REG - Solvonis Therapeutic - Final Results for the year ended 31 December 2024
16/04/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250416:nRSP1813Fa&default-theme=true
RNS Number : 1813F Solvonis Therapeutics PLC 16 April 2025
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
EU REGULATION 596/2014 AS IT FORMS PART OF DOMESTIC LAW IN THE UNITED KINGDOM
BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. UPON THE PUBLICATION OF
THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE
INFORMATION WILL BE CONSIDERED TO BE IN THE PUBLIC DOMAIN.
16 April 2025
Solvonis Therapeutics plc
("Solvonis" or the "Company")
Final Results for the year ended 31 December 2024
I am pleased to present the annual financial report and financial statements
for Solvonis Therapeutics Plc (the "Company" or "Solvonis") formerly Graft
Polymer (UK) Plc, for the year ended 31 December 2024.
This past year has been a transformative year for our company-one defined by
strategic reorientation, decisive leadership changes, and a sharpened focus on
becoming a leading player in the mental health therapeutics space.
The most visible reflection of this transformation is our rebranding to
Solvonis Therapeutics plc, which received shareholder approval in January
2025. This name change signals our evolution from a polymer-focused business
into a purpose-driven biotech company targeting urgent, unmet needs in mental
health and addiction treatment.
During the year, we made the strategic decision to divest our non-core assets,
notably the sale of our Slovenian polymer facility. This allowed us to realign
resources toward high-impact therapeutic R&D and forge commercial and
clinical partnerships that lay the groundwork for long-term value creation.
One of the most defining moments of the year was our agreement to acquire
Awakn Life Sciences Corp., a clinical-stage biotechnology company specialising
in therapies for addiction and mental health disorders. We believe this
acquisition, expected to complete in 2025, positions Solvonis at the forefront
of innovation in this critical field.
On governance, we welcomed Anthony Tennyson as our new CEO in May. Anthony
brings deep sectoral expertise and a compelling strategic vision that has
already begun to take shape in our repositioning and execution priorities.
We are proud of the resilience, agility, and dedication shown by our teams
throughout this period of change. The Board extends its gratitude to all our
employees, partners, and shareholders who have supported this journey. As we
move into 2025, we are more focused than ever on building a therapeutics
company capable of making a tangible difference in the lives of patients.
Dennis Purcell
Non-Executive Chairman
Principal Risks and Uncertainties
The Group operates in an uncertain environment and is subject to a number of
risk factors. The Directors consider the following risk factors are of
particular relevance to the Group's activities although it should be noted
that this list is not exhaustive and that other risk factors not presently
known or currently deemed immaterial may apply.
Risks associated with the financial condition of the enlarged group
Both the Company and Awakn have been historically loss making, and it is
anticipated that the Group will continue to incur losses for the foreseeable
future
Both the Company and Awakn have each accumulated significant losses since
their inception. The Group will focus on funding its clinical and pre-clinical
stage research projects and the Group will have no immediate sources of
revenue. Shareholders should therefore be aware that the ongoing activities of
the Group are being supported by the equity fundraising, existing cash
resources and funds received from existing debt facilities entered into by
Awakn. As an early-stage biotechnology company engaged in clinical and
pre-clinical trials, the capital resources of the Group will be used to
develop these programmes.
There is no guarantee that any of the product candidates of the Group will
reach a point of being successfully commercialised. There is therefore a high
risk that the Group will continue to remain loss making for the foreseeable
future.
The combined losses of the Company and Awakn and anticipated future losses of
the Group could have an adverse impact on the market price of its ordinary
shares, its ability to raise capital and continued operations.
Risks associated with the business of the Group
Some of the Group's research programmes are at a very early stage of
progression and there is a greater risk of those projects not being
commercialised or abandoned
The Group will continue with research projects that are at a pre-clinical
phase, including its aminoindane new chemical entity ("NCE") research
programme. This focuses on developing serotonin, dopamine, noradrenalin
targeted small molecule therapeutics for trauma related mental health
disorders, such as PTSD.
On 10 December 2024, the Company announced initial findings from a study
undertaken by the University of Nottingham in relation to a NCE being
developed in collaboration with Awakn. Initial study indicated that these NCEs
could be used to treat PTSD and other trauma related conditions by improving
pro-social behaviours.
Investors should be aware that such studies remain in their infancy and much
more rigorous work will be required to demonstrate the safety and efficacy of
such compounds to assess their potential to treat PTSD and other trauma
related conditions. Pre-clinical and clinical data is often susceptible to
varying interpretations and analyses, and many companies that believed their
product candidates performed satisfactorily in pre-clinical studies and
clinical trials nonetheless failed to obtain regulatory approval or reach a
stage of being commercially viable.
Uncertainty relating to the success of Argent Biopharma and consequently the
revenue generating potential of royalty agreements
Despite Argent Biopharma indicating that they are making positive strides
towards the commercial production of their product range in particular
Cannepil there is still an inherent degree of uncertainty on whether the drug
will reach its commercial potential. In addition timings related to the
product line are also uncertain and pharmaceutical production has the
potential to be impacted by a large number of factors.
Risks associated with companies operating in the biotechnology and
pharmaceutical sector
Difficulty enrolling patients in clinical trials may result in the completion
of the trials being delayed or cancelled
As the Company's product candidates advance from preclinical testing to
clinical testing, and then through progressively larger and more complex
clinical trials, the Company will need to enrol an increasing number of
patients that meet its eligibility criteria. There is significant competition
for recruiting patients in clinical trials, and the Company may be unable to
enrol the patients the Company needs to complete clinical trials on a timely
basis or at all. The factors that affect the Company's ability to enrol
patients is largely uncontrollable.
Any delays or failures in patient enrolment could significantly impact the
progress of the Company's clinical trials, leading to increased costs,
extended development timelines, or the inability to obtain regulatory
approvals. This, in turn, could materially and adversely affect the Company's
business, financial condition, results of operations, and future prospects.
General delays in clinical tests could results in delay in commercialising
product candidates
It is intended that the Group will continue to progress AWKN-001 towards the
completion of a Phase 3 trial and it will continue work towards undertaking a
Phase 2 trial in relation to AWKN-002. The Group cannot predict whether any
clinical trials will begin as planned, if they will need to be restructured,
or will be completed on schedule, or at all. The Group's product development
costs will increase if the Group experiences delays in clinical testing.
Significant clinical trial delays could shorten any periods during which the
Group may have the exclusive right to commercialise its product candidates or
allow the Group's competitors to bring products to market before it is able
to, which would impair the Group's ability to successfully commercialise its
product candidates and may harm the Group's financial condition, results of
operations and prospects.
The commencement and completion of clinical trials for the Group's products
may be delayed for several reasons, including delays related, but not limited,
to:
· failure by regulatory authorities to grant permission to proceed or
placing the clinical trial on hold;
· patients failing to enrol or remain in the Group's trials at the rate
the Group expects;
· suspension or termination of clinical trials by regulators for many
reasons, including concerns about patient safety or failure of the Group's
contract manufactures to comply with requirements;
· delays or failure to obtain clinical supply from contract
manufacturers of the Group's products necessary to conduct clinical trials;
· product candidates demonstrating a lack of safety or efficacy during
clinical trials;
· patients choosing an alternative treatment for the indications for
which the Enlarged Group is developing any of its product candidates or
participating in competing clinical trials;
· patients failing to complete clinical trials due to dissatisfaction
with the treatment, side effects or other reasons;
· reports of clinical testing on similar technologies and products
raising safety or efficacy concerns;
· competing clinical trials and scheduling conflicts with participating
clinicians;
The Group's product development costs will increase if the Group experiences
delays in testing or approval or if the Group needs to perform more or larger
clinical trials than planned. Additionally, changes in regulatory requirements
and policies may occur, and the Group may need to amend study protocols to
reflect these changes. Amendments may require the Group to resubmit its
study protocols to regulatory authorities, review boards or ethics committees
for re-examination, which may impact the cost, timing or successful completion
of that trial. Delays or increased product development costs may have a
material adverse effect on the Enlarged Group's business, financial condition
and prospects.
Risk related to reliance on key personnel in particular key technical staff
The business of the Group is that of a biotechnology company requiring
specific technical and scientific skills required to undertake the R&D
activities currently being planned by the Enlarged Group. Qualified
individuals are in high demand, and the Company may incur significant costs to
attract and retain them.
The loss of the services of any key personnel, or an inability to attract
other suitably qualified persons when needed, could prevent us from executing
on its business plan and strategy, and it may be unable to find adequate
replacements on a timely basis, or at all. The Group particularly relies
upon its key technical staff to complete important research and development on
behalf of the Group, and the loss of such individuals could result in
interruptions and delays to ongoing work, which may, in turn, have a material
adverse effect on the progress and success of the Enlarged Group's R&D
activities.
