REG - Roquefort Theraptcs. - Annual Report & Financial Statements
11/05/2022 07:01
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RNS Number : 9878K Roquefort Therapeutics PLC 11 May 2022
11 May 2022
Roquefort Therapeutics plc
("Roquefort Therapeutics" or the "Company")
Annual Report & Financial Statements for period ended 31 December 2021
Roquefort Therapeutics (LSE:ROQ), the Main Market listed biotech company
focused on early-stage opportunities in the medical biotechnology sector,
announces its audited results for period ended 31 December 2021.
Copies of the Annual Report and Financial Statements will be posted to
shareholders and made available on the Company's website at:
https://www.roquefortplc.com/category/financial-reports/
(https://www.roquefortplc.com/category/financial-reports/)
Highlights
· Acquisition of Lyramid Pty Limited ("Lyramid") for £1 million
(before adjustments), a combination of cash and shares via a Reverse Take Over
· Expert in molecular virology and cancer and a leading global expert
on Midkine, Professor Graham Robertson joined Roquefort as Chief Scientific
Officer from Lyramid
· Commencement of Lyramid's pre-clinical programme
· Fully funded to deliver drug candidate to clinical trials by H2 2023
Post Period End Highlights
· Lead compounds identified for cancer programme
· Midkine patent filed following positive pe-clinical in vitro trials
· Significantly strengthened the Board with two highly experienced
sector NED appointments
· Professor Trevor Jones appointment as advisor to the Board
· Cash at the bank as at 30 April 2022: £2.47 million
Commenting on the Annual Results, Executive Chairman, Stephen West said: "I am
pleased to report the first annual results to shareholders as a biotech
company. The Company has made significant progress as a biotech entity which
culminated in the acquisition of Lyramid and its pre-clinical drug development
programmes in December 2021. We believe Lyramid to be a clear market leader
in Midkine inhibiting RNA therapeutic drugs with its exclusive worldwide
licence to commercialise up to 37 patents for the treatment of cancer
patients, autoimmune disorders, chronic kidney disease and Covid-19.
Since the year-end we have made progress with our pre-clinical programme, and
selected our most promising lead drug candidates in cancer. The Company then
filed a patent application for a new class of RNA therapeutic drugs targeting
Midkine following the highly encouraging pre-clinical data. To help drive
the Company forward towards commercialisation, the Board has also been
strengthened immensely with the appointments of pharmaceutical industry
heavyweights, Simon Sinclair and Jean Duvall as NEDs and Professor Trevor
Jones as advisor to the Board.
The Company is fully funded to take our lead drug candidate to clinical trials
in H2 2023, and we are optimistic in the therapeutic potential of Midkine in
meeting a number of indications of unmet needs in major multi-billion dollar
markets. I would like to thank shareholders for their continued support
and I look forward to updating them as we progress through the year."
Enquiries:
Roquefort Therapeutics plc
Stephen West (Chairman) +44 (0)20 3290 9339
Buchanan (Public Relations)
Ben Romney / Jamie Hooper / George Beale +44 (0)20 7466 5000
Optiva Securities Limited (Broker)
Christian Dennis +44 (0)20 3411 1881
CHAIRMAN'S STATEMENT
I am pleased to report the audited financial statements to shareholders for
the period ended 31 December 2021. During the period the Company has made
substantial progress as a London-listed biotechnology company.
Most notably, in December 2021, Roquefort successfully completed a placing of
£3 million in order to fund the cash component of the acquisition of Lyramid
Pty Limited ("Lyramid"), its pre-clinical drug development programmes and
working capital. At the same time the Company completed the acquisition of
Lyramid's entire issued share capital, through a combination of £500,000 cash
(50%) and the issue of 5,000,000 new ordinary shares (50%). The acquisition
constituted as a Reverse Take-Over ("RTO") under the Listing Rules of the FCA
and accordingly the Company applied for re-admission of its shares to the
Official List and the Main Market of the London Stock Exchange, which
completed on 21 December 2021.
Acquisition of Lyramid
We were attracted to Lyramid as it is a clear market leader in Midkine
inhibiting RNA therapeutic drugs with the exclusive worldwide licence to
commercialise up to 37 patents related to Midkine-based therapies for the
treatment of cancer patients, autoimmune disorders, chronic kidney disease and
Covid-19. Lyramid operates in a market with significant growth potential as
this is a novel disease target - where there is therapeutic potential for
Midkine for a number of indications of unmet needs. The potential Midkine
blocking drug development market is enormous with the drug markets for cancer
estimated to be $75 billion, anti-inflammatory $98 billion, autoimmune $110
billon and Covid-19 $25.6 billion.
Our aim is to achieve value creation at an early stage as RNA based
therapeutic drugs offer a quicker and cheaper route to market versus the
monoclonal antibody approach to drug discovery. We believe the foundations are
in place to achieve value in the medium term with the Company fully funded to
drive our pre-clinical programmes forward and we expect to enter the clinic by
H2 2023. Our strategy remains to either partner with or sell our drugs to big
pharma.
Post Period End
The Company has made encouraging progress with its pre-clinical programme and
on 17 January 2022 completed the first stage screening of a novel series of
gene silencing reagents targeting Midkine, with the most promising lead drugs
selected. The lead compounds were synthesized in preparation for in vitro
experiments to test efficacy in altering cancer cell properties. This is a
first-in-class drug target with significant clinical potential and we believe
the targeted delivery of Midkine inhibiting RNA therapeutic drugs to tumours
represents a novel anti-cancer treatment strategy. After establishing efficacy
to inhibit Midkine in cancer, this opens up the significant possibility to
target Midkine for other indications such as Covid-19, anti-inflammatory and
autoimmune disorders.
Following the positive pre-clinical trials, the Company announced on 21 March
2022 that it had filed its first composition of matter provisional patent
application for a new class of RNA therapeutic drugs targeting Midkine. The in
vitro experiments generated very positive results demonstrating that the
Company's lead oligonucleotide drug candidates significantly reduce Midkine
levels seen in human cancer cells, in line with initial pre-test expectations.
In order to drive our preclinical programmes forward towards
commercialisation, the Company has strengthened the team with three
appointments from the pharmaceutical industry, each of whom add significant
relevant expertise in drug development, commercialising programmes and driving
pre-clinical and clinical programmes. As such, I'd like to again welcome
Professor Trevor Jones, as strategic and scientific advisor to the Board who
joined the Company on 14 February 2022, and Ms Jean Duvall and Dr Simon
Sinclair as Non-Executive Directors, who joined on 5 April and 20 April 2022,
respectively. All three appointments will help further the Company's ability
to capitalise on the significant growth potential that Midkine inhibiting RNA
therapeutics drugs offer.
Outlook
As we look to the future, we are optimistic in the therapeutic potential of
Midkine in meeting a number of indications of unmet needs in major
multi-billion dollar markets. In cancer in particular, we continue to believe
it is a first-in-class drug target with significant clinical potential and we
believe the targeted delivery of Midkine inhibiting RNA therapeutic drugs to
tumours represents a novel anti-cancer treatment strategy.
With licences held for the largest portfolio of patents on Midkine and a
limited competitive landscape, the Company is uniquely positioned to progress
this exciting area of development and achieve significant value. I would like
to thank shareholders for their continued support and I look forward to
updating them as we progress through the year.
