REG - ReNeuron Group plc - Unaudited Preliminary Results
25/05/2023 07:00
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RNS Number : 5756A ReNeuron Group plc 25 May 2023
ReNeuron Group plc
("ReNeuron", the "Company" or "the Group")
Unaudited Preliminary Results for the year ended 31 March 2023
Creating a valuable and differentiated Drug Delivery Platform
ReNeuron Group plc (AIM: RENE), a UK based leader in stem cell derived exosome
technologies, announces its unaudited preliminary results for the year ended
31 March 2023.
FINANCIAL HIGHLIGHTS
· Revenue for the year of £0.5 million (2022: £0.4 million) from
partner funded development activities and royalty income.
· Cash, cash equivalents and bank deposits at 31 March 2023 of
£7.2 million (31 March 2022: £14.5 million) with cash runway extended to
2024.
· Reduced operating costs in the year of £7.6 million (2022:
£11.6 million) primarily due to reduction in clinical trial related costs.
Full benefit of the January 2023 restructuring will be realised in FY24.
· Loss for the year of £5.4 million (2022: loss of £9.7
million), driven by lower costs and increased revenue.
OPERATIONAL HIGHLIGHTS
· The Company's R&D team established CustomEX™, the first
scalable, consistent, targeted and customisable stem cell-derived exosome drug
delivery platform.
· Proof-of-concept studies established unique in vitro targeting and
delivery characteristics for all seven exosome populations and demonstrated a
significant improvement in uptake and subsequent delivery of a therapeutic
siRNA cargo using the CustomEX™ platform compared to current delivery
methods and a HEK 293-derived exosome.
· In vivo studies to generate data to further validate the cellular and
tissue targeting capabilities and subsequent functional delivery of
therapeutic payloads using the CustomEX(TM) platform are ongoing.
· ReNeuron negotiated and signed the CTX Technology Transfer
Supplemental Terms Agreement with Fosun Pharma (1 July 2022
(https://www.londonstockexchange.com/news-article/RENE/fosun-tech-transfer-and-supply-agreement-update/15520951)
), underscoring Fosun Pharma's continued commitment to the CTX stroke
disability programme
· Senior leadership team changes: Appointment of Iain Ross as Executive
Chairman, John Hawkins joined the Board as Chief Financial Officer, Dr.
Randolph Corteling assumed the role of Chief Scientific Officer, Suzanne
Hancock was appointed as Chief Operations Officer and Simon Dew as Chief
Business Officer. Catherine Isted stepped down as Chief Executive Officer.
· Professor Stefano Pluchino assumed the role of Chair of the new
Scientific Advisory Board (SAB) that has been established, composed of leading
academics and industry executives, Prof. Giuseppe (Beppe) Battaglia, Prof.
Edit I Buzás, Prof. Dr. rer. nat. Bernd Giebel and Prof. Kenneth W. Witwer.
· Restructuring of the business with an internal operational
re-alignment in line with the business needs resulting in a reduction of
headcount of 40% and a lowering of the variable costs of the business.
Executive Chairman, Iain Ross, commented: "During the last year the Company
has undergone a complete transition including an organisational restructuring;
a change in management and a strategic re-alignment, to create sustainable
value for shareholders with the emphasis on the development, partnering and
potential licensing of CustomEX(TM), our proprietary drug delivery platform.
During the period under review the underlying cost base has been reduced and
resources re-aligned to meet the immediate needs of the business. I remain
very excited about the Company's potential as we are on course to generate
validating data which would allow us to complete partnering and license deals
in the coming year which will transform the Company."
Investor Briefing
Iain Ross, Executive Chairman, John Hawkins, Chief Financial Officer and Dr
Randolph Corteling, Chief Scientific Officer will be hosting a live online
presentation relating to the preliminary results via the Investor Meet Company
platform today at 9.30am BST. The presentation is open to all existing and
potential shareholders.