Anthony Tennyson
Chief Executive Officer
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOLVONIS THERAPEUTICS PLC
Opinion
We have audited the financial statements of Solvonis Therapeutics PLC (the
'Parent Company') and its subsidiaries (the "Group"), for the year ended 31
December 2024 which comprise the consolidated statement of comprehensive
income, the consolidated and company statements' of financial position, the
consolidated and company statements' of changes in equity, the consolidated
and company statements' of cashflows and notes to the financial statements,
including a summary of significant accounting policies..
In our opinion:
· the financial statements of Solvonis Therapeutics PLC give a true and
fair view of the state of the Group's and of the Parent Company's affairs as
at 31 December 2024 and of the Group's loss for the year then ended and of the
Group's cashflows position as at 31 December 2024;
· the Group financial statements have been properly prepared in
accordance with UK adopted international accounting standards; and
· the Parent Company financial statements have been properly prepared
in accordance with UK adopted international accounting standards; and
· the Group and Parent Company financial statements have been prepared
in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the Group in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the Financial Reporting
Council's Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the
risks of material misstatement in the financial statements. In particular, we
looked at where the directors made subjective judgements, for example in
respect of significant accounting estimates that involved making assumptions
and considering future events that are inherently uncertain. We also addressed
the risk of management override of internal controls, including evaluating
whether there was evidence of bias by the directors that represented a risk of
material misstatement due to fraud.
We tailored the scope of our audit to ensure that we performed sufficient work
to be able to give an opinion on the financial statements as a whole, taking
into account the structure of the Group and the Parent Company, the accounting
processes and controls, and the industry in which they operate.
Our scoping considerations for the Group audit were based both on financial
information and risk. In total we have identified a single distinct component
within the group financial statements.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in
evaluating the effect of identified misstatements on the audit and in forming
our audit opinion. Based on our professional judgement, we determined
materiality and performance materiality for the financial statements of the
Group and of the Parent Company as follows:
Group financial statements Parent company financial statements
Materiality £96,000 (2023: £73,000) £86,400 (2023: £63,300)
Basis for determining materiality 3% of gross assets 3% of Company gross assets (capped below group materiality)
Rationale for benchmark applied The group no longer had a trade at the period end and as such an asset-focused The company operates as a holding company for the group and has historically
benchmark is considered appropriate. Particularly given the main value in the had no material income. As such an asset-focused benchmark is considered
business at present is its intangible asset holdings as well as cash on hand appropriate. Particularly given the main value in the business at present is
for future investment and trading opportunities. its intangible asset holdings as well as cash on hand for future investment
and trading opportunities.
This aligns with the disclosed key performance indicators, which in turn
reflect the focus areas of users of the financial statements. This aligns with the disclosed key performance indicators, which in turn
reflect the focus areas of users of the financial statements.
Performance materiality £72,000 (2023: £54,000) £64,800 (2023: £47,475)
Basis for determining performance materiality 75% of materiality 75% of company materiality
Reporting threshold £4,800 (2023: £3,650) £4,320 (2023: £3,165)
Basis for determining reporting threshold 5% of materiality 5% of materiality
We reported all audit differences found in excess of our reporting threshold
to the audit committee.
For each Group component within the scope of our Group audit, we determined a
materiality that is less than our overall Group materiality.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters, including our discussion of going concern, were addressed in
the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these
matters. This is not a complete list of all risks identified by our audit.
Valuation & impairment of intangible assets: £2,088,000 (2023:
£2,068,000)
Significance and nature of the key audit matter How our audit addressed the key audit matter
The group and parent company's overall net asset position is driven by this We recalculated the expected value of the founder shares and other capitalised
intangible asset value. As such any misstatement over this balance may have a patent costs based on the underlying agreements and other audit evidence to
material impact on the true and fair position of the financial statements as a ensure the accuracy of capitalised amounts.
whole.
We considered the specific nature of the original transaction to ensure that
This balance primarily relates to the issue of shares in 2018 to a founding the requirements of IAS 38 were met for the recognition of intangible assets
director on the acquisition of their 'know how' and patents transferred. with respect to these costs.
As required under IAS 36 the Directors undertake an annual assessment of these We considered impairment indicators by first confirming that the group
intangible assets to discern whether there are any impairment indicators that maintain the rights and obligations with respect to the patents developed
result in a impairment charge being required. using the former director's 'know-how'. We considered the technical ability of
existing employees of the company to utilise this know-how. We considered the
lifespan of patents in place. We then considered current commercial contracts
in place in order to monetise these patents. We considered the value of
As balance is highly material in the financial statements and subject to expected sales by third parties under contract and calculated expected returns
significant management judgement with respect to the presence and quantum of to the company from these sales in the form of royalties based on the terms
impairment we deem there to be a key audit risk in place over its valuation. within the contract.
We considered the headroom within the model of discounted royalties' inflows
(an established proxy for value in use) and compared this to the carrying
value to ascertain that this headroom was substantial.
Key observations
There is inherent uncertainty over the value of the intangible assets as there
is inherent uncertainty over actualisation of future royalties' inflows. As
the current contract in place is with an operation in the development phase
the ultimate commercial success of this is currently unknown. Should they move
into a commercially viable phase the value of related sales is also currently
unknown. This makes it difficult to fully substantiate the value of this
intangible asset as at the date of the approval of the financial statements.
However, our audit report is not qualified in this area on the basis that:
· Audit evidence obtained did not suggest any significant issues with
the project plan which would lead to increased doubt over the eventual success
of the project
· There is substantial headroom in the sales modelling with respect to
this contract, should the ultimate commercial success of the project be less
than anticipated
· The contract in place is not exclusive, therefore there will be other
potential revenue generating partnerships that the company can enter into
Material uncertainty relating to going concern
We draw attention to Note 2.2 in the financial statements, which indicates
that there is some uncertainty over the going concern status of the Group.
This is due to the business currently being in the research and development
phase where it is reliant on fundraising for its continued development of
therapeutic products to eventually progress to the stage of commercial
viability. As the ultimate success of future fundraising is an inherent
uncertainty for businesses generally this in turn creates an inherent
uncertainty over the going concern of the company.
However, our opinion is not modified in respect of this matter. This is based
on the outcome of the following audit procedures where we:
· Considered the adequacy of systems and controls in place for
management to prepare reliable forecasting and to manage the on-going working
capital requirements of the business; and
· Assessed the financial position of the group and parent company as at
the year end date to confirm the financial resources available; and
· obtained and scrutinised the forecasts for the parent company's
overhead requirements for the period to December 2026, gaining assurance that
the assumptions involved were reasonable; and
· obtained and scrutinised the forecasts of the new therapeutics
project being developed for the period to December 2026, gaining assurance
that the assumptions involved were reasonable; and
· calculated the net funding requirement, taking into account current
financial resources and current secured funding; and
· considered available evidence of the ability of the business to
generate debt and equity funding; and
· considered other factors potentially relevant to going concern
including potential litigation and other legal matters, potential additional
revenue streams, including from royalties generated via the patents currently
owned by the business.
We were able to gain sufficient audit evidence to confirm that going concern
remains the most appropriate basis for preparing the financial statements,
however, an inherent uncertainty remains in place leading to a material
uncertainty relating to going concern.
Due to the above material uncertainty over going concern there is additional
uncertainty surrounding the valuation of the intangible assets of £2,088,000
(2023: £2,068,000) which may generate future revenue via an arrangement with
an external party. However, this would not be for several years and due to the
inherent nature of development projects, such as the one entered into, it is
not possible to value the intangible asset without uncertainty. Please see
narrative in the key risk section of this audit report for further detail.
We have not modified our audit report in respect to these matters.
Our responsibilities and the responsibilities of the Directors with respect to
going concern are described in the relevant sections of this report.
Our consideration of climate change related risks
The financial impacts on the Group of climate change and the transition to a
low-carbon economy (climate change) were considered in our audit where they
have the potential to directly or indirectly impact key judgements and
estimates within the financial statements.
The Group continues to develop its assessment of the potential impacts of
climate change. Climate risks have the potential to materially impact the key
judgements and estimates within the financial report. Our audit considered
those risks that could be material to the key judgements and estimates in the
assessment of the carrying value of non-current assets and closure and
rehabilitation provisions.
The key judgements and estimates included in the financial statements
incorporate actions and strategies, to the extent they have been approved and
can be reliably estimated in accordance with the Group's accounting policies.
Accordingly, our key audit matters address how we have assessed the Group's
climate-related assumptions to the extent they impact each key audit matter.
