding public
holidays. Alternatively, you may write to the Registrars at Share Registrars
Limited, 3 The Millennium Centre, Crosby Way, Farnham, Surrey, GU9 7XX, United
Kingdom for additional proxy forms and for assistance.
(6) Any corporation which is a shareholder can appoint one
or more corporate representatives who may exercise on its behalf all of its
powers as a shareholder provided that they do not do so in relation to the
same Ordinary Share.
(7) As at the close of business on the date immediately
preceding this notice, the Company's issued share capital comprised
212,439,990 Ordinary Shares. Each Ordinary Share carries the right to vote at
the AGM and, therefore, the total number of voting rights in the Company as at
close of business on the date immediately preceding this notice is
212,439,990.
(8) A shareholder's instructions to the proxy must be
indicated in the appropriate space provided. To abstain from voting on a
resolution, select the relevant 'Vote withheld' box. A vote withheld is not a
vote in law, which means that the vote will not be counted in the calculation
of votes for or against the resolution. If no voting indication is given, your
proxy will vote or abstain from voting at his or her discretion. Your proxy
will vote (or abstain from voting) as he or she thinks fit in relation to any
other matter which is put before the meeting.
(9) This form of proxy must be signed by the appointor, or
his attorney duly authorised in writing. The power of attorney or other
authority (if any) under which the form of proxy is signed, or a notarised
certified copy of the power or authority, must be received by the Registrars
with the form of proxy. If the appointor is a corporation, the form of proxy
should be signed on its behalf by an attorney or duly authorised officer or
executed as a deed or executed under common seal. In the case of joint
holders, the signature of any one of them will suffice, but the names of all
joint holders should be stated.
(10) CREST members who wish to appoint a proxy or proxies
through the CREST Electronic Proxy Appointment Service may do so for the AGM
to be held at 2:00 p.m. BST on 29 June 2022 and any adjournment(s) thereof by
following the procedures described in the CREST manual. All messages relating
to the appointment of a proxy or an instruction to a previously appointed
proxy, which are to be transmitted through CREST, must be received by the
Registrars (ID 7RA36) no later than 2:00 p.m. BST on 27 June 2022, or, if the
AGM is adjourned, 48 hours before the time fixed for the adjourned meeting
(excluding any part of a day that is not a business day).
(11) In order to revoke a proxy instruction, you will need to
inform the Company by sending a signed hard copy notice clearly stating your
intention to revoke your proxy appointment to the Registrars. In the case of a
shareholder which is a company, the revocation notice must be executed in
accordance with note 12 below. Any power of attorney or any other authority
under which the revocation notice is signed (or a duly certified copy of such
power or authority) must be included with the revocation notice and must be
received by the Registrars not less than 48 hours (excluding any part of a day
that is not a business day) before the time fixed for the holding of the AGM
or any adjourned meeting (or in the case of a poll before the time appointed
for taking the poll) at which the proxy is to attend, speak and to vote. If
you attempt to revoke your proxy appointment but the revocation is received
after the time specified then, subject to the paragraph directly below, your
proxy appointment will remain valid.
(12) A corporation's form of proxy must be executed under
either its common seal, if any, or under the hand of a duly authorised officer
or attorney, in each case as required under the laws of its relevant
jurisdiction.
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