Stephen West,
Executive Chairman
10 May 2022
DIRECTORS REPORT
The Directors present their report with the audited financial statements of
Roquefort Therapeutics plc ("the Company") and its subsidiary Lyramid Pty
Limited ("Lyramid"), together "the Group" for the period from the Company's
incorporation on 17 August 2020 to 31 December 2021. A commentary on the
business for the period is included in the Chairman's Statement on page 3. A
review of the business is also included in the Strategic Report on pages 12 to
22.
The Company's Ordinary Shares were admitted to listing on the London Stock
Exchange, on the Official List pursuant to Chapters 14 of the Listing Rules,
which sets out the requirements for Standard Listings.
Directors
The Directors of the Company during the year and their beneficial interest in
the Ordinary shares of the Company at 31 December 2021 were as follows:
Ordinary shares
Director Position Appointed Resigned Warrants
Stephen West(1) Executive Chairman 17/08/2020 - 4,400,000 7,500,000
Glenn Whiddon(2,3) Non-Executive Director 17/08/2020 20/10/2021 8,000,000 3,500,000
Mark Rollins Non-Executive Director 02/11/2020 04/04/2022 4,000,000 3,750,000
Dr Michael Stein Non-Executive Director 22/03/2021 - - 2,000,000
Mark Freeman Non-Executive Director 20/10/2021 - - 500,000
(1) 4,399,000 Ordinary shares and warrants held by Stephen West were held by
Cresthaven Investments Pty Ltd ATF The Bellini Trust; and 1,000 were held by
Stephen West direct.
(2) 2,500,000 shares held by MIMO Strategies Pty Ltd (ATF the Mimo Trust),
4,100,000 shares held by 6466 Investment Pty Ltd and 700,000 shares held by
Nautical Holdings WA Pty Ltd which are entities controlled by Jane Whiddon,
the spouse of Glenn Whiddon. 700,000 shares held by Getmeoutofhere Pty Ltd
which is an entity controlled by Glenn Whiddon.
(3) 2,500,000 warrants held by MIMO Strategies Pty Ltd (ATF the Mimo Trust),
300,000 warrants held by 6466 Investment Pty Ltd and 350,000 warrants held by
Nautical Holdings WA Pty Ltd which are entities controlled by Jane Whiddon,
the spouse of Glenn Whiddon. 350,000 warrants held by Getmeoutofhere Pty Ltd
which is an entity controlled by Glenn Whiddon.
Qualifying Third Party Indemnity Provision
At the date of this report, the Company has a third-party indemnity policy in
place for all Directors.
Substantial shareholders
As at 31 December 2021, the total number of issued Ordinary Shares with voting
rights in the Company was 71,900,000. Details of the Company's capital
structure and voting rights are set out in note 17 to the financial
statements.
The Company has been notified of the following interests of 3 per cent or more
in its issued share capital as at the date of approval of this report.
Number of Ordinary % of
Party Name Shares Share Capital
Jane Whiddon(1) 7,300,000 10.15%
Abdelatif Lachab 7,200,000 10.00%
Provelmare SA 5,000,000 6.90%
Stephen West(2) 4,550,000 6.33%
Mark Rollins 4,000,000 5.56%
Sebastian Marr 2,400,000 3.34%
(1) 2,500,000 shares held by MIMO Strategies Pty Ltd (ATF the MIMO Trust);
4,100,000 shares held by 6466 Investments Pty Ltd; 700,000 shares held by
Nautical Holdings WA Pty Ltd - all of which are entities controlled by J
Whiddon
(2) 4,399,000 shares held by Cresthaven Investments Pty Ltd (ATF the Bellini
Trust) - an entity associated with S West
Financial instruments
Details of the use of the Company's financial risk management objectives and
policies as well as exposure to financial risk are contained in the Accounting
policies and note 19 of the financial statements.
Greenhouse Gas (GHG) Emissions
The Company is aware that it needs to measure its operational carbon footprint
in order to limit and control its environmental impact. However, given the
very limited nature of its operations during the year under review, it has not
been practical to measure its carbon footprint.
In the future, the Company will only measure the impact of its direct
activities, as the full impact of the entire supply chain of its suppliers
cannot be measured practically.
Dividends
The Directors do not propose a dividend in respect of the period ended 31
December 2021.
Future developments and events subsequent to the year end
Further details of the Company's future developments and events subsequent to
the year-end are set out in the Strategic Report on pages 12 to 22.
Corporate Governance
The Governance report forms part of the Director's Report and is disclosed on
pages 23 to 26.
Going Concern
The Company's business activities, together with facts likely to affect its
future operations and financial and liquidity positions are set out in the
Chairman's Statement and also note 1 of the financial statements. In addition,
note 19 to the financial statements disclose the Company's financial risk
management policy.
The Directors, having made due and careful enquiry, are of the opinion that
the Company and the newly formed group have as a result of the successful RTO
and significant funds raised, adequate working capital to execute its
operations over the next 12 months. As a result, the Directors have adopted
the going concern basis of accounting in the preparation of the annual
financial statements.
Principal Activities
The Company's principal activity in the reporting period was to seek
investment opportunities in businesses focused on early-stage opportunities in
the medical biotechnology sector.
Auditors
The Board appointed Jeffreys Henry Audit Limited as auditors of the Company on
18 February 2022. They have expressed their willingness to continue in office
and a resolution to reappoint them will be proposed at the Annual General
Meeting.
Statement of Directors' responsibilities
The Directors are responsible for preparing the Annual Report alongside the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have prepared the financial
statements in accordance with UK adopted International Accounting Standards.
Under company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Company and of the profit or loss of the Company for that year.
The Directors are also required to prepare financial statements in accordance
with the rules of the London Stock Exchange for companies with a Standard
Listing.
In preparing these financial statements, the Directors are required to:
· Select suitable accounting policies and then apply them
consistently;
· Make judgments and accounting estimates that are reasonable and
prudent;
· State whether applicable UK adopted International Accounting
Standards have been followed, subject to any material departures disclosed and
explained in the financial statements; and
· Prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements and the Remuneration
Committee Report comply with the Companies Act 2006. They are also responsible
for safeguarding the assets of the Company and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities. They
are also responsible to make a statement that they consider that the annual
report and accounts, taken as a whole, is fair, balanced, and understandable
and provides the information necessary for the shareholders to assess the
Company's position and performance, business model and strategy.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of the financial statements may differ from legislation in other
jurisdictions.
Statement of Directors' responsibilities pursuant to Disclosure and
Transparency Rule
Each of the Directors, whose names and functions are listed on page 5 to 7
confirm that, to the best of their knowledge and belief:
· the financial statements prepared in accordance with UK adopted
International Accounting Standards, give a true and fair view of the assets,
liabilities, financial position and loss of the Company; and
· the Annual Report and financial statements, including the Strategic
Report, includes a fair review of the development and performance of the
business and the position of the Company, together with a description of the
principal risks and uncertainties that they face.
Disclosure of Information to Auditors
So far as the Directors are aware, there is no relevant audit information of
which the Company's auditors are unaware, and each Director has taken all the
steps that he ought to have taken as a Director in order to make himself aware
of any relevant audit information and to establish that the Company's auditors
are aware of that information.