Other information
The other information comprises the information included in the Annual Report
other than the financial statements and our Auditor's report thereon. The
Directors are responsible for the other information. Our opinion on the
financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Our opinion on the Remuneration report
Kreston Reeves has audited the Remuneration report set out on pages 8 to 9 of
the Annual Report for the financial year. The Directors of the Company are
responsible for the preparation and presentation of the Remuneration report in
accordance with the Companies Act 2006. Kreston Reeves' responsibility is to
express an opinion on the Remuneration report, based on our audit conducted in
accordance with International Accounting Standards. In Kreston Reeves'
opinion, the Remuneration report of the Group for the period complies with the
requirements of the Companies Act 2006.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the Group and Parent
Company and its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the parent company,
or returns adequate for our audit have not been received from branches not
visited by us; or
· the parent company financial statements are not in agreement with the
accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are
not made; or
· we have not received all the information and explanations we require
for our audit
Responsibilities of directors
As explained more fully in the directors' responsibilities statement (set out
on pages 11 to 12), the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Group's and Parent
Company's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or parent
company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Capability of the audit in detecting irregularities, including fraud
· Discussions with management and assessment of known or suspected
instances of non-compliance with laws and regulations (including health and
safety) and fraud, and review of the reports made by management; and
· Assessment of identified fraud risk factors; and
· Testing of internal controls procedures relating to key business
cycles more susceptible to fraud and other irregularities including cash,
payroll and credit card expenditure; and
· Review of cash and credit card expenditure to confirm no evidence of
personal benefit; and
· Challenging assumptions and judgements made by management in its
significant accounting estimates, in particular with respect to impairment
indicators with respect to intangible assets; and
· Checking and reperforming the reconciliation of key control accounts;
and
· Performing analytical procedures to identify any unusual or
unexpected relationships, including related party transactions, that may
indicate risks of material misstatement due to fraud; and
· Confirmation of related parties with management, and review of
transactions throughout the period to identify any previously undisclosed
transactions with related parties outside the normal course of business; and
· Reading minutes of meetings of those charged with governance,
reviewing internal audit reports and reviewing correspondence with relevant
tax and regulatory authorities; and
· Review of significant and unusual transactions and evaluation of the
underlying financial rationale supporting the transactions; and
· Identifying and testing journal entries, with the use of data
analytics, in order to identify journals carrying a higher fraud risk profile
and substantiating these to appropriate audit evidence.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance.
As part of an audit in accordance with ISAs (UK), we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
· Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
· Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group's internal control.
· Evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related disclosures made by the
directors.
· Conclude on the appropriateness of the directors'
use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group's or the parent
company's ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our
auditor's report to the related disclosures in the financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor's report.
However, future events or conditions may cause the Group or the parent company
to cease to continue as a going concern.
· Evaluate the overall presentation, structure and content of
the financial statements, including the disclosures, and whether the financial
statements represent the underlying transactions and events in a manner that
achieves fair presentation.
· Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within the Group
to express an opinion on the consolidated financial statements. We are
responsible for the direction, supervision and performance of the Group audit.
We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that we
identify during our audit.
Other matters which we are required to address
We were appointed by the Audit Committee in December 2024 to audit the
financial statements. Our total uninterrupted period of engagement is one
period, covering the financial year ended 31 December 2024.
Non-audit services prohibited by the Financial Reporting Council's Ethical
Standard were not provided to the Group or the Parent Company and we remain
independent of the Group and the Parent Company in conducting our audit.
Our audit opinion is consistent with the additional report to the Audit
Committee.
Use of our Report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Anne Dywer BSc(Hons) FCA (Senior Statutory Auditor)
For and on behalf of
Kreston Reeves LLP
Chartered Accountants
Statutory Auditor
London
SOLVONIS THERAPEUTICS PLC - COMPANY NUMBER 10776788
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
Year ended 31 Dec 2024 Year ended 31 Dec 2023
Note £'000 £'000
Continuing operations
Revenue 4 - 587
Cost of sales - (329)
Gross profit - 258
Operational costs 5 (41) (213)
Depreciation and amortisation 5 - (179)
Administrative expenses 5 (1,467) (2,145)
Gain on deconsolidation 23 125 -
Impairment 12 - (838)
Operating loss (1,383) (3,117)
Finance costs 7 (64) (3)
Loss before taxation (1,447) (3,120)
Income tax 8 - -
Loss for the year from continuing operations (1,447) (3,120)
Loss from discontinuing operations 23 (143) -
Loss for the year attributable to equity holders of the parent (1,590) (3,120)
Other comprehensive (loss)/income
Foreign currency translation 62 48
Derecognition of foreign exchange reserve 23 (109) -
Other comprehensive (loss)/income (47) 48
Total comprehensive loss for the year attributable to equity holders of the (1,637) (3,072)
parent
Earnings per share (basic and diluted) - pence 9 (0.125) (3.00)
The accompanying notes form an integral part of the consolidated financial
statements
SOLVONIS THERAPEUTICS PLC - COMPANY NUMBER 10776788
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
As at 31 Dec 2024 As at 31 Dec 2023
Note £'000 £'000
Non-current assets
Right of use assets 12 - 39
Intangible assets 10 2,088 2,068
Other non-current assets 11 300 13
Total non-current assets 2,388 2,120
Current assets
Cash and cash equivalents 17 757 155
Trade and other receivables 16 58 108
Inventory 14 - 51
Total current assets 815 314
TOTAL ASSETS 3,203 2,434
Non-Current liabilities
Lease liability 12 - 22
Total non-current liabilities - 22
Current liabilities
Trade and other payables 18 119 249
Deferred income - 93
Provisions 20 - 32
Lease liability 12 - 12
Total current liabilities 119 386
Total liabilities 119 408
NET ASSETS 3,084 2,026
Equity -
Issued share capital 21 2,233 41
Share premium 21 7,362 7,001
Share capital to issue 21 - 175
Capital reduction reserve 2,500 2,500
Foreign exchange reserve - 47
Share based payments reserve 22 1,544 1,227
Retained earnings (10,555) (8,965)
TOTAL EQUITY 3,084 2,026
The financial statements were approved by the board on 15 April 2025
Chief Executive Officer - Anthony Tennyson
The accompanying notes form an integral part of the consolidated financial
statements
SOLVONIS THERAPEUTICS PLC - COMPANY NUMBER 10776788
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
As at 31 Dec 2024 As at 31 Dec 2023
Note £'000 £'000
Non-current assets
Intangible assets 10 2,088 2,068
Other non-current assets 11 300 -
Total non-current assets 2,388 2,068
Current assets
Cash and cash equivalents 17 757 12
Trade and other receivables 16 58 31
Total current assets 815 43
TOTAL ASSETS 3,203 2,111
Current liabilities
Provisions 20 - 33
Trade and other payables 18 119 117
Total current liabilities 119 150
Total liabilities 119 150
NET ASSETS 3,084 1,961
Equity
Issued share capital 21 2,233 41
Share premium 21 7,362 7,001
Share capital to issue 21 - 175
Capital reduction reserve 2,500 2,500
Share based payments reserve 22 1,544 1,227
Retained earnings (10,555) (8,983)
TOTAL EQUITY 3,084 1,961
As permitted by Section 408 of the Companies Act 2006, the profit and loss
account of the parent company has not been separately presented in these
accounts. The Company loss for the year was £1,571,634 (2023: loss of
£5,085,548).