Investors can sign up to Investor Meet Company for free and register for the
presentation here:
https://www.investormeetcompany.com/reneuron-group-plc/register-investor
(https://www.investormeetcompany.com/reneuron-group-plc/register-investor)
Enquiries:
ReNeuron www.reneuron.com/investors (http://www.reneuron.com/investors)
Iain Ross, Executive Chairman Via Walbrook PR
John Hawkins, Chief Financial Officer
Allenby Capital Limited (Nominated Adviser and Broker) +44 (0)20 3328 5656
James Reeve/George Payne/Dan Dearden-Williams (Corporate Finance)
Stefano Aquilino (Sales & Corporate Broking)
Walbrook PR (Media & Investor Relations) +44 (0)20 7933 8780 or reneuron@walbrookpr.com
(mailto:reneuron@walbrookpr.com)
Paul McManus / Alice Woodings +44 (0)7980 541 893 / +44 (0)7407 804 654
About ReNeuron
ReNeuron has developed a proprietary stem cell-derived, exosome-based, drug
delivery platform with customisable cellular targeting capabilities for the
delivery of complex drug modalities.
Through the generation of several unique and scalable exosome producer cell
lines, our CustomEX™ platform can be optimised for specific tissues targets
and payloads leading to improvements in therapeutic outcome and a reduction in
off-target effects. ReNeuron offers a delivery mechanism for a variety of
payloads such as siRNA, mRNA, proteins, small molecules and genes. Through its
conditionally immortalised induced pluripotent stem cell (iPSC) platform, the
Company can make allogeneic tissue cells of choice and has the potential to
produce exosomes with tissue specific targeting ability.
ReNeuron's shares are traded on the London AIM market under the symbol RENE.L.
For further information visit www.reneuron.com (http://www.reneuron.com/)
This announcement contains forward-looking statements with respect to the
financial condition, results of operations and business
achievements/performance of ReNeuron and certain of the plans and objectives
of management of ReNeuron with respect thereto. These statements may
generally, but not always, be identified by the use of words such as "should",
"expects", "estimates", "believes" or similar expressions. This announcement
also contains forward-looking statements attributed to certain third parties
relating to their estimates regarding the growth of markets and demand for
products. By their nature, forward-looking also statements involve risk and
uncertainty because they reflect ReNeuron's current expectations and
assumptions as to future events and circumstances that may not prove
accurate. A number of factors could cause ReNeuron's actual financial
condition, results of operations and business achievements/performance to
differ materially from the estimates made or implied in such forward-looking
statements and, accordingly, reliance should not be placed on such statements
Preliminary Results for the year ended 31 March 2023
EXECUTIVE CHAIRMAN'S STATEMENT
Dear Shareholders,
Our immediate strategic focus remains primarily on our CustomEX(TM) Exosome
Technology Platform, producing exosomes with unique tissue targeting
capabilities to deliver a payload of choice to a preferred cell type. Our
mission is, in collaboration with academic and industry partners, to develop
novel exosome therapeutics for diseases with significant unmet needs.
CustomEX(TM) provides a unique delivery mechanism for a variety of payloads
including nucleic acids, proteins, and gene editing technologies. We use our
conditionally immortalised induced pluripotent stem cell (CI-iPSC) platform to
make allogeneic tissue cells of choice, which have the potential to produce
exosomes with tissue specific targeting ability. Both platforms are
supported by an extensive and proprietary intellectual property portfolio.
Our overall strategic goal is to exploit the global drug delivery market
opportunity by providing exosomes as a vector to facilitate the delivery of
therapeutics. It is estimated that the supply of viral and non-viral vectors
is worth c. $2.1 billion(1) today increasing up to $3.9 billion(1) by 2026
and there is considerable academic and industry interest in the development of
next-generation delivery vectors such as exosomes. Over the past few years,
peer companies have raised $403 million(2) in support of exosome-based
activities and secured exosome related license agreements with potential
revenues in excess of $3 billion(2). We believe our stem-cell derived exosomes
can potentially overcome issues such as tissue specificity, crossing the
blood-brain barrier and unwanted immune activation, which have hampered
first-generation drug delivery platforms. So, through the combination of our
two proprietary platforms we are competitively well positioned to exploit this
growing market opportunity.
Financial highlights
In January 2023, the Company undertook a restructuring of the business,
reducing headcount by 40% and lowering variable costs of the business, with
the latest forecasted cash runway now extending into mid-calendar year 2024.