This directors' report was approved by the Board of Directors on 10 May 2022
and is signed on its behalf by:
Stephen West,
Executive Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Period ended
31 December
2021
Note £
Revenue 7 719
Other income 130
Cost of goods (10,069)
Administrative expenses 8 (252,392)
Costs associated with the IPO (182,053)
Share based payments to directors and senior managers (248,326)
Costs associated with the acquisition of Lyramid (224,744)
Research and development expenditure (698)
Operating loss (917,433)
Finance income -
Loss before taxation (917,433)
Taxation 9 -
Loss for the period (917,433)
Foreign exchange loss -
Total comprehensive loss for the period attributable to equity holders of the (917,433)
parent
Loss per share (basic and diluted) attributable to the equity holders (pence) 10 (3.71)
The notes to the financial statements form an integral part of these financial
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2021
Note £ £
Assets
Non-current assets
Intangible assets 11 1,481,530
Current assets
Trade and other receivables 13 2,178,783
Cash and cash equivalents 14 899,721
Total current assets 3,078,504
Total assets 4,560,034
Equity and liabilities
Equity attributable to shareholders
Share capital 17 719,000
Share premium 17 3,910,595
Share based payments reserve 18 366,708
Retained deficit (914,321)
Currency translation reserve 624
Total equity 4,082,606
Liabilities
Non-current liabilities
Deferred tax liabilities 16 281,911
Current liabilities
Trade and other payables 15 195,517
Total liabilities 477,428
Total equity and liabilities 4,560,034
The notes to the financial statements form an integral part of these financial
statements.
This report was approved by the board and authorised for issue on 10 May 2022
and signed on its behalf by:
Stephen West
Executive Chairman
STATEMENT OF FINANCIAL POSITION FOR ROQUEFORT THERAPEUTICS PLC
As at 31 December 2021
Note £ £
Assets
Non-current assets
Investments 12 1,015,695
Intercompany receivables 132,800
Total non-current assets 1,148,495
Current assets
Trade and other receivables 13 2,136,224
Cash and cash equivalents 14 857,614
Total current assets 2,993,838
Total assets 4,142,333
Equity and liabilities
Equity attributable to shareholders
Share capital 17 719,000
Share premium 17 3,910,595
Share based payments reserve 18 366,708
Retained deficit (981,620)
Total equity 4,014,683
Liabilities
Current liabilities
Trade and other payables 15 127,650
Total liabilities 127,650
Total equity and liabilities 4,142,333
The notes to the financial statements form an integral part of these financial
statements.
This report was approved by the board and authorised for issue on 10 May 2022
and signed on its behalf by:
Stephen West
Executive Chairman
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Ordinary Share capital Share Premium Share Retained Translation Reserve Total equity
earnings
Based Payment Reserve
£ £ £ £ £ £
On Incorporation - - - 3,112 - 3,112
Profit/ (Loss) for the period - - - (917,433) 624 (916,809)
Total comprehensive profit / (loss) for the period - - - (914,321) 624 (913,697)
Transactions with owners
Ordinary Shares issued 719,000 4,070,000 - - - 4,789,000
Share issue costs - (159,405) - - - (159,405)
Warrants issued - - 366,708 - - 366,708
Total transactions with owners 719,000 3,910,595 366,708 (914,321) 624 4,082,606
As at 31 December 2021 719,000 3,910,595 366,708 (914,321) 624 4,082,606
Share capital comprises the ordinary issued share capital of the Company.
Share premium represents consideration less nominal value of issued shares and
costs directly attributable to the issue of new shares.
Share based payments represents the value of equity settled share-based
payments provided to employees, including key management personnel, and third
parties for services provided.
Retained deficit represents the cumulative retained losses of the Company at
the reporting date.
Translation reserve represents the exchange difference arising on the
consolidation of foreign subsidiaries. The notes to the financial statements
form an integral part of these financial statements.
STATEMENT OF CHANGES IN EQUITY FOR ROQUEFORT THERAPEUTICS PLC
Ordinary Share capital Share Premium Share Retained Total equity
earnings
£ £ Based Payment Reserves
£
£
£
On Incorporation - - - - -
Loss for the period - - - (981,620) (981,620)
Total comprehensive loss for the period - - - (981,620) (981,620)
Transactions with owners
Ordinary Shares issued 719,000 4,070,000 - - 4 789 000
Share issue costs - (159,405) - - (159,405)
Warrants issued - - 366,708 - 366,708
Total transactions with owners 719,000 3,910,595 366,708 (981,620) 4,014,683
As at 31 December 2021 719,000 3,910,595 366,708 (981,620) 4,014,683
The notes to the financial statements form an integral part of these financial
statements.
CONSOLIDATED STATEMENT OF CASH FLOW
Period ended
31 December
2021
Note £
Cash flow from operating activities
Loss before income tax (996,068)
Adjustments for:
Foreign Exchange 765
Non-cash adjustment (2,602)
Share based payment 18 366,708
Changes in working capital:
Increase in trade and other receivables (2,130,636)
Increase in trade and other payables 129,525
Decrease in Inventory 9,273
Net cash used in operating activities (2,623,035)
Cash flow from Investing activities
Acquisition of subsidiary, net of cash acquired (1,106,225)
Cash flows from financing activities
Proceeds from the issue of ordinary shares 17 4,789,000
Share issue costs 17 (159,405)
Net Cash used in financing activities 4,669,502
Net increase in cash and cash equivalents 900,335
Cash and cash equivalents at the beginning of the period -
Foreign exchange impact on cash (614)
Cash and cash equivalents at the end of the period 14 899,721
A net debt reconciliation has not been included as the Company had no debt
during the year.
The notes to the financial statements form an integral part of these financial
statements.
NOTES TO THE ACCOUNTS
1. General Information
Roquefort Therapeutics plc, the Group's ultimate parent company, was
incorporated on 17 August 2020 as a public company in England and Wales with
company number 12819145 under the Companies Act.
The address of its registered office is Eccleston Yards, 25 Eccleston Place,
London SW1W 9NF, United Kingdom.
The principal activity of the Company is to pursue opportunities to acquire
biotechnology businesses that are focused on early stage opportunities in the
medical biotechnology sector to include (but not limited to):
· Drug and vaccine development;
· Diagnostics;
· Immuno-therapy; and
· Cell and gene therapies.
The Company listed on the London Stock Exchange ("LSE") on 22 March 2021.
The consolidated financial statements of the Group have been prepared in
accordance with UK adopted International Accounting Standards as issued by the
UK Accounting Standards Board (ASB). They have been prepared under the
assumption that the Group operates on a going concern basis.
2. New Standards and Interpretations
No new standards, amendments or interpretations, effective for the first time
for the period beginning on or after 17 August 2020 have had a material impact
on the Group.
Standards, amendments and interpretations that are not yet effective and have
not been early adopted are as follows:
Standard Impact on initial application Effective date
IFRS 3 Reference to Conceptual Framework 1 January 2022
IAS 37 Onerous contracts 1 January 2022
IAS 16 Proceeds before intended use 1 January 2022
Annual improvements 2018-2020 Cycle 1 January 2023
IFRS 17 Insurance contracts 1 January 2023
IAS 8 Accounting estimates 1 January 2023
IAS 1 Classification of Liabilities as Current or Non-Current 1 January 2023
The Directors are evaluating the impact of the new and amended standards
above. The Directors believe that these new and amended standards are not
expected to have a material impact on the financial statements of the Group.
3. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these
financial statements are set out below. These policies have been consistently
applied to all the period presented, unless otherwise stated.
a) Basis of Preparation
The financial statements of Roquefort Therapeutics plc have been prepared in
accordance with UK adopted International Accounting Standards and the
Companies Act 2006.
The financial statements have been prepared on an accrual basis and under the
historical cost convention.
b) Going Concern
The preparation of the financial statements requires an assessment on the
validity of the going concern assumption.