The financial statements were approved by the board on 15 April 2025
Chief Executive Officer - Anthony Tennyson
The accompanying notes form an integral part of the consolidated financial
statements
SOLVONIS THERAPEUTICS PLC - COMPANY NUMBER 10776788
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 31 DECEMBER 2024
Share capital Shares to be issued Share premium Capital reduction reserve Share based payment reserve Foreign exchange Reserve Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 December 2022 41 - 7,001 2,500 858 (1) (5,845) 4,554
Loss for period - - - - - - (3,120) (3,120)
Other comprehensive income - - - - - 48 - 48
Total comprehensive income for year - - - - - 48 (3,120) (3,072)
Transactions with owners in own capacity
Waiver of Director and advisor fees - 175 - - - - - 175
Employee options - - - - 369 - - 369
Transactions with owners in own capacity - 175 - - 369 - - 544
Balance at 31 December 2023 41 175 7,001 2,500 1,227 47 (8,965) 2,026
Loss for period - - - - - - (1,590) (1,590)
Other comprehensive income - - - - - 62 - 62
Total comprehensive income for year - - - - - 62 (1,590) (1,528)
Transactions with owners in own capacity
Waiver of Director and advisor fees 60 - 339 - - - - 399
Shares issued during the year 2,132 (175) 63 - - - - 2,020
Disposal of subsidiary - - - - - (109) - (109)
Employee options - - - - 317 - - 317
Share issue costs - - (41) - - - - (41)
Transactions with owners in own capacity 2,192 (175) 361 - 317 (109) - 2,586
Balance at 31 December 2024 2,233 - 7,362 2,500 1,544 - (10,555) 3,084
The accompanying notes form an integral part of the consolidated financial
statements
SOLVONIS THERAPEUTICS PLC - COMPANY NUMBER 10776788
COMPANY STATEMENT OF CHANGES IN EQUITY
AS AT 31 DECEMBER 2024
Share capital Shares to be issued Share premium Capital reduction reserve Share based payment reserve Foreign exchange Reserve Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 December 2022 41 - 7,001 2,500 858 - (3,898) 6,502
Loss for period - - - - - - (5,085) (5,085)
Other comprehensive income - - - - - - - -
Total comprehensive income for year - - - - - - (5,085) (5,085)
Transactions with owners in own capacity
Waiver of Director and advisor fees - 175 - - - - - 175
Employee options - - - - 369 - - 369
Transactions with owners in own capacity - 175 - - 369 - - 544
Balance at 31 December 2023 41 175 7,001 2,500 1,227 - (8,983) 1,961
Loss for period - - - - - - (1,572) (1,572)
Other comprehensive income - - - - - - - -
Total comprehensive income for year - - - - - - (1,572) (1,572)
Transactions with owners in own capacity
Waiver of Director and advisor fees 60 - 339 - - - - 399
Shares issued during the year 2,132 (175) 63 - - - - 2,020
Employee options - - - - 317 - - 317
Share issue costs - - (41) - - - - (41)
Transactions with owners in own capacity 2,192 (175) 361 - 317 - - 2,695
Balance at 31 December 2024 2,233 - 7,362 2,500 1,544 - (10,555) 3,084
The accompanying notes form an integral part of the consolidated financial
statements
SOLVONIS THERAPEUTICS PLC - COMPANY NUMBER 10776788
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
Year ended Year ended
31 December 2024
31 December 2023
Note £'000 £'000
Cash flow from operating activities
Loss for the financial year (1,590) (3,120)
Adjustments for:
Share based payments 317 369
Settlement of fees through issue of equity 231 -
Depreciation on fixed assets - 165
Impairment of fixed assets - 736
Impairment of inventory 14 - 117
Gain on deconsolidation 23 (125) -
Finance expenses 7 64 3
Amortization on right-of-use assets - 12
Foreign exchange movements - 67
Changes in working capital:
Decrease in trade and other receivables 31 6
Increase / (decrease) in trade and other payables (58) 393
(Increase) / decrease in inventory - 14
Net cash outflow from operating activities (1,130) (1,238)
Cash flows from investing activities
Purchase of property, plant and equipment 13 - (216)
Investment in non-current asset (320) -
Repayments on right-of-use assets (4) (16)
Disposal of subsidiary, net of cash disposed (13) -
Net cash flow from investing activities (337) (232)
Cash flows from financing activities
Proceeds from issue of shares 1,924 -
Share Issue Costs (41) -
Proceeds from issue of convertible notes 200 -
Net cash flow from financing activities 2,083 -
Net increase in cash and cash equivalents 616 (1,470)
Cash and cash equivalents at beginning of the period 155 1,640
Foreign exchange effect on cash balance (14) (15)
Cash and cash equivalents at end of the period 17 757 155
The accompanying notes form an integral part of the consolidated financial
statements
Net debt disclosure has not been included as the Group does not have any debt
at year end
SOLVONIS THERAPEUTICS PLC - COMPANY NUMBER 10776788
COMPANY STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
Year ended Year ended
31 December 2024
31 December 2023
Note £'000 £'000
Cash flow from operating activities
Loss for the financial year (1,572) (5,085)
Adjustments for:
Share based payments 317 369
Settlement of fees through issue of equity 231 -
Impairment charge on investment in subsidiaries - 1,304
Impairment charge on intercompany receivable - 2,044
Finance expenses 7 64 -
Foreign exchange movements - 68
Changes in working capital:
Decrease in trade and other receivables (1) 3
Increase / (decrease) in trade and other payables (57) 159
Net cash outflow from operating activities (1,018) (1,138)
Cash flows from investing activities
Loans to subsidiary - (398)
Investment in non-current asset (320) -
Net cash flow from investing activities (320) (398)
Cash flows from financing activities
Proceeds from issue of shares 1,924 -
Share Issue Costs (41) -
Proceeds from issue of convertible note 200 -
Net cash flow from financing activities 2,083 -
Net increase in cash and cash equivalents 745 (1,536)
Cash and cash equivalents at beginning of the period 12 1,548
Foreign exchange effect on cash balance - -
Cash and cash equivalents at end of the period 17 757 12
The accompanying notes form an integral part of the consolidated financial
statements
Net debt disclosure has not been included as the Company does not have any
debt at year end
SOLVONIS THERAPEUTICS PLC - COMPANY NUMBER 10776788
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
1 GENERAL INFORMATION
Solvonis Therapeutics Plc ("the Company" or "Solvonis") was incorporated in
England and Wales as a limited company on 18 May 2017 as Graft Polymer (UK)
Limited and was re-registered as a public limited company, Graft Polymer (UK)
Plc, on 1 July 2021. On 6 January 2025 the company changed its name to
Solvonis Therapeutics Plc. The Company is domiciled in England and Wales with
its registered office at Eccleston Yards, 25 Eccleston Place, London, SW1W
9NF. The Company's registered number is 10776788.
The principal activities of the Company and all of its subsidiaries
collectively referred to as "the Group" are the development of intellectual
property related to the treatment of mental health and substance use
disorders, and co-developing therapeutics for mental health disorders.
The consolidated financial statements ("financial statements") were approved
for issue by the Board of Directors on 15 April 2025.
2 ACCOUNTING POLICIES
IAS 8 requires that management shall use its judgement in developing and
applying accounting policies that result in information which is relevant to
the economic decision-making needs of users, that are reliable, free from
bias, prudent, complete and represent faithfully the financial position,
financial performance and cash flows of the entity.
2.1 Basis of preparation
The financial statements have been prepared in accordance with UK-adopted
international accounting standards in conformity with the Companies Act 2006.
The financial statement have been prepared under the historical cost
convention unless stated otherwise. The principal accounting policies are set
out below and have, unless otherwise stated, been applied consistently for all
periods presented in these financial statements. The financial statements have
been prepared in £GBP and presented to the nearest £'000.
The functional currency for each entity in the Group is determined as the
currency of the primary economic environment in which it operates. The
functional currency of the Company is Pounds Sterling (£) as this is the
currency that finance was raised in.
The functional currency of the operating subsidiary in Slovenia was the Euro
(€) and was the currency that mainly influences labour, material and other
costs of providing services. The presentational currency of the Group is
Pounds Sterling (£). Foreign operations were translated in accordance with
the policies set out further below in the notes at note 2.4.
The Group presents its financial statements for the year ended 31 December
2024 and presents comparatives for the year ending 31 December 2023.
2.2 Going concern
The Directors, having made due and careful enquiry, are of the opinion that
the Company and the Group will have access to adequate working capital to
execute its operations over the next 12 months.
The Directors meet monthly to discuss all matters of the Group including the
liquidity of the Group and its status as a going concern. The Directors review
cashflow forecasts in conjunction with considering other key factors such as
current cash resources, cash burn rate, access to capital and sensitivity of
key inputs when assessing the financial health of the Group.
Post period end the Group announced that it had entered into an arrangement
agreement with Awakn Life Sciences Corp. setting out the basis on which the
parties will cooperate to execute a transaction whereby Solvonis will acquire
all issued and outstanding common shares in the capital of Awakn, all
outstanding restricted share units in the capital of Awakn and all outstanding
deferred share units in the capital of Awakn by way of a Court approved plan
of arrangement under the British Columbia Business Corporations Act. Although
the transaction will not require a cash outlay from Solvonis the Directors
plan to complete a fundraise alongside the acquisition to assist with the
financing of various clinical trials the Group plans to complete.
Currently the Group has a relatively low cash burn rate and has direct
oversight over all expenses. In its current form the Group has limited
committed liabilities however should the acquisition of Awakn complete the
Board are aware that they will require additional funding to complete the
desired trials. As a result the auditors have included a material uncertainty
relating to going concern within their audit report as is common amongst
"pre-revenue" companies. Although the Board is advanced in talks with various
brokers to facilitate funding they acknowledge that due to the uncertainty of
timing and quantum that a material uncertainty is appropriate in this
instance.
After due consideration of all the factors, the Directors consider that the
Group will have adequate financial resources to continue in operational
existence for the foreseeable future (being a period of at least 12 months
from the date of this report) and, for this reason, the financial statements
have been prepared on a going concern basis.
2.3 Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries) made up
to 31 December each year. Per IFRS 10, control is achieved when the Company:
· has the power over the investee;
· is exposed, or has rights, to variable returns from its involvement
with the investee; and
· has the ability to use its power to affects its returns.