The full benefit of the cost savings from this restructuring will not be seen
until financial year 2024. Revenue for the year was £0.5 million (2022:
£0.4 million) related to income from partner funded development activities
and royalty income. We also saw reduced operating costs of £7.6 million
(2022: £11.6 million) primarily due to a reduction in clinical trial related
costs following the strategic review in January 2022. This reduction was
partly offset by additional investment made in the exosome technology
platform.
Net cash used in operating activities was £7.5 million (2022: £7.4
million). Cash used was higher than the loss for the period which is explained
by changes in working capital and capital investment made to support exosome
platform development. Cash, cash equivalents and bank deposits at 31 March
2023 were £7.2 million (31 March 2022: £14.5 million). Loss for the year
was £5.4 million (2022: loss of £9.7 million), the reduction being driven
by lower costs and increased revenue as noted above.
Corporate and Organisational Development
There have been several senior leadership team changes over the last 12
months. In September 2022, the Company announced that John Hawkins had been
promoted to Chief Financial Officer and joined the ReNeuron Board, Dr.
Randolph Corteling assumed the role of Chief Scientific Officer, Suzanne
Hancock was appointed as Chief Operations Officer and Simon Dew, an
experienced business development professional with significant track record of
dealmaking in the exosome filed, would be joining the Company as Chief
Business Officer.
In December 2023, Catherine Isted stepped down as Chief Executive Officer and
Iain Ross was appointed as Executive Chairman. Subsequently the Company
undertook a restructuring of the business with an internal operational
re-alignment in line with the business needs resulting in a reduction of
headcount of 40% and a lowering of the variable costs of the business.
Professor Stefano Pluchino assumed the role of Chair of the new Scientific
Advisory Board (SAB) combining working with ReNeuron with his academic work in
Exosomes and Regenerative Neuroimmunology at the University of Cambridge. The
new exosome focused SAB has also been established composed of leading
academics and industry executives, Prof. Giuseppe (Beppe) Battaglia, Prof.
Edit I Buzás, Prof. Dr. rer. nat. Bernd Giebel and Prof. Kenneth W. Witwer
and chaired by Prof. Stefano Pluchino. This new SAB brings a world-class
breadth of expertise across the extracellular vesicle (EV) field. Its role is
to advise the Company on scientific matters relating to its exosome platform
research and development strategy.
Research & Development
In FY22 the Company's R&D team established CustomEX™, the first
scalable, consistent, targeted and customisable stem cell-derived exosome drug
delivery platform. This unique exosome platform is based upon the exosomes
produced from different stem cells having the unique cellular targeting
properties of the stem cells from which the exosomes were produced.
Proof-of-concept studies have determined unique in vitro targeting and
delivery characteristics for all seven exosome populations and demonstrated a
significant improvement in uptake and subsequent delivery of a therapeutic
siRNA cargo using the CustomEX™ platform compared to current delivery
methods and a HEK 293-derived exosome.
Further proof-of-concept in vivo studies are ongoing to validate the benefits
observed in vitro of the CustomEX(TM) platform to deliver therapeutic cargoes
To demonstrate the enhanced utility of the CustomEX™ drug delivery platform,
the R&D team has made significant improvements to the loading of nucleic
acid cargos. In-house optimisation and further modifications to the downstream
manufacturing process has led to increases in exosome concentration and
purity, leading to an approximate 30-fold increase in siRNA being associated
with CustomEX™ exosomes. In addition, further in vitro proof-of-concept for
our engineered exosome product, Exo-BDNF was established through a
collaboration with Cardiff University that demonstrated the products efficacy
to improve retinal ganglion cell survival in a model of glaucoma.
The Group's iPSC platform continues to support the expansion of the
CustomEX™ platform and following Dr Pell's presentation at the 2(nd) iPSC
derived Cell Therapy Summit in December, there is growing interest in the
platform in its own right. ReNeuron's iPSCs were developed from the Group's
conditionally immortalised CTX stem cell line. This immortalisation
characteristic is retained by the iPSCs (conditionally immortalised iPSCs or
CI-iPSCs), allowing subsequent cell lines to be rapidly developed that benefit
from their highly stable and reproducible expansion. Investigation into the
utility of CI-iPSCs continues with two groups at University College London
(UCL), firstly investigating the potential use of CI-iPSCs to generate CAR-T /
CAR-NK cells and secondly with a separate group at UCL investigating the
ability to differentiate into Schwann cells for potential use in peripheral
nerve damage repair.