The Directors, having made due and careful enquiry, are of the opinion that
the Company and the newly formed Group have, as a result of the successful
Reverse Takeover (RTO) and significant funds raised, adequate working capital
to execute its operations over the next 12 months. As a result, the Directors
have adopted the going concern basis of accounting in the preparation of the
annual financial statements.
Furthermore, the Directors acknowledge that COVID-19 has had, and will
continue to have, a significant adverse impact on the global economy. The
Directors do not believe that COVID-19's impact on the global economy gives
rise to a material uncertainty in respect of the Company's going concern
status due to the Company not being dependent on future financing being
obtained in the going concern period.
c) Basis of Consolidation
The Group's financial statements consolidate those of the parent company and
its subsidiary as of 31 December 2021. Its subsidiary has a reporting date of
31 December.
All transactions and balances between Group companies are eliminated on
consolidation, including unrealised gains and losses on transactions between
Group companies. Where unrealised losses on intra-group asset sales are
reversed on consolidation, the underlying asset is also tested for impairment
from a Group perspective. Amounts reported in the financial statements of its
subsidiary have been adjusted where necessary to ensure consistency with the
accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or
disposed of during the year are recognised from the effective date of
acquisition, or up to the effective date of disposal, as applicable.
The Group attributes total comprehensive income or loss of subsidiaries
between the owners of the parent and the non-controlling interests based on
their respective ownership interests.
d) Business combinations
The Group applies the acquisition method in accounting for business
combinations. The consideration transferred by the Group to obtain control of
a subsidiary is calculated as the sum of the acquisition-date fair values of
assets transferred, liabilities incurred and the equity interests issued by
the Group, which includes the fair value of any asset or liability arising
from a contingent consideration arrangement. Acquisition costs are expensed as
incurred.
Assets acquired and liabilities assumed are generally measured at their
acquisition-date fair values.
e) Foreign Currency Translation
i) Functional and Presentation Currency
The financial statements are presented in Pounds Sterling (GBP), which is the
Company's functional and presentation currency. IAS 21 The Effects of Changes
in Foreign Exchange Rates requires that assets and liabilities be translated
using the exchange rate at period end, and income, expenses and cash flow
items are translated using the rate that approximates the exchange rates at
the dates of the transactions (i.e. the average rate for the period). The
foreign exchange differences on translation is recognised in other
comprehensive income (loss).
ii) Transactions and Balances
Transactions denominated in a foreign currency are translated into the
functional currency at the exchange rate at the date of the transaction.
Assets and liabilities in foreign currencies are translated to the functional
currency at rates of exchange ruling at balance date. Gains or losses arising
from settlement of transactions and from translation at period-end exchange
rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the income statement for the period.
iii) Foreign operations
In the Group's financial statements, all assets, liabilities and transactions
of Group entities with a functional currency other than GBP are translated
into GBP upon consolidation. The functional currencies of entities within the
Group have remained unchanged during the reporting period.
On consolidation, assets and liabilities have been translated into GBP at the
closing rate of 0.5371 at the reporting date. Goodwill and fair value
adjustments arising on the acquisition of a foreign entity have been treated
as assets and liabilities of the foreign entity and translated into GBP at the
closing rate on the acquisition date of 0.5387.
Income and expenses have been translated into GBP at the average rate of
0.5461 over the reporting period. Exchange differences are charged or credited
to other comprehensive income and recognised in the currency translation
reserve in equity. On disposal of a foreign operation, the related cumulative
translation differences recognised in equity are reclassified to profit or
loss and are recognised as part of the gain or loss on disposal.
f) Segment Reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-makers. The chief operating
decision-makers, who are responsible for allocating resources and assessing
performance of the operating segments, has been identified as the executive
Board of Directors.
All operations and information are reviewed together so that at present there
is only one reportable operating segment.
In the opinion of the Directors, during the period the Group operated in the
single business segment of biotechnology.
g) Goodwill and Intangible assets
Goodwill represents the future economic benefits arising from a business
combination that are not individually identified and separately recognised.
Goodwill is carried at cost less accumulated impairment losses. Refer to Note
(h) for a description of impairment testing procedures.
Other intangible assets, including customer relationships, licences, patents
and trademarks, that are acquired by the Group and have finite useful lives
are measured at cost less accumulated amortisation and any accumulated
impairment losses. Refer to Note (h) for amortisation procedures.
h) Impairment testing of goodwill, other intangible assets and
property, plant and equipment
For impairment assessment purposes, assets are grouped at the lowest levels
for which there are largely independent cash inflows (cash-generating units).
As a result, some assets are tested individually for impairment and some are
tested at cash-generating unit level. Goodwill is allocated to those
cash-generating units that are expected to benefit from synergies of a related
business combination and represent the lowest level within the Group at which
management monitors goodwill.
Cash-generating units to which goodwill has been allocated (determined by the
Group's management as equivalent to its operating segments) are tested for
impairment at least annually. All other individual assets or cash-generating
units are tested for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset's (or
cash-generating unit's) carrying amount exceeds its recoverable amount, which
is the higher of fair value less costs of disposal and value-in-use. To
determine the value-in-use, management estimates expected future cash flows
from each cash-generating unit and determines a suitable discount rate in
order to calculate the present value of those cash flows. The data used for
impairment testing procedures are directly linked to the Group's latest
approved budget, adjusted as necessary to exclude the effects of future
reorganisations and asset enhancements. Discount factors are determined
individually for each cash-generating unit and reflect current market
assessments of the time value of money and asset-specific risk factors.
Impairment losses for cash-generating units reduce first the carrying amount
of any goodwill allocated to that cash-generating unit. Any remaining
impairment loss is charged pro rata to the other assets in the cash-generating
unit.
Amortisation is calculated to write off the cost of intangible assets less
their estimated residual values using the straight-line method over their
estimated useful lives, and is generally recognised in profit or loss.
Goodwill is not amortised.
The estimated useful lives for current and comparative periods are as follows:
· licences, patents and trademarks: 1-5 years
Amortisation methods, useful lives and residual values are reviewed at each
reporting date and adjusted if appropriate.
i) Financial Instruments
IFRS 9 requires an entity to address the classification, measurement and
recognition of financial assets and liabilities.
i) Classification
The Company classifies its financial assets in the following measurement
categories:
· those to be measured at amortised cost.
The classification depends on the Company's business model for managing the
financial assets and the contractual terms of the cash flows.
The Company classifies financial assets as at amortised cost only if both of
the following criteria are met:
· the asset is held within a business model whose objective is to
collect contractual cash flows; and
· the contractual terms give rise to cash flows that are solely
payment of principal and interest.
ii) Recognition
Purchases and sales of financial assets are recognised on trade date (that is,
the date on which the Company commits to purchase or sell the asset).
Financial assets are derecognised when the rights to receive cash flows from
the financial assets have expired or have been transferred and the Company has
transferred substantially all the risks and rewards of ownership.
iii) Measurement
At initial recognition, the Company measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value through profit
or loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset.
Transaction costs of financial assets carried at FVPL are expensed in profit
or loss.
Debt instruments
Amortised cost: Assets that are held for collection of contractual cash flows,
where those cash flows represent solely payments of principal and interest,
are measured at amortised cost. Interest income from these financial assets is
included in finance income using the effective interest rate method. Any gain
or loss arising on derecognition is recognised directly in profit or loss and
presented in other gains/(losses) together with foreign exchange gains and
losses. Impairment losses are presented as a separate line item in the
statement of profit or loss.
iv) Impairment
The Company assesses, on a forward looking basis, the expected credit losses
associated with any debt instruments carried at amortised cost. The impairment
methodology applied depends on whether there has been a significant increase
in credit risk. For trade receivables, the Company applies the simplified
approach permitted by IFRS 9, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
j) Financial Liabilities
The Group's financial liabilities include borrowings, trade and other payables
and derivative financial instruments.