The Company reassesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control listed above. When the Company has less than a majority
of the voting rights of an investee, it considers that it has power over the
investee when the voting rights are sufficient to give it the practical
ability to direct the relevant activities of the investee unilaterally. The
Company considers all relevant facts and circumstances in assessing whether or
not the Company's voting rights in an investee are sufficient to give it
power, including:
· the size of the Company's holding of voting rights relative to the size
and dispersion of holdings of the other vote holders;
· potential voting rights held by the Company, other vote holders or
other parties;
· rights arising from other contractual arrangements; and
· any additional facts and circumstances that indicate that the Company
has, or does not have, the current ability to direct the relevant
activities at the time that decisions need to be made, including voting
patterns at previous shareholders' meetings.
Consolidation of a subsidiary begins when the Company obtains control over the
subsidiary and ceases when the Company loses control of the subsidiary.
Specifically, the results of subsidiaries acquired or disposed of during the
year are included in profit or loss from the date the Company gains control
until the date when the Company ceases to control the subsidiary. Where
necessary, adjustments are made to the financial statements of subsidiaries to
bring the accounting policies used into line with the Group's accounting
policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows
relating to transactions between the members of the Group are eliminated on
consolidation.
2.4 Foreign currency translation
i. Functional and presentation currency
Items included in the financial statements for each of the Group's entities
are measured using the currency of the primary economic environment in which
the entity operates ('the functional currency'). The consolidated financial
statements is presented in £ Sterling, which is the Company's presentation
and functional currency. The individual financial statements of each of the
Company's wholly owned subsidiaries are prepared in the currency of the
primary economic environment in which it operates (its functional 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. Group companies
The results and financial position of all the Group entities that have a
functional currency different from the presentation currency are translated
into the presentation currency as follows:
- assets and liabilities for each balance sheet presented are
translated at the closing rate at the date of the balance sheet;
- income and expenses for each income statement are translated at the
average exchange rate; and all resulting exchange differences are recognised
as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net
investment in foreign operations are taken to shareholders' equity. When a
foreign operation is partially disposed or sold, exchange differences that
were recorded in equity are recognised in the income statement as part of the
gain or loss on sale.
2.5 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 maker, who are responsible for allocating resources and assessing
performance of the operating segments, has been identified as the executive
Board of Directors. As the Group disposed of its Slovenian subsidiary during
the year the Directors have concluded that the Group now operates solely in
the singular jurisdiction of the United Kingdom. As a result the Company has
removed the segment reporting presented in previous financial statements.
2.6 Impairment of non-financial assets
Non-financial assets and intangible assets not subject to amortisation are
tested annually for impairment at each reporting date and whenever events or
changes in circumstances indicate that the carrying amount may not be
recoverable.
An impairment review is based on forecasted future cash flows. If the expected
discounted future cash flow from the use of the assets and their eventual
disposal is less than the carrying amount of the assets, an impairment loss is
recognised in profit or loss and not subsequently reversed.
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are largely independent cash flows (cash generating
units or 'CGUs').
2.7 Inventory
Inventories are stated at the lower of cost and net realisable value. Costs of
inventories are determined on a first-in-first out basis. Net realisable value
represents the estimated selling price for inventories less all estimated
costs of completion and costs necessary to make the sale.
2.8 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, and demand
deposits with banks and other financial institutions and bank overdrafts.
2.9 Financial instruments
IFRS 9 requires an entity to address the classification, measurement and
recognition of financial assets and liabilities.
a) Classification
The Group classifies its financial assets in the following measurement
categories:
· those to be measured at amortised cost; and
· those to be measured subsequently at fair value through profit or
loss.
The classification depends on the Group's business model for managing the
financial assets and the contractual terms of the cash flows.
The Group 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.
b) Recognition
Purchases and sales of financial assets are recognised on trade date (that
is, the date on which the Group 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 Group
has transferred substantially all the risks and rewards of ownership.
c) Measurement
At initial recognition, the Group 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.
d) Impairment
The Group 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 Group applies
the simplified approach permitted by IFRS 9, which requires expected lifetime
losses to be recognised from initial recognition of the receivables.
2.10 Leases
The lease payments are discounted using the interest rate implicit in the
lease. If that rate cannot be readily determined, which is generally the case
for leases in the Company, the lessee's incremental borrowing rate is used,
being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right-of-use asset
in a similar economic environment with similar terms, security and conditions.
In all instances the leases were discounted using the incremental borrowing
rate.
Lease payments are allocated between principal and finance cost. The finance
cost is charged to profit or loss over the lease period. Right-of-use assets
are measured at cost which comprises the following:
- The amount of the initial measurement of the lease liability;
- Any lease payments made at or before the commencement date less any
lease incentives received;
- Any initial direct costs; and
- Restoration costs.
Right-of-use assets are depreciated over the shorter of the asset's useful
life and the lease term on a straight line basis. If the Company is reasonably
certain to exercise a purchase option, the right-of-use asset is depreciated
over the underlying asset's useful life.
Lease payments to be made under reasonably certain extension options are also
included in the measurement of the liability.
Payments associated with short-term leases (term less than 12 months) and all
leases of low-value assets (generally less than £5k) are recognised on a
straight-line basis as an expense in profit or loss.
2.11 Equity
Share capital is determined using the nominal value of shares that have been
issued.
Share capital to be issued relates to salaries foregone by Directors and other
consultants. Upon the issue publication of a prospectus shares will be issued
to compensate the necessary parties and will be allocated amongst the share
capital and share premium accounts.
The Share premium account includes any premiums received on the initial
issuing of the share capital. Any transaction costs associated with the
issuing of shares are deducted from the Share premium account, net of any
related income tax benefits.
For the purposes of presenting consolidated financial statements, the assets
and liabilities of group's foreign operations are translated at the exchange
rates prevailing at the balance sheet date and items of income and expenditure
are translated at the average exchange rate for the period. Exchange
differences arising are recognised in other comprehensive income and
accumulated in the Foreign Currency Reserve within equity.
Equity-settled share-based payments are credited to a share-based payment
reserve as a component of equity until related options or warrants are
exercised or lapse.
The foreign exchange reserve policy is set out in note 2.4.
Capital reduction reserve represents funds sent from the parent company to
subsidiary that on the approval of Directors was reclassified from a loan in
the subsidiary to an investment.
Retained losses includes all current and prior period results as disclosed in
the income statement.
2.12 Share based payments
The Group has made awards of warrants and options on its unissued share
capital to certain parties in return for services provided to the Group. The
valuation of these warrants involved making a number of critical estimates
relating to price volatility, future dividend yields, expected life of the
options and interest rates. These assumptions have been integrated into the
Black Scholes Option Pricing model and the Monte Carlo valuation model to
derive a value for any share-based payments. These assumptions are described
in more detail in note 22.
2.13 Earnings per share
The Group 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.
2.14 Revenue
Under IFRS 15, Revenue from Contracts with Customers, five key points to
recognise revenue have been assessed:
Step 1: Identity the contract(s) with a customer;
Step 2: Identity the performance obligations in the contract;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance obligations in the
contract; and
Step 5: Recognise revenue when (or as) the entity satisfies a performance
obligation.
The Group recognises revenue when the amount of revenue can be reliably
measured and it is probable that future economic benefits will flow to the
entity. Revenue is measured at the fair value of the consideration received or
receivable and represents amounts receivable for goods provided in the normal
course of business, net of discounts, VAT and other sales related taxes.
Revenue is reduced for estimated customer returns, rebates and other similar
allowances. Sales of goods are recognised when the control of the goods is
transferred to the buyer at an amount that reflects the consideration to which
the Group expects to be entitled in exchange for those goods. Control is
considered to have transferred generally on despatch as most items are sold on
a cost includes freight basis; or on delivery where Delivered Duty Paid
("DDP") Incoterms are used. The normal credit terms are 30 to 60 days upon
delivery. Invoices that are issued before the transfer of control has occurred
are allocated as deferred income and then recognised as revenue when the
performance obligation has been satisfied.
The Group also derives revenue from the rendering of services, whereby revenue
from a contract to provide services is recognised in the period in which the
services are provided in accordance with the stage of completion of the
contract when all of the following conditions are satisfied:
- the amount of revenue can be measured reliably;
- it is probable that the Company will receive the consideration due
under the contract;
- the stage of completion of the contract at the end of the reporting
period can be measured reliably; and
- the costs incurred and the costs to complete the contract can be
measured reliably.
In arrangements where fees are invoiced ahead of revenue being recognized,
deferred income is recorded.
2.15 Taxation
Tax currently payable is based on taxable profit for the period. Taxable
profit differs from profit 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
liability for current tax is calculated using tax rates that have been enacted
or substantively enacted by the balance sheet date.
Deferred tax is proved in full on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the
financial statement. Deferred tax is determined using tax rates (and laws)
that have been enacted or substantively enacted by the balance sheet date and
are expected to apply when the related deferred income tax asset is realised
of the deferred tax liability is settled.
2.16 Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and any accumulated impairment losses.
When the Company acquires any plant and equipment it is stated in the accounts
at its cost of acquisition less a provision.