In July, ReNeuron negotiated and signed the CTX Technology Transfer
Supplemental Terms Agreement with Fosun Pharma, underscoring Fosun Pharma's
continued commitment to the CTX stroke disability programme. In addition to
the £320k upfront payment received in January 2022 for services delivered in
FY23, ReNeuron has received approximately a further £100k for supply of
initial CTX working cell bank vials and additional ReNeuron resources and
project related costs; with further milestone payments expected in accordance
with defined project milestones. Under the Technology Transfer agreement there
is potential for the Group to receive up to £5 million over the medium to
long term, with further potential milestone payments of up to £74 million
linked to the main license agreement signed in 2019.
In 2022, Dr Corteling was a guest speaker at two international conferences
where he presented, for the first time, the full breadth of the Group's
CustomEX™ exosome platform. Consisting of four distinct neural producer stem
cell lines (cortical, striatal, hippocampal and mesencephalic), three
non-neural stem cell lines (liver, retinal and pancreatic), and its
conditionally immortalised induced pluripotent stem cell line (CI-iPSCs) which
can be used to produce further exosome producer cell lines depending on the
target required.
Outlook
As of today, ReNeuron has seven proprietary, conditionally immortalised
exosome producer stem cell lines. We believe that our catalogue of proprietary
stem cells, from neural and non‑neural tissue, differentiates us from
competitors in the field and leads to a greater chance of success for
optimised delivery of a payload to a particular target. The Company has years
of experience and knowledge in the manufacture of consistent stem cell banks
to good manufacturing practice (GMP), including two investigation new drugs
(INDs), and is continuing to work with third parties to develop improvements
in downstream processing and analytics.
In summary, over the next 3-6 months the Company will continue to develop its
exosome platform, generating in vivo data exemplifying the cellular and
tissue targeting capabilities of exosomes produced from its multiple
conditionally immortalised producer cell lines and the subsequent functional
delivery of therapeutic payloads. Favourable in vivo data will allow the
Group to differentiate its exosome platform and progress ongoing partnering
and licensing discussions. The Board has identified a number of potential
sources of revenue and non-dilutive funding in order to maintain the business
as a going concern and is confident it will be able to conclude third party
transactions and/or issue new equity as required. Such transactions will
further strengthen and differentiate our exosomes platform, highlighting our
potential leadership in the field.
Finally, I would like to thank past and present members of the Board,
Management team and staff for their continued commitment and hard work
throughout what has been a tough and challenging year. I would especially like
to thank Catherine Isted for her contribution as CFO and latterly as CEO and
to wish her well in the future.
I look forward to an exciting and rewarding year ahead and would like to thank
the shareholders for their continued support.
Iain Ross
Executive Chairman
FINANCIAL REVIEW
During the financial year costs continued to be closely controlled with spend
primarily directed towards progressing the CustomEX(TM) proprietary exosome
platform. In January 2023, the Company undertook a restructuring of the
business with headcount reducing by 40% and the variable costs of the business
lowered.
The full benefit of these cost savings will not be seen until the next
financial year, but the decision made in January 2022 to shift away from
clinical development programmes to the exosome platform has enabled a
reduction in costs of £4.0 million compared to the year ended 31 March 2022.
As a result, the total comprehensive loss for the year reduced to £5.4
million (2022: £9.7 million).
At 31 March 2023, the Group had cash, cash equivalents and bank deposits of
£7.2 million with the latest base case forecast showing a cash runway to July
2024. This base case forecast includes assumed further revenues/funding.
Without such revenues/funding, the forecast indicates a cash runway until
February 2024. Details on the Directors' assessment on going concern is
provided in note 3 to the condensed financial statements.