Financial liabilities are initially measured at fair value, and, where
applicable, adjusted for transaction costs unless the Group designated a
financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the
effective interest method except for derivatives and financial liabilities
designated at FVTPL, which are carried subsequently at fair value with gains
or losses recognised in profit or loss (other than derivative financial
instruments that are designated and effective as hedging instruments).
All interest-related charges and, if applicable, changes in an instrument's
fair value that are reported in profit or loss are included within finance
costs or finance income.
k) Inventories
Inventories are measured at the lower of cost and net realisable value. The
cost of manufactured products includes direct materials and direct labour with
any variable and fixed overheads expensed is a period cost. Costs of purchased
inventory are determined after deducting rebates and realisable value as the
estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated cost necessary to make the sale.
l) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs
incurred. Borrowings are subsequently measured at amortised cost. Any
difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using
the effective interest method. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan to the extent that
it is probable that some or all of the facility will be drawn down. In this
case, the fee is deferred until the draw down occurs.
Borrowings are removed from the balance sheet when the obligation specified in
the contract is discharged, cancelled or expired. The difference between the
carrying amount of a financial liability that has been extinguished or
transferred to another party and the consideration paid, including any non
cash assets transferred or liabilities assumed, is recognised in profit or
loss as other income or finance costs.
Where the terms of a financial liability are renegotiated and the entity
issues equity instruments to a creditor to extinguish all or part of the
liability, a gain or loss is recognised in profit or loss, which is measured
as the difference between the carrying amount of the financial liability and
the fair value of the equity instruments issued.
Borrowings are classified as current liabilities unless the entity has an
unconditional right to defer settlement of the liability for at least 12
months after the reporting period.
m) Taxation
Taxation comprises current and deferred tax.
Current tax is based on taxable profit or loss for the period. Taxable profit
or loss differs from profit or loss as reported in the income statement
because it excludes items of income and expense that are taxable or deductible
in other years and it further excludes items that are never taxable or
deductible. The asset or liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the balance sheet
date.
Deferred tax is recognised on differences between the carrying amounts of
assets and liabilities in the financial information and the corresponding tax
bases used in the computation of taxable profit and is accounted for using the
balance sheet liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary difference arises
from initial recognition of goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Company is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled, or the asset realised. Deferred tax is
charged or credited to profit or loss, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and
liabilities on a net basis.
n) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and demand
deposits with banks and other financial institutions, that are readily
convertible into known amounts of cash, and which are subject to an
insignificant risk of changes in value.
o) Equity, reserves and dividend payments
Share capital represents the nominal (par) value of shares that have been
issued.
Share premium includes any premiums received on issue of share capital. Any
transaction costs associated with the issuing of shares are deducted from
share premium, net of any related income tax benefits.
Translation reserve comprises foreign currency translation differences arising
from the translation of financial statements of the Group's foreign entities
into GBP.
Retained losses includes all current period results as disclosed in the income
statement and share-based employee remuneration.
All transactions with owners of the parent are recorded separately within
equity.
No dividends are proposed for the period.
p) Earnings per Ordinary Share
The Company presents basic and diluted earnings per share data for its
Ordinary Shares.
Basic earnings per Ordinary Share is calculated by dividing the profit or loss
attributable to Shareholders by the weighted average number of Ordinary Shares
outstanding during the period.
Diluted earnings per Ordinary Share is calculated by adjusting the earnings
and number of Ordinary Shares for the effects of dilutive potential Ordinary
Shares.
q) Employee benefits
For the period the Group's only employees due benefits were within its
subsidiary, Lyramid.
Provision is made for Lyramid's liability for employee benefits arising from
services rendered by employees up to the end of the reporting period. In
determining the liability, consideration is given to employee wage increases
and the probability that the employee may satisfy vesting requirements.
Short term obligations
Liability for wages and salaries, including non-monetary benefits, annual
leave, long service leave and accumulating sick leave expected to be settled
within 12 months of the reporting date are recognised in other payables in
respect of employees' services up to the reporting date and are measured at
the amounts expected to be paid when the liabilities are settled.
Other long-term employee benefit obligations
Liability for annual leave and long service leave not expected to be settled
within 12 months from the reporting date is recognised in the provision for
employee benefits and measured as the present value of expected future
payments to be made in respect of services provided by employees up to the
reporting date, using the projected unit credit method. Consideration is given
to expected future wage and salary levels, of employee departures and period
of service.
Retirement benefit obligations
Contributions for retirement benefit obligations are recognised as an expense
as they become payable. Prepaid contributions are recognised as an asset to
the extent that a cash refund or a reduction in the future payment is
available. Contributions are paid into the fund nominated by the employee.
Employee benefits provision
The liability for employee benefits expected to be settled more than 12 months
from the reporting date are recognised and measured at the present value of
the estimated future cash flows to be made in respect of all employees at the
reporting date. In determining the present value of the liability, estimates
of attrition rates and pay increases through promotion and inflation have been
taken into account.
r) Share-based payments
The Company has applied the requirements of IFRS 2 Share-based payments.
The Company issues equity settled share based payments to the directors and to
third parties for the provision of services provided for assistance in raising
private equity. Equity settled share based payments are measured at fair value
at the date of grant, or the date of the service provided. The fair value
determined at the grant date or service date of the equity settled share based
payment is recognised as an expense, or recognised against share premium where
the service received relates assistance in raising equity, with a
corresponding credit to the share base payment reserve. The fair value
determined at the grant date of equity settled share based payment is expensed
on a straight line basis over the life of the vesting period, based on the
company's estimate of shares that will eventually vest. Once an option or
warrant vests, no further adjustment is made to the aggregate expensed.
The fair value is measured by use of the Black Scholes model as the Directors
view this as providing the most reliable measure of valuation. The expected
life used in the model has been adjusted, based on management's best
estimates, for the effects of non-transferability, exercise restrictions and
behavioural considerations. The market price used in the model is the quoted
LSE closing price immediately preceding the calculation date. The fair value
calculated is inherently subjective and uncertain due to the assumptions made
and the limitation of the calculation used.
s) Financial Risk Management Objectives and Policies
The Company does not enter into any forward exchange rate contracts.
The main financial risks arising from the Company's activities are market
risk, interest rate risk, foreign exchange risk, credit risk, liquidity risk
and capital risk management. Further details on the risk disclosures can be
found in Note 19.
t) Significant accounting judgements, estimates and
assumptions
The preparation of the financial statements in conformity with International
Financial Reporting Standards requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the
process of applying the Company's accounting policies.
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. The
Directors consider the significant accounting judgements, estimates and
assumptions used within the financial statements to be:
Impairment of non-financial assets and goodwill
In assessing impairment, management estimates the recoverable amount of each
asset or cash-generating unit based on expected future cash flows and uses an
interest rate to discount them. Estimation uncertainty relates to assumptions
about future operating results and the determination of a suitable discount
rate. In the period the Directors consider the significant accounting
judgements, estimates and assumptions used within the financial statements to
be:
Business combinations
Management uses valuation techniques when determining the fair values of
certain assets and liabilities acquired in a business combination (see Note
(d)). In particular, the fair value of contingent consideration is dependent
on the outcome of many variables including the acquirees' future profitability
(see Note 4).