Depreciation is charged to write off the costs less estimated residual value
of plant and equipment on a straight basis over their estimated useful lives
being:
- Plant and equipment: 5 - 7 years
- Buildings and leasehold improvements: 20 years
Estimated useful lives and residual values are reviewed each year and amended
as required.
2.17 Intangible assets
Intangible assets acquired are initially recognised at cost. Indefinite life
intangible assets are not amortised and are subsequently measured at cost less
any impairment. The gains and losses recognised in profit or loss arising from
the derecognition of intangible assets are measured as the difference between
net disposal proceeds and the carrying amount of the intangible asset.
Intangible asset impairment reviews are undertaken annually, or more
frequently if events or changes in circumstances indicate a potential
impairment. The method and useful lives of finite life intangible assets are
reviewed annually. Changes in the expected pattern of consumption or useful
life are accounted for prospectively by changing the amortisation method or
period.
2.18 Investments in Subsidiaries
Investments in Group undertakings are stated at cost.
2.19 Provisions
Provisions represent liabilities of uncertain timing or amount that are
recognized when an entity has a present obligation (legal or constructive) as
a result of a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation, and a
reliable estimate can be made of the amount of the obligation.
The provision is measured at the best estimate of the expenditure required to
settle the present obligation at the end of the reporting period, taking into
account the risks and uncertainties surrounding the obligation. Where the
effect of the time value of money is material, the provision is discounted
using a pre-tax rate that reflects current market assessments of the time
value of money and, where appropriate, the risks specific to the liability.
Provisions are reviewed at the end of each reporting period and adjusted to
reflect the current best estimate. If it is no longer probable that an outflow
of resources embodying economic benefits will be required to settle the
obligation, the provision is reversed.
2.20 Financial liabilities
Other financial liabilities are initially recognised at fair values less any
directly attributable transaction costs. Subsequent to initial recognition,
these liabilities are measured at amortised cost using the effective interest
method.
2.21 Critical judgements and key sources of estimation
uncertainty
The preparation of the consolidated financial statements requires management
to make estimates and judgements and form assumptions that affects the
reported amounts of the assets, liabilities, revenue and costs during the
periods presented therein, and the disclosure of contingent liabilities at the
date of the financial information. Estimates and judgements are continually
evaluated and based on management's historical experience and other factors,
including future expectations and events that are believed to be reasonable.
Patents and related knowledge as an intangible asset (note 10)
The estimates and assumptions in relation to the carrying value of the
know-how intangible assets are considered to have the most significant effect
on the carrying amounts of the financial statements.
Management have prepared a 5 year financial forecast ending at December 2028
which looks at the revenue generating ability of these intangible assets. They
have confidence in various networks and contracts that the know-how will allow
the Group to generate royalty and licensing revenue with relatively low
associated costs. The Directors have a high level of confidence that these
contracts will ultimately prove to be highly lucrative for the Group and
support the current carrying value of the intangible assets.
The Directors do recognise that the success of the underlying product ranges
related to the royalty agreements is uncertain and hence will continue to
monitor the progress of these product lines.
However as there are no current indicators the intangible assets were assessed
and concluded that no impairment charge was required.
Share based payments (Note 22)
The Group issues options and warrants to its employees, directors, investors
and advisors. These are valued in accordance with IFRS 2 "Share-based
payments". In calculating the related charge on issuing shares and warrants
the Group will use a variety of estimates and judgements in respect of inputs
used including share price volatility, risk free rate, and expected life.
Changes to these inputs may impact the related charge. In the period the Group
did not perform any new valuations but released expenses to the statement of
other comprehensive income from valuations in prior periods.
2.22 New standards and interpretations not yet adopted
At the date of approval of these financial statements, the following standards
and interpretations which have not been applied in these financial statements
were in issue but not yet effective (and in some cases have not yet been
adopted by the UK):
Standard Impact on initial application Effective date
Amendments to IAS 21 - Lack of Exchangeability The amendments have been made to clarify: 1 January 2025 (early adoption permitted)
When a currency is exchangeable into another currency; and
How a company estimates a spot rate when a currency lacks exchangeability.
Amendment to IFRS 9 and IFRS 7 - Classification and Measurement of These amendments: 1 January 2026 (early adoption permitted)
Financial Instruments
Clarify the requirements for the timing of recognition and derecognition of
some financial assets and liabilities, with a new exception for some financial
liabilities settled through an electronic cash transfer system;
Clarify and add further guidance for assessing whether a financial asset meets
the solely payments of principal and interest (SPPI) criterion;
Add new disclosures for certain instruments with contractual terms that can
change cash flows (such as some instruments with features linked to the
achievement of environment, social and governance (ESG) targets); and
Make updates to the disclosures for equity instruments designated at Fair
Value through Other Comprehensive Income (FVOCI).
IFRS 18 Presentation and Disclosure in Financial Statements This is the new standard on presentation and disclosure in financial 1 January 2027 (early adoption permitted)
statements, with a focus on updates to the statement of profit or loss. The
key new concepts introduced in IFRS 18 relate to:
The structure of the statement of profit or loss;
Required disclosures in the financial statements for certain profit or loss
performance measures that are reported outside an entity's financial
statements (that is, management-defined performance measures); and
Enhanced principles on aggregation and disaggregation which apply to the
primary financial statements and notes in general.
IFRS 19 Subsidiaries without Public Accountability: Disclosures This new standard works alongside other IFRS Accounting Standards. An 1 January 2027 (early adoption permitted)
eligible subsidiary applies the requirements in other IFRS Accounting
Standards except for the disclosure requirements and instead applies the
reduced disclosure requirements in IFRS 19. IFRS 19's reduced disclosure
requirements balance the information needs of the users of eligible
subsidiaries' financial statements with cost savings for preparers. IFRS 19 is
a voluntary standard for eligible subsidiaries.
A subsidiary is eligible if:
it does not have public accountability; and
it has an ultimate or intermediate parent that produces consolidated financial
statements available for public use that comply with IFRS Accounting
Standards.
2.23 New standards and interpretations adopted
The standards and interpretations that are relevant to the Group, effective in
this financial year are listed below. There has been no impact on the
financial statements from the adoption of these standards.
Standard Impact on initial application Effective date
Amendments to IAS 1 -Classification of Liabilities as current or non- current Clarifies that the classification of liabilities as current or noncurrent Annual periods beginning on or after 1 January 2024
should be based on rights that exist at the end of the reporting period.
Amendments to IAS 1 - Noncurrent Liabilities with Covenants Clarifies that only those covenants with which an entity must comply on or Annual periods beginning on or after 1 January 2024
before the end of the reporting period affect the classification of a
liability as current or non-current.
Amendments to IFRS 16 - Lease Liability in a Sale and Leaseback 4 Specifies requirements relating to measuring the lease liability in a sale and Annual periods beginning on or after 1 January 2024
leaseback transaction after the date of the transaction.
Amendments to IAS 7 and IFRS 7 -Supplier Finance Arrangements 4 5 Requires an entity to provide additional disclosures about its supplier Annual periods beginning on or after 1 January 2024
finance arrangements.
3. SEGMENT REPORTING
The Chief Operating Decision Makers are the Board of Directors. The Board
reviews the Group's internal reporting in order to assess the performance of
the Group. Management has determined the operating segments based on the
reports reviewed by the Board and post the disposal of the Slovenian
subsidiary have determined that the Group now operates solely in the United
Kingdom and henceforth have not presented geographical segmental reporting.
Due to the disposal of the Slovenian operations on 2 May 2024, the
contributions from the Slovenian operating segment are not reported in the
loss from continuing operations in the statement of comprehensive income. For
details of the contribution of the Slovenian operations during the period up
until the point of disposal, refer to Note 23.
4. REVENUE
Year ended 31 Dec 2024 Year ended 31 Dec 2023
£'000
£'000
Product Sales Revenue
Slovenia - 5
Europe - 355
Rest of the world - 66
- 426
Services Sales Revenue
Slovenia - 161
- 161
Total Sales Revenue - 587
For details of the revenue from the Slovenian operations during the period up
until the point of disposal, refer to Note 23.
5. OPERATING COSTS AND ADMINISTRATIVE EXPENDITURE
Year ended 31 Dec 2024 Year ended 31 Dec 2023
£'000
£'000
Operating costs
Depreciation - (179)
Operational costs (41) (213)
(41) (392)
Administrative costs
Directors remuneration (354) (754)
Salary and wages - (276)
Professional and consulting fees (704) (389)
Travel expenses (12) (21)
Foreign exchange - (69)
Other expenses (80) (267)
Share based payments (317) (369)
(1,467) (2,145)
A reconciliation of the amounts from the statement of profit or loss to the
amounts reported in the Directors' Remuneration Report are detailed below:
Director Total Directors Remuneration Report Fees accrued in prior period settled in shares 31 Dec 2024
£'000 £'000 Statement of Profit or Loss
£'000
Anthony Tennyson 54 - 54
Nicholas Nelson 29 - 29
Dennis Purcell 13 - 12
Roby Zomer 67 (36) 31
Victor Bolduev 144 (50) 94
Pavel Kobzev 66 (30) 36
Alex Brooks 17 (9) 8
Yifat Steuer 128 (39) 89
518 (164) 354
On average, excluding directors, the Group employed 3 persons in the 2024 year
(31 December 2023: 7)
The highest paid director received remuneration of approximately £144,000 (31
December 2023: £224,000).