FINANCIAL HIGHLIGHTS Year ended 31 Year ended 31
(£'000) March 2023 March 2022
Cash, cash equivalents & bank deposits 7,153 14,548
Net cash used in operating activities 7,484 7,411
Revenue 530 403
Operating expenses 7,645 11,631
Total comprehensive loss 5,408 9,689
Revenue and Other Operating Income
In the year to 31 March 2023, revenues, which relate to research and
collaboration activities and royalty income, were £530,000 (2022: £403,000).
Operating expenses
Total operating expenses reduced in the year to £7.6 million (2022:
£11.6 million).
As noted above, this reduction in costs follows the strategic decision made in
January 2022 to halt clinical development and instead focus resources on the
exosome platform. Research and development costs in the year reduced to £4.5
million (2022: £8.1 million), primarily reflecting the refocussing of
activities as described above, together with other cost reductions. General
and administrative expenses also reduced in the year to £3.2 million (2022:
£3.6 million).
Finance income/expense
Finance income represents income received from the Group's cash and
investments and gains from foreign exchange.
Finance income was £478,000 in the period (2022: £195,000), the increase on
the prior year being explained by an increase in both interest receivable and
foreign exchange gains. In the year, finance expense solely comprises lease
interest of £20,000 (2022: £25,000).
Taxation
Taxation for the year at £1.2 million primarily comprises an R&D tax
credit (2022: £1.4 million). The amount of the R&D tax credit for the
year has reduced as a result of the lower research and development spend in
the period.
Cash flow
Net cash used in operating activities in the year increased to £7.5 million
(2022: £7.4 million). Cash used was higher than the loss for the period
explained by changes in working capital and capital investment made to support
exosome platform development.
The Group had cash, cash equivalents and bank deposits totalling
£7.2 million as of 31 March 2023 (31 March 2022: £14.5 million).
Statement of financial position
Non-current assets - Property, plant and equipment have increased as we invest
in our exosome technology platform.
Current assets - Corporation tax receivable of £1.2 million comprises the
amount due from R&D tax credits for the full year ended 31 March 2023
(2022: £1.4 million). This debtor is lower than 2022 due to the reduction in
research and development expenditure.
Current liabilities - Trade and other payables at £4.2 million have reduced
(2022: £6.9 million). This reduction primarily reflects changes in the level
of accruals (mainly across the legacy clinical trials).
John Hawkins
Chief Financial Officer
Financial Statements
Condensed Consolidated Statement of Comprehensive Income
for the year ended 31 March 2023
Unaudited Audited
2023 2022
Note £'000 £'000
Revenue 530 403
Research and development costs 4,5 (4,463) (8,068)
General and administrative costs 5 (3,182) (3,563)
Operating loss (7,115) (11,228)
Finance income 478 195
Finance expense (20) (25)
Loss before income tax (6,657) (11,058)
Taxation 6 1,249 1,369
Loss and total comprehensive loss for the year (5,408) (9,689)
Loss and total comprehensive loss attributable to equity owners of the Company
(5,408) (9,689)
Basic and diluted loss per ordinary share 7 (9.5p) (17.0p)
Condensed Consolidated Statement of Financial Position
as at 31 March 2023
Unaudited Audited
2023 2022
Note £'000 £'000
Assets
Non-current assets
Property, plant and equipment 338 288
Right-of-use asset 283 373
Intangible assets 186 186
807 847
Current assets
Trade and other receivables 500 536
Income tax receivable 1,185 1,392
Investments - bank deposit - 5,000
Cash and cash equivalents 7,153 9,548
8,838 16,476
Total assets 9,645 17,323
Equity
Equity attributable to owners of the Company
Share capital 572 571
Share premium account 113,925 113,925
Capital redemption reserve 40,294 40,294
Merger reserve 2,223 2,223
Accumulated losses (151,957) (147,125)
Total equity 5,057 9,888
Liabilities
Current liabilities
Trade and other payables 4,167 6,873
Lease liabilities 153 146
4,320 7,019
Non-current liabilities
Lease liabilities 268 416
268 416
Total liabilities 8 4,588 7,435
Total equity and liabilities 9,645 17,323
Condensed Consolidated Statement of Changes in Equity
for the year ended 31 March 2023
Share Capital
Share premium redemption Merger Accumulated Total
capital account reserve reserve losses equity
£'000 £'000 £'000 £'000 £'000 £'000