Share Based Payments
In the period to 31 December 2021 35,875,000 warrants were granted. When
accounting for the share based payment expense in respect of those warrants
granted, Management must calculate the fair value of the share warrants
issued. Management have done so using the Black Scholes model, however, a
number of the inputs in this model are subjective and thus management must
make estimates.
4. Acquisition of Lyramid Pty Limited
On 21 December 2021, Roquefort Therapeutics made its first acquisition. It
acquired 100% of the equity instruments of Lyramid Pty Limited, an Australian
based business, thereby obtaining control. The acquisition was made in line
with the Company's stated strategic objective to pursue investments in the
global biotechnology sector.
The details of the business combination as follows:
Fair value of consideration transferred £
Amount settles in cash 1,148,495
Loans assigned at acquisition (132,800)
Fair value of contingent consideration -
Total 1,015,695
Recognised amounts of identifiable net assets at book values
Inventories 9,273
Trade and other receivables 42,674
Cash and cash equivalents 42,270
Total current assets 94,217
Borrowings 212,065
Deferred tax liabilities 281,911
Total non-current liabilities 493,976
Provisions
Other liabilities 28,195
Trade and other payables 37,881
Total current liabilities 66,076
Identifiable net liabilities 465,835
Intangible asset at fair value 1,481,530
Consideration transferred settled in cash 648,496
Cash and cash equivalents acquired 42,270
Net cash outflow on acquisition 606,226
Acquisition costs charged to expenses 224,744
Consideration transferred
The acquisition of Lyramid was settled for a consideration of £1,148,495;
£648,495 being payable in cash and £500,000 payable in shares. On
acquisition, loans of £132,800 were assigned from the previous owner.
The purchase agreement included an additional contingent deferred
consideration to the Seller to be satisfied in the form of Ordinary Shares as
follows:
(a) if prior to fifth anniversary of Admission (on 21 December 2021),
the Company's market capitalisation exceeds £25,000,000 for a period of 5 or
more consecutive trading days the Company shall issue to the Seller (or its
nominee) 5,000,000 Ordinary Shares; and
(b) if prior to fifth anniversary of Admission (on 21 December 2021) the
Company's market capitalisation exceeds £50,000,000 for a period of 5 or more
consecutive trading days the Company shall issue to the Seller (or its
nominee) a further 5,000,000 Ordinary Shares.
Acquisition-related costs amounting to £224,744 are not included as part of
consideration transferred and have been recognised as an expense in the
consolidated statement of profit or loss, as part of other expenses.
Identifiable net assets
The fair value of the trade and other receivables acquired as part of the
business combination amounted to £42,674. As of the acquisition date, the
Group's best estimate of the contractual cash flow not expected to be
collected amounted to zero.
Lyramid's contribution to the Group results
Lyramid incurred a loss of £14,449, for the eleven days from 21 December 2021
to the reporting date. Revenue for this period was £719.
If Lyramid had been acquired on 17 August 2020, revenue of the Group for the
period would have been £23,857, and loss for the period would have increased
by £193,881.
5. Investments in subsidiaries
The parent company has investments in the following subsidiary undertakings
which are unlisted:
Name Country of incorporation Holding Proportion of voting rights Principal activity
Lyramid Pty Limited Australia Ordinary shares 100% Biotechnology research company
6. Directors' and Employees' Remuneration
Directors' Remuneration
Period ended
31 December
2021
£
Fee's to non-executive directors 47,301
Bonus 10,000
Share based payment charge 178,053
235,354
Further information about the remuneration of individual directors are
provided in the Directors' Remuneration Report.
Remuneration of Key Management Personnel
Period ended
31 December
2021
£
Salaries and short-term employee benefits 1,899
Long term benefits 221
Post-employment benefits 186
Share based payment charge 62,464
64,770
Average number of employees during the year (including Directors full time
equivalent)
Period ended
31 December
2021
Continuing operations 1
Stephen West is the sole employee of the Company, and the Company has had no
other employees in the period. Lyramid's sole employee is Graham Robertson.
7. Revenue
Revenue in the period was £719 and was in the Group's only business segment
of biotechnology.
8. Operating Loss
The following items have been charged/(credited) to the income statement in
arriving at the Group's operating loss from continuing operations:
Period ended
31 December
2021
£
Other operating costs
Costs associated with the IPO 182,053
Directors' and employee costs 59,607
Share based payments to directors and senior management 248,326
Costs associated with the acquisition of Lyramid 224,744
Legal fees 31,165
Consulting and professional fees 125,807
Other expenditure 35,818
907,515
During the year the Group obtained the following services from its auditor:
Period ended
31 December
2021
£
Audit Services
Statutory audit - Group and Company 22,000
22,000
9. Taxation
Period ended
31 December
2021
£
Current tax -
Deferred tax -
Income tax expense -
Income tax can be reconciled to the loss in the statement of comprehensive
income as follows:
Period ended
31 December
2021
£
Loss before taxation (917,433)
Tax at the UK Corporation of 19% 174,312
Effect of overseas tax 867
Expenditure disallowable for taxation -
Tax losses on which no deferred tax assets has been recognised (175,179)
Total tax (charge)/credit -
UK -
Overseas -
Total tax (charge)/credit -
The Group has accumulated tax losses of approximately £917,000 that are
available, under current legislation, to be carried forward indefinitely
against future profits.
A deferred tax asset has not been recognised in respect of these losses due to
the uncertainty of future profits. The amount of the deferred tax asset not
recognised is approximately £175,000.
On 11 March 2020 it was announced (and substantively enacted on 17 March 2020)
that the UK corporation tax rate would remain at 19% and not reduce to 17%
(the previously enacted rate) from 1 April 2020. On 3 March 2021, the
Chancellor announced that the corporation tax rate will be increasing to 25%
from 1 April 2023.
10. Earnings per share
Period ended
31 December
2021
£
Loss attributable to equity shareholders (917,433)
Weighted average number of ordinary shares 24,701,793
Loss per share in pence
Basic (3.71)
Diluted (3.71)
There is no difference between the basic and diluted earnings per share as the
effect would be to decrease earnings per share.
As at the end of the financial period there were 34,375,000 warrants in issue,
which could potentially have an anti-dilutive impact depending on the results
of the Company.
11. Intangible Assets
Period ended
31 December
2021
£
Cost
At 17 August 2020 -
Goodwill 281,911
Licences 1,199,619
At 31 December 2021 1,481,530
Amortisation
At 17 August 2021 -
Impairment Charge -
At 31 December 2021 -
Carrying value
At 17 August 2020 -
At 31 December 2021 1,481,530
The Directors have concluded that there has been no material impairment of the
goodwill associated with the acquisition of Lyramid Pty Limited at 31 December
2021. The Goodwill represents the deferred tax value of the licence agreement
and patents held by Lyramid.
12. Investments
The Group had no investments at 31 December 2021, or 17 August 2020.
Company Shares in subsidiary undertakings
£
Cost at 17 August 2020 -
Additions 1,015,695
Cost at 31 December 2021 1,015,695
Impairment
At 17 August 2021 -
Charge for period -
At 31 December 2021 -
Net book value at 17 August 2020 -
Net book value at 31 December 2021 1,015,695
In the period the Company acquired 100% of the issued shares of Lyramid Pty
Limited. The net book value of shares in subsidiary undertakings is subject to
commercial and management review, as well as review for indicators of
impairment at least once a year. This is to confirm the carrying amount of the
investment in the financial statements does not exceed the estimated
recoverable amount of the investment. When this is no longer the case, the
costs are written off through the statement of profit or loss and other
comprehensive income. The Directors have concluded that there has been no
material impairment to the investment in Lyramid Pty Limited at 31 December
2021.