6. AUDITORS REMUNERATION
Year ended 31 Dec 2024 Year ended 31 Dec 2023
£'000
£'000
Fees payable to the Group's auditor for the audit of parent company and (35) (50)
consolidated financial statements
(35) (50)
7. FINANCE COSTS
Year ended 31 Dec 2024 Year ended 31
£'000 Dec 2023
£'000
Finance charge on leased assets - (3)
Interest on convertible loan (64) -
Finance costs (64) (3)
8. TAXATION
No liability to income taxes arise in the period.
The current tax for the year differs from the loss before tax at a standard
rate of corporation tax in the UK. A reconciliation of the tax charge is
detailed below:
Year ended 31 Dec 2024 Year ended 31 Dec 2023
£'000
£'000
The charge for year is made up as follows:
Corporation tax on the results for the year - -
A reconciliation of the tax charge appearing in the income statement to the
tax that would result from applying the standard rate of tax to the results
for the year is:
Loss per the financial statements (1,447) (3,120)
Tax credit at the weighted average of the standard rate of corporation tax in (362) (592)
UK of 25% - (31 Dec 2023: 25%)
Non-deductible
expenses 79 234
Current year losses for which no deferred tax asset is recognised (283) (358)
Income tax charge for the year - -
Deferred tax assets carried forward have not been recognised in the accounts
because there is currently insufficient evidence of the timing of suitable
future taxable profits against which they can be recovered. The accumulated
tax losses are estimated to amount to approximately £3.086m (31 Dec 2023:
£1.958m) and the carried forward deferred tax asset is estimated to amount to
approximately £0.770m.
No deferred tax assets in respect of tax losses have not been recognised in
the accounts because there is currently insufficient evidence of the timing of
suitable future taxable profits against which they can be recovered.
9. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is calculated by
dividing the profit or loss for the year by the weighted average number of
ordinary shares in issue during the period.
Year ended 31 Dec 2024 Year ended 31 Dec 2023
Loss for the year/period from continuing operations - £'000 (1,447) (3,120)
Weighted number of ordinary shares in issue 1,156,732,090 104,057,299
Basic earnings per share from continuing operations - pence (0.125) (3.00)
There is no difference between the diluted loss per share and the basic loss
per share presented. Share options and warrants could potentially dilute basic
earnings per share in the future but were not included in the calculation of
diluted earnings per share as they are anti-dilutive for the year presented.
10. INTANGIBLE ASSETS
Group and Company
£'000
Cost and carrying value - 1 January 2023 2,068
Additions -
Impairment -
At 31 December 2023 2,068
Additions 20
Impairment -
At 31 December 2024 2,088
In 2018, 22,500,000 shares were issued to founding director Victor Bolduev as
consideration for the ownership rights of multiple patents that were
transferred to the Group. Since the acquisition of the patents in 2018 the
Group has taken strides towards realising their commercial potential
particularly by implementing commercial royalty agreements.
The Group has continued to apply for patents in the 2024 year and has also
added key human resources to aid the monetisation of the patents in the Group.
The Directors believe that the combined knowledge embedded in the business
surrounding drug delivery systems and small molecule therapeutics for
substance use and mental health disorders between the Company and Awakn (Note
11) will enable the development of innovative therapeutics for the large
addressable market for trauma related mental health disorders in the US and
key international markets.
In line with International Accounting Standard 36 (IAS 36), the Directors have
undertaken a formal assessment of these intangible assets to discern whether
they are impaired.
The Directors have given due consideration to both financial and non-financial
indicators and believe that the overall intellectual property of the Group is
in a strong position. As a result they do not believe that any indicators of
impairment exist and hence have not processed any impairment in the accounts.
11. OTHER NON-CURRENT ASSESTS
Group and Company
Group Company
£'000 £'000
Cost and carrying value - 1 January 2023 13 -
Additions -
Impairment -
At 31 December 2023 13 -
Additions 300 300
Impairment (13) -
At 31 December 2024 300 300
In July 2024, the Company entered into partnership with Awakn Life Sciences
("Awakn"), a Canadian clinical stage biotechnology company developing
therapeutics for addiction and mental health, to co-develop a new generation
of therapeutics for the treatment of trauma related mental health disorders
such as Post-Traumatic Stress Disorder ("PTSD"), moving the Company into field
of biotechnology research and development of therapeutics for the treatment of
mental health conditions. The agreement included a £300,000 payment to Awakn
to assist with the continuation of various clinical trials.
12. LEASES
Group
31 Dec 2024 31 Dec 2023
£'000 £'000
Right-of-use assets
Motor vehicles - 39
- 39
Lease liabilities
Current - 12
Non-current - 22
- 34
Right of use assets
A reconciliation of the carrying amount of the right-of-use asset is as
follows:
31 Dec 2024 31 Dec 2023
£'000 £'000
Motor vehicles
Opening balance 39 27
Additions - 24
Amortisation - (12)
Disposal of subsidiary (39) -
- 39
Lease liabilities
A reconciliation of the carrying amount of the lease liabilities is as
follows:
31 Dec 2024 31 Dec 2023
£'000 £'000
Opening balance 34 22
Additions - 25
Finance charge - 3
Repayments - (16)
Disposal of subsidiary (34) -
- 34
13. PROPERTY, PLANT AND EQUIPMENT
Group
Leasehold improvements Plant & Equipment
£'000 £'000 Total
£'000
Cost
At 1 January 2023 89 937 1,026
Additions 15 201 216
Disposals - (27) (27)
Impairment (107) (1,117) (1,224)
Exchange impact 3 6 9
At 31 December 2023 - - -
Additions - - -
Disposals - - -
Impairment - - -
Exchange impact - - -
At 31 December 2024 - - -
Depreciation
At 1 January 2023 (29) (323) (352)
Charge for the period (11) (143) (154)
Disposals - 6 6
Impairment 40 463 503
Exchange impact - (3) (3)
At 31 December 2023 - - -
Charge for the year - - -
Disposals - - -
Impairment - - -
Exchange impact - - -
At 31 December 2024 - - -
Net book value at 31 December 2023 - - -
Net book value at 31 December 2024 - - -
14. INVENTORY
Group 31 Dec 2024 £'000 31 Dec 2023 £'000
Raw materials - 51
Finished goods - -
- 51
15. INVESTMENTS
Company
£'000
Cost and carrying value - 1 January 2023 1,304
Additions -
Impairment (1,304)
At 31 December 2023 -
At 31 December 2024 -
*Immaterial investment in Graft Polymer IP Limited & GraftBio Limited of
£1 each
Investments in subsidiary with a cost value of £1.304m (2023: £1.304m) and
accrued impairments of £1.304m (2023: £1.304m) related to the investment in
Graft Polymer D.o.o which was a wholly owned subsidiary operating out of
Slovenia. On 2 May 2024, the company disposed of this subsidiary for £1.
Company subsidiary undertakings
At year end the Group owned interests in the following subsidiary
undertakings, which are included in the consolidated financial statements:
Name Business Activity Country of Incorporation Registered Address Percentage Holding
Graft Polymer IP Limited Intellectual property England and Wales Eccleston Yards, 25 Eccleston Place, London, SW1W 9NF 100%
GRAFTBIO Limited Bio-Polymer development and production England and Wales Eccleston Yards, 25 Eccleston Place, London, SW1W 9NF 100%
16. TRADE AND OTHER RECEIVABLES
GROUP 31 Dec 2024 £'000 31 Dec 2023 £'000
Trade receivables - 65
Other taxes and social security 30 16
Prepayments 22 21
Other receivables 6 6
58 108
The carrying amounts of the Group's trade and other receivables are
denominated in the following currencies:
31 Dec 2024 £'000 31 Dec 2023 £'000
UK Pounds 57 30
Euros - 78
57 108
The Expected Credit Loss Model under IFRS 9 has not been applied to
receivables due to this being inappropriate for the above receivables.
COMPANY 31 Dec 2024 £'000 31 Dec 2023 £'000
Other taxes and social security 30 4
Prepayments 22 21
Other receivables 5 6
57 31
As at 31 December 2024 all trade and other receivables were fully performing
and hence no provision has been processed. Trade receivables have the
following aging:
31 Dec 2024 £'000 31 Dec 2023 £'000
Current 58 31
1 - 3 months - -
3 - 6 months - -
58 31
The Expected Credit Loss Model under IFRS 9 has not been applied to
receivables due to this being inappropriate for the above receivables.
17. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand and short term deposits held
with banks with a A-1+ rating. The carrying value of these approximates to
their fair value. Cash and cash equivalents included in the cash flow
statement comprise the following balance sheet amounts.
GROUP 31 Dec 2024 £'000 31 Dec 2023 £'000
Cash and cash equivalents 757 155
757 155
COMPANY 31 Dec 2024 £'000 31 Dec 2023 £'000
Cash and cash equivalents 757 12
757 12
18. TRADE AND OTHER PAYABLES
GROUP 31 Dec 2024 £'000 31 Dec 2023 £'000
Trade payables 83 159
Accruals 36 68
VAT payable - 22
119 249
COMPANY 31 Dec 2024 £'000 31 Dec 2023 £'000
Trade payables 83 66
Accruals 36 51
119 117
19. LOAN NOTE
31 Dec 2024 £'000 31 Dec 2023 £'000
Opening balance - -
Principal drawn down 200 -
Interest charged 64 -
Principal repaid (264) -
- -
On 15 March 2024, the Company entered into a £100,000 working capital loan
facility, which was subsequently increased by a further £100,000 in April
2024. The facility has been drawn down in full and attracts an interest rate
of 10% per month. The loan was repayable on demand, together with accumulated
interest which was settled in July 2024.
20. PROVISIONS
GROUP 31 Dec 2024 £'000 31 Dec 2023 £'000
HMRC obligations - 32
- 32
In the 2023 reporting year Directors and other senior management waived fees
owed to them with the intention of having shares issued at a later date.
Transactions such as these have the potential to attract payroll and other
taxes depending on the specific circumstances of the individual to which they
apply. Due to the timing and uncertainty the Company provided for them in the
2023 year and have been settled during the current year.
21. SHARE CAPITAL
Change in issued Share Capital and Share Premium:
Number of shares Share capital Share premium Total
Ordinary shares £'000 £'000 £'000
Balance at 1 January 2023 104,097,299 41 7,001 7,042
- - - -
Balance at 31 December 2023 104,097,299 41 7,001 7,042
Share issue at placing price of 0.6 pence 20,666,667 21 103 124
Share issue at placing price of 0.1 pence 1,800,000,000 1,800 - 1,800
Share issue on conversion of loan (1) 264,000,000 264 - 264
Share issue to settle outstanding fees (2) 59,666,667 60 299 359
Share issue to settle outstanding fees (3) 47,500,000 47 - 47
Share issue costs - - (41) (41)
Balance at 31 December 2024 2,295,930,633 2,233 7,362 9,595
(1) Shares issued as full repayment of working capital loan and accrued
interest (refer Note 19).
(2) Shares issued in satisfaction of fees owed to Directors as at 31 March 24
in connection to the July 2024 transaction.
(3) Shares issued to various directors and advisors in lieu of fees owed
The share premium represents the difference between the nominal value of the
shares issued and the actual amount subscribed less; the cost of issue of the
shares, the value of the bonus share issue, or any bonus warrant issue.
22. SHARE BASED PAYMENTS RESERVE
Company Group
£'000
£'000
At 31 December 2022 858 858
Employee options (1) 369 369
At 31 December 2023 1,227 1,227
LTIP options (2, 3) 22 22
Director warrants issued 295 295
At 31 December 2024 1,544 1,544
( )
(1) On 6 January 2022, 11,173,611 employee options were granted to a number of
employees within the Group. These options have different vesting conditions
based on performance milestones. The charge that relates to the 2023 year has
been brought to account above.
(2) On 30 July 2024, 10,000,000 LTIP options were granted to Directors. One
third of these options vest every year, beginning with one third vesting at
grant date.
(3) On 26 September 2024, 45,000,000 LTIP options were granted to Directors.
One third of these options vest every year, beginning with one third vesting
at grant date.
Warrants
As at 31 December 2024
Weighted average exercise price Number of warrants
Brought forward at 1 January 2024 22p 2,031,008
Granted in period 1p 10,333,333
Granted in period 0.6p 1,500,000
Granted in period 0.1p 294,500,000
Expired during period 22p (775,194)
Outstanding at 31 December 2024 0.2p 307,589,147
Exercisable at 31 December 2024 0.2p 307,589,147
The weighted average time to expiry of the warrants as at 31 December 2024 is
574 days.
The following table lists the Black Scholes inputs to the model used for
valuation of the warrants:
0.1p warrants 1p warrants 0.6p warrants
Dividend yield (%) 0% 0% 0%
Expected volatility (%) 100.6 - 142.1% 92.4% 92.4%
Risk-free interest rate (%) 4.17% 3.6% 3.6%
Time to maturity 2 - 3 years 2 years 2 years
Exercise price (£) 0.001 0.01 0.006
Share price at grant date (£) 0.001 0.006 0.006
Options
As at 31 December 2024
Weighted average exercise price Number of options
Brought forward at 1 January 2024 0.1p 11,000,000
Granted in period 0.1p 55,000,000
Expired in period 0.1p (11,000,000)
Outstanding at 31 December 2024 0.1p 55,000,000
Exercisable at 31 December 2024 0.1p 18,333,333
The weighted average time to expiry of the warrants as at 31 December 2024 is
987 days.
The following table lists the Black Scholes inputs to the model used for
valuation of the options:
0.1p options
Dividend yield (%) 0%
Expected volatility (%) 100.6%
Risk-free interest rate (%) 4.17%
Time to maturity 2 years
Exercise price (£) 0.001
Share price at grant date (£) 0.0022
23. BUSINESS COMBINATIONS
Discontinued operations
A discontinued operation is a component of the Group that has been disposed of
or classified as held for sale and that represents a separate major line of
business or geographical area of operation, is part of a single co-ordinated
plan to dispose of such a line of business or area of operations, or is a
subsidiary acquired exclusively with a view to resale. The results of
discontinued operations are presented separately on the face of the Statement
of Comprehensive Income.
The Board recently undertook a review of its business and operations, pursuant
to which it was decided that the Slovenian operation, Graft Polymer D.O.O
(principally, an industrial polymer products manufacturer), was considered no
longer commercially viable due to forecasted negative cashflow as a result of
falling sales and rising costs, with no immediate prospect of becoming
profitable in the short to medium term. The Group disposed of Graft Polymer
D.O.O on 2 May 2024. A gain on deconsolidation as at date of disposal of
£125,000 was recognised and taken to the Statement of Comprehensive Income.
Gain on deconsolidation of Graft Polymer D.O.O
2 May 2024
£'000
Consideration received
Cash -
Carrying amount of net liabilities sold 16
16
Reclassification of foreign exchange reserve 109
Gain on deconsolidation 125
Financial Performance for Graft Polymer D.O.O
Four months to 2 May 2024 31 December 2023
£'000 £'000
Revenue 221 587
Cost of sales (148) (329)
Gross profit 73 258
Operational costs (17) (66)
Depreciation (58) (179)
Administrative expenses (140) (518)
Asset write down - (838)
Operating loss (142) (1,343)
Finance costs (1) (3)
Loss before taxation (143) (1,346)
Income tax - -
Loss for the period from discontinuing operations (143) (1,346)
Assets and liabilities of Graft Polymer D.O.O
2 May 2024 31 December 2023
£'000 £'000
Non-current assets
Right of use assets 38 39
Other non-current assets 13 13
Total non-current assets 51 52
Current assets
Cash and cash equivalents 13 143
Trade and other receivables 44 78
Inventory 11 50
Total current assets 68 271
TOTAL ASSETS 119 323
Non-current liabilities
Lease liability - 22
Total non-current liabilities - 22
Current liabilities
Trade and other payables 71 132
Deferred income 36 93
Lease liability 28 12
Total current liabilities 135 237
Total liabilities 135 259
NET ASSETS (16) 64
Cashflow of Graft Polymer D.O.O
2 May 2024 31 December 2023
£'000 £'000
Cash flow from operating activities
Loss before tax (143) (1,346)
Adjustments for:
Depreciation 58 165
Finance expenses - 3
Amortisation of right of use assets - 12
Fixed asset write off (58) 736
Inventory write off - 117
Changes in working capital:
Decrease/(Increase) in trade and other receivables 33 (26)
(Decrease)/Increase is trade and other payables (54) 234
Movements in inventory 39 14
Net cash outflow from operating activities (125) (91)
Cash flow from investing activities
Purchase of property, plant and equipment - (216)
Repayment on right of use assets (4) (16)
Loans to subsidiary - 393
Net cash flow from investing activities (4) 161
Net increase in cash and cash equivalents (129) 70
Cash and cash equivalents at beginning of period 142 89
Foreign exchange effect on cash balance - (26)
Cash and cash equivalents at end of period 13 133
24. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
Capital Risk Management
The Company manages