As at 1 April 2021 569 113,904 40,294 2,223 (138,085) 18,905
Issue of ordinary shares 2 21 - - - 23
Credit on share-based
payment - - - - 649 649
Loss and total comprehensive
loss for the year - - - - (9,689) (9,689)
As at 31 March 2022 (audited)
571 113,925 40,294 2,223 (147,125) 9,888
Issue of ordinary shares 1 - - - - 1
Credit on share-based
payment - - - - 576 576
Loss and total comprehensive
loss for the year - - - - (5,408) (5,408)
As at 31 March 2023
(unaudited) 572 113,925 40,294 2,223 (151,957) 5,057
Condensed Consolidated Statement of Cash Flows
for the year ended 31 March 2023
Unaudited Audited
Restated
2023 2022
Note £'000 £'000
Cash flows from operating activities
Cash used in operations 9 (8,920) (9,196)
Overseas taxes paid (5) (52)
Income tax credit received 1,461 1,862
Interest paid (20) (25)
Net cash used in operating activities (7,484) (7,411)
Cash flows from investing activities
Capital expenditure - Fixed Assets (220) (302)
Bank deposit matured 2 5,000 2,500
Interest received 131 26
Net cash generated from investing activities 4,911 2,224
Cash flows from financing activities
Proceeds from the issue of ordinary shares 1 23
Lease payments (148) (157)
Net cash used in financing activities (147) (134)
Net decrease in cash and cash equivalents (2,720) (5,321)
Effect of FX movements on cash balances 326 166
Cash and cash equivalents at the start of year 9,548 14,703
Cash and cash equivalents at the end of the year 7,153 9,548
Notes to the Financial Statements
for the year ended 31 March 2023
1. General information
ReNeuron Group plc ("the Company") and its subsidiaries (together the "Group")
are engaged in the research and development of therapies using stem cells. The
Company is a public limited company incorporated and domiciled in England with
registered number 05474163. Its shares are admitted to trading on the AIM
market of the London Stock Exchange.
2. Basis of preparation
The unaudited financial information included in this preliminary results
announcement for the year ended 31 March 2023 and audited financial
information for the year ended 31 March 2022 does not comprise statutory
accounts within the meaning of section 434 of the Companies Act 2006. The
information has been extracted from the draft statutory financial statements
for the year ended 31 March 2023 which will be delivered to the Registrar of
Companies in due course and the report of the auditors for these statutory
financial statements is expected to include an emphasis of matter in respect
of a material uncertainty in relation to going concern, as further outlined in
note 3. Statutory financial statements for the year ended 31 March 2022 were
approved by the Board of directors on 11 August 2022 and have been delivered
to the Registrar of Companies. The report of the auditors on these financial
statements also included an emphasis of matter in respect of a material
uncertainty in relation to going concern.
The prior year statement of cash flows has been restated due to a
reclassification from financing activities to investing activities of a £2.5m
cash inflow relating to the maturity of short term investments. This
restatement does not impact the opening or closing cash balances.
The financial statements have been prepared in accordance with UK-adopted
International Accounting Standards and with the requirements of the Companies
Act 2006 as applicable to companies reporting under those standards.
Whilst the financial information included in this preliminary announcement has
been prepared in accordance with IFRS, this announcement does not contain
sufficient information to comply with IFRS. The accounting policies used in
the preparation of these unaudited financial statements are consistent with
those used in the preparation of the audited financial statements for the year
ended 31 March 2022.
3. Going concern
The operations of the Group are financed from funds that have been raised from
share placings, commercial partnerships and grants.
The goal of the Group is to achieve the commercial validation of the
CustomEx(TM) platform by generating in vivo data aimed at differentiating the
platform from that of the Group's competitors. In addition, the plan is to
realise value from the Group's other assets via potential out-licencing and/or
disposal. The Directors continue to seek opportunities to secure further
revenues/funding sufficient for the short to medium term future needs of the
business and favourable in vivo data should enhance those opportunities.