13. Trade and other receivables
Group Company
31 December 31 December
2021 2021
£ £
Trade receivables 17,825 -
Other receivables 2,135,031 2,130,875
Prepayments and accrued income 25,927 5,349
2,178,783 2,136,224
There are no material differences between the fair value of trade and other
receivables and their carrying value at the year end.
The other receivables balance primarily relates to shares issued in December
2021 as part of the RTO to acquire Lyramid. These monies were collected in
full in January 2022.
No receivables were past due or impaired at the year end.
14. Cash and cash equivalents
Group Company
31 December 31 December
2021 2021
£ £
Cash at bank and in hand 899,271 857,614
The Directors consider the carrying amount of cash and cash equivalents
approximates to their fair value.
15. Trade and other payables
Group Company
31 December 31 December
2021 2021
£ £
Trade creditors 40,718 962
Accruals and other creditors 154,799 126,688
195,517 127,650
16. Deferred tax assets and liabilities
Group Company
Period ended Period ended
31 December 31 December
2021 2021
£ £
At 17 August 2020 - -
Recognised in business combination 281,911 -
At 31 December 2021 281,911 -
See note 4 - Acquisition of Lyramid Pty Limited.
17. Share capital
Group and Company Ordinary Share Share Premium Total
Shares
Capital
£ £
No. £
Issue of ordinary shares on incorporation(1) 5,000,000 50,000 - 50,000
Issue of ordinary shares(2) 7,400,000 74,000 - 74,000
Issue of ordinary shares(3) 20,000,000 200,000 800,000 1,000,000
Exercise of broker warrants(4) 1,500,000 15,000 - 15,000
Issue of ordinary shares(5) 3,000,000 30,000 120,000 150,000
Issue of ordinary shares(6) 30,000,000 300,000 2,700,000 3,000,000
Issue of ordinary shares(7) 5,000,000 50,000 450,000 500,000
Share issue costs - - (159,405) (159,405)
At 31 December 2021 71,900,000 719,000 3,910,595 4,629,595
(1) On incorporation on 17 August 2020, the Company issued 5,000,000 ordinary
shares of £0.01 at their nominal value of £0.01.
(2) On 20 November 2020, the Company issued 7,400,000 ordinary shares at their
nominal value of £0.01.
(3) On admission to the Standard List of the LSE on 22 March 2021, 20,000,000
shares were issued at a placing price of £0.05.
(4) On 19 April 2021 1,500,000 brokers warrants were exercised at the exercise
price if £0.01 resulting in the issue of 1,500,000 ordinary shares.
(5) On 18 August 2021, the Company issued 3,000,000 ordinary shares of £0.01
at an issue price of £0.05.
(6) On 21 December 2021, the Company issued 30,000,000 ordinary shares of
£0.01 at an issue price of £0.10.
(7) On 21 December 2021, the Company issued 5,000,000 ordinary shares of
£0.01 at an issue price of £0.10.
18. Share Based Payment Reserves
Total
£
Directors warrants issued(1) 6,833
Broker seed warrants issued(2) 60,002
Broker placing warrants issued(3) 8,076
Completion warrants issued(4) 100,947
Senior management warrants issued(5) 140,544
Optiva warrants issued(6) 44,417
Orana warrants issued(7) 5,889
At 31 December 2021 366,708
(1) On admission to LSE on 22 March 2021 750,000 directors' warrants were
issued that entitle the warrant holder to subscribe for one Ordinary Share at
£0.05 per ordinary share and a further 750,000 directors warrants were issued
that entitle the warrant holder to subscribe for one ordinary share at £0.10
per ordinary share.
(2) On admission to LSE on 22 March 2021 1,500,000 brokers warrants were
issued that entitle the warrant holder to subscribe for one Ordinary Share at
£0.01 per ordinary share.
(3) On admission to LSE on 22 March 2021, 480,000 Broker Placing Warrants were
issued that entitle the warrant holder to subscribe for one ordinary share at
the placing price of £0.05 per ordinary share.
(4) On readmission to LSE on 21 December 2021, 3,000,000 Completion Warrants
were issued that entitle, Stephen West (the warrant holder) to subscribe for
one ordinary share at £0.10 per ordinary share.
(5) On readmission to LSE on 21 December 2021, 4,500,000 Senior Management
Warrants were issued that entitle the warrant holder to subscribe for one
ordinary share at £0.15 per ordinary share.
(6) On readmission to LSE on 21 December 2021, 1,320,000 Optiva Warrants were
issued that entitle the warrant holder to subscribe for one ordinary share at
£0.10 per ordinary share.
(7) On readmission to LSE on 21 December 2021, 175,000 Orana Warrants were
issued that entitle the warrant holder to subscribe for one ordinary share at
£0.10 per ordinary share.
The fair value of the services received in return for the warrants granted are
measured by reference to the fair value of the warrants granted. The estimate
of the fair value of the warrants granted is measured based on the
Black-Scholes valuations model. Measurement inputs and assumptions are as
follows:
Warrant Number of Share Exercise Price Expected Expected Risk free Expected dividends
warrants
Price
volatility
life rate
Director 750,000 £0.05 £0.05 50.00% 5 15.00% 0.00%
Director 750,000 £0.05 £0.10 50.00% 5 15.00% 0.00%
Broker 1,500,000 £0.05 £0.01 50.00% 0.08 15.00% 0.00%
Broker Placing 480,000 £0.05 £0.05 50.00% 3 15.00% 0.00%
Completion 3,000,000 £0.10 £0.10 50.00% 3 15.00% 0.00%
Senior Management 4,500,000 £0.10 £0.15 50.00% 5 15.00% 0.00%
Optiva 1,320,000 £0.10 £0.10 50.00% 3 15.00% 0.00%
Orana 175,000 £0.10 £0.10 50.00% 3 15.00% 0.00%
Warrants Number of Warrants Exercise Price Expiry date
On incorporation - - -
Issued on 25 November 2020(1) 5,000,000 £0.10 22 March 2026
Issued on 25 November 2020(1) 7,000,000 £0.10 22 March 2026
Issued on 17 March 2021 1,500,000 £0.01 20 April 2021
Issued on 17 March 2021 480,000 £0.05 22 March 2024
Issued on 17 March 2021(1) 750,000 £0.05 22 March 2026
Issued on 17 March 2021(1) 750,000 £0.10 22 March 2026
Issued on 17 March 2021 10,000,000 £0.10 21 March 2023
Exercised on 19 April 2021 (1,500,000) £0.01 20 April 2021
Issued on 18 August 2021 1,500,000 £0.10 22 March 2023
Issued on 13 October 2021 3,000,000 £0.10 21 December 2024
Issued on 13 October 2021 4,500,000 £0.15 21 December 2026
Issued on 13 October 2021 1,320,000 £0.10 21 December 2024
Issued on 13 October 2021 175,000 £0.10 21 December 2024
At 31 December 2021 34,375,000 £0.105
(1)The warrants vest on 21 March 2022, being 12 months from date of admission.
The weighted average time to expiry of the warrants as at 31 December 2021 is
3.05 years.
19. Financial Instruments and Risk Management
Capital Risk Management
The Group manages its capital to ensure that it will be able to continue as a
going concern while maximising the return
to stakeholders. The overall strategy of the Group is to minimise costs and
liquidity risk.
The capital structure of the Group consists of equity attributable to equity
holders of the Group, comprising issued share capital, reserves and retained
earnings as disclosed in the Statement of Changes of Equity.
The Group is exposed to a number of risks through its normal operations, the
most significant of which are interest, credit, foreign exchange, commodity
and liquidity risks. The management of these risks is vested to the Board of
Directors.
The sensitivity has been prepared assuming the liability outstanding was
outstanding for the whole period. In all cases presented, a negative number in
profit and loss represents an increase in finance expense / decrease in
interest income.
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group's receivables from
customers. Indicators that there is no reasonable expectation of recovery
include, amongst others, failure to make contractual payments for a period of
greater than 120 days past due.
The carrying amount of financial assets represents the maximum credit
exposure.
The principal financial assets of the Group are bank balances. The Group
deposits surplus liquid funds with counterparty banks that have high credit
ratings and the Directors consider the credit risk to be minimal.
The Group's maximum exposure to credit by class of individual financial
instrument is shown in the table below:
Carrying Maximum
value at Exposure at
31 December 31 December
2021 2021
£ £
Trade receivables 17,825 17,825
Other receivables 2,160,958 2,160,958
Cash and cash equivalents 899,721 899,721
3,078,504 3,078,504
Currency Risk
The Group operates in a global market with income and costs possibly arising
in a number of currencies and is exposed to foreign currency risk arising from
commercial transactions, translation of assets and liabilities and net
investment in foreign subsidiaries. Exposure to commercial transactions arise
from sales or purchases by operating companies in currencies other than the
Group's functional currency. Currency exposures are reviewed regularly.
The Group has a limited level of exposure to foreign exchange risk through
their foreign currency denominated cash balances and a portion of the Group's
costs being incurred in Australian Dollars. Accordingly, movements in the
Sterling exchange rate against these currencies could have a detrimental
effect on the Group's results and financial condition.
Currency risk is managed by maintaining some cash deposits in currencies other
than Sterling. The table below shows the currency profiles of cash and cash
equivalents:
Cash and cash equivalents At
31 December
2021
£
Sterling 857,614
Australian Dollars 42,107
899,721
Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
the obligations associated with its financial liabilities that are settled by
delivering cash or another financial asset. The Group's approach to managing
liquidity is to ensure, as far as possible, that it will have sufficient
liquidity to meet its liabilities when they are due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage
to the Group's reputation.
The Group seeks to manage liquidity risk by regularly reviewing cash flow
budgets and forecasts to ensure that sufficient liquidity is available to meet
foreseeable needs and to invest cash assets safely and profitably. The Group
deems there is sufficient liquidity for the foreseeable future.
The Group had cash and cash equivalents at period end as below:
At
31 December
2021
£
Cash and cash equivalents 899,721
899,721
Interest Rate Risk
The Group is exposed to interest rate risk whereby the risk can be a reduction
of interest received on cash surpluses held and an increase in interest on
borrowings the Group may have. The maximum exposure to interest rate risk at
the reporting date by class of financial asset was:
At
31 December
2021
£
Bank balances 899,721
899,721
Given the extremely low interest rate environment on bank balances, any
probable movement in interest rates would have an immaterial effect.
20. Financial assets and financial liabilities
Group Financial Assets at amortised cost Financial Liabilities at amortised cost Total
£ £ £
31 December 2021
Financial assets/liabilities
Trade and other receivables 2,178,783 - 2,178,783
Cash and cash equivalents 899,721 - 899,721
Trade and other payables - (195,517) (195,517)
3,078,504 (195,517) 2,882,987
Company Financial Assets at amortised cost Financial Liabilities at amortised cost Total
£ £ £
31 December 2021
Financial assets/liabilities
Trade and other receivables 2,136,224 - 2,136,224
Cash and cash equivalents 857,614 - 857,614
Trade and other payables - (127,650) (127,650)
2,993,838 (127,650) 2,866,188
21. Capital Commitments
There were no capital commitments at 31 December 2021.
22. Contingent Liabilities
There were no contingent liabilities at 31 December 2021.
23. Operating lease commitments
There were no operating lease commitments at 31 December 2021.
24. Related party transactions
On incorporation, the Company issued 2,500,000 Ordinary Shares of £0.01 at
£0.01 per Ordinary Share for cash consideration of £25,000 to Stephen West,
a Director and 2,500,000 Ordinary Shares of £0.01 at £0.01 per Ordinary
Share for cash consideration of £25,000 to Glenn Whiddon, a Director.
On 20 November 2020, the Company issued 500,000 Ordinary Shares of £0.01 at
£0.01 per Ordinary Share for cash consideration of £5,000 to Cresthaven
Investments Pty Ltd ATF The Bellini Trust (an entity associated with Stephen
West, a Director); 3,500,000 Ordinary Shares of £0.01 at £0.01 per Ordinary
Share for cash consideration of £35,000 to 6466 Investments Pty Ltd (an
entity associated with Glenn Whiddon, a Director); 3,000,000 Ordinary Shares
of £0.01 at £0.01 per Ordinary Share for cash consideration of £30,000 to
Mark Rollins, a Director; and 400,000 Ordinary Shares of £0.01 at £0.01 per
Ordinary Share for cash consideration of £4,000 to Orana Corporate LLP, an
entity which has a service agreement with the Company for the provision of
accounting and company secretarial services. All of these shares are paid up.
On admission to the Standard List of the LSE on 22 March 2021, the Company
issued 700,000 Ordinary Shares of £0.01 at £0.10 per Ordinary Share for cash
consideration of £70,000 to Nautical Holdings Pty Limited (an entity
associated with Glenn Whiddon, a Director); 600,000 Ordinary Shares of £0.01
at £0.10 per Ordinary Share for cash consideration of £60,000 to 6466
Investments Pty Limited (an entity associated with Glenn Whiddon, a Director);
700,000 Ordinary Shares of £0.01 at £0.10 per Ordinary Share for cash
consideration of £70,000 to Getmeoutofhere Pty Limited (an entity associated
with Glenn Whiddon, a Director); 1,000,000 Ordinary Shares of £0.01 at £0.10
per Ordinary Share for cash consideration of £100,000 to Cresthaven
Investments Pty Ltd ATF The Bellini Trust (an entity associated with Stephen
West, a Director); and 1,000,000 Ordinary Shares of £0.01 at £0.10 per
Ordinary Share for cash consideration of £100,000 to Mark Rollins a Director;
On 21 December 2021, the Company issued 399,000 Ordinary Shares of £0.01 at
£0.10 per Ordinary Share for cash consideration of £39,900 to Cresthaven
Investments Pty Ltd ATF The Bellini Trust (an entity associated with Stephen
West, a Director) and 1,000 Ordinary Shares of £0.01 at £0.10 per Ordinary
Share for cash consideration of £100 to Stephen West, a Director.
Orana Corporate LLP has a service agreement with the Company for the provision
of accounting and company secretarial services. In the period Orana Corporate
LLP received £6,930 for these services from the Company. A further £24,000
was received for advisory work in connection with the Company's initial
listing on the LSE. A further £30,000 was received for the Placing and
subsequent relisting of the Company.
In the period the Company made a loan of £80,000 to its subsidiary Lyramid.
This loan has been impaired and a provision has been made against it at the
year end.
25. Post reporting date events
No adjusting or significant non-adjusting events have occurred between the 31
December reporting date and the date of authorisation.
26. Ultimate controlling party
As at 31 December 2021, there was no ultimate controlling party of the
Company.
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. END FR BXGDULXBDGDGRecent news on Roquefort Therapeutics
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