As previously noted, in January 2023, the Group undertook a restructuring of
the business with the underlying cost base reduced and resources re-aligned to
meet the immediate needs of the business. Based on the Directors' base case
assessment, the current cash runway is forecast to extend until July 2024, at
which point a further capital injection would be required. The base case
assessment includes assumed upfront payments over the next 6 to 12 months from
potential future partners and collaborators on the Group's exosome platform,
intellectual property (IP) and legacy assets and potential further equity fund
raising. The Directors recognise that not all of these assumed inflows are
fully within the control of the Group and Company and have prepared a further
plausible but downside scenario which excludes these inflows and indicates a
cash runway until February 2024.
Based on the forecasts prepared and considered by the Board, the Directors
consider it appropriate to continue to adopt the going concern basis in the
preparation of these preliminary results. However, there is no guarantee that
attempts to secure adequate cash inflows from the Group's exosome platform, IP
and legacy assets or through equity fund raising with the timescales stated
above will be successful. These conditions indicate the existence of a
material uncertainty, which may cast significant doubt about the Group's and
Company's ability to continue as a going concern. These condensed financial
statements do not include the adjustments that would result if the Group and
Company were unable to continue as a going concern.
4. Research and development costs
All research and development costs incurred in the year have been charged
directly to the Group Statement of Comprehensive Income.
5. Operating expenses
Unaudited Audited
2023 2022
£'000 £'000
Loss before income tax is stated after charging:
Research and development costs:
Employee benefits 2,162 2,530
Depreciation of property, plant and equipment 159 199
Other expenses 2,141 5,339
Total research and development costs 4,463 8,068
General and administrative costs:
Employee benefits 1,943 2,308
Legal and professional fees 596 176
Depreciation of property, plant and equipment 10 25
Depreciation of right-of-use asset 97 100
Loss on disposal of fixed assets - 3
Other expenses 535 951
Total general and administrative costs 3,182 3,563
Total research and development costs and general and
administrative costs 7,645 11,631
6. Taxation
Unaudited Audited
2023 2022
£'000 £'000
UK research and development tax credit at 14.5% (2022: 14.5%) 1,185 1,392
Overseas taxation (5) (53)
Adjustments in respect of prior years 69 30
1,249 1,369
No corporation tax liability arises on the results for the year due to the
loss incurred. As a loss-making small and medium-sized enterprise, the Group
is entitled to research and development tax credits at 14.5% (2022: 14.5%) on
230% (2022: 230%) of qualifying expenditure for the year to 31 March 2023.
No deferred tax asset has been recognised by the Group as there are currently
no foreseeable trading profits.
7. Basic and diluted loss per ordinary share
The basic and diluted loss per share is calculated by dividing the loss for
the financial year of £5,408,000 (2022: £9,689,000) by 57,125,960 shares
(2022: 56,975,677 shares), being the weighted average number of 1 penny
Ordinary shares in issue during the year.
Potential Ordinary shares are not treated as dilutive as the entity is loss
making.
8. Ageing profile of financial liabilities
Unaudited Audited
2023 2022
£'000 £'000
Trade and other payables due within twelve months 4,167 6,873
Current lease liabilities - due within one year 153 146
Non-current lease liabilities - due after more than one year 268 416
4,588 7,435
9. Cash used in operations
Unaudited Audited
Yearended Year ended
31-Mar 31-Mar
2023 2022
£'000 £'000
Loss before income tax (6,657) (11,058)
Adjustments for:
Finance income (478) (195)
Finance expense 20 25
Depreciation of property, plant and equipment 170 224
Depreciation of right-of-use-asset 97 100
Loss on disposal of fixed assets - 3
Share-based payment charges 576 649
Changes in working capital:
Receivables 58 (90)
Payables (2,706) 1,146
Cash used in operations (8,920) (9,196)
10. Reconciliation of net cash flow to movement in net debt
Unaudited Audited
2022 2021
£'000 £'000
Decrease in cash and cash equivalents (2,720) (5,321)
Effect of foreign exchange differences 326 166
Cash inflow from increase in lease liability (7) -
Lease repayments 168 182
Lease interest (20) (25)
Net funds at start of period 8,986 13,984
Net funds at end of period 6,732 8,986
11. Analysis of net funds
Unaudited Audited
2023 2022
£'000 £'000
Cash and cash equivalents 7,153 9,548
Lease liabilities (421) (562)
Net funds 6,732 8,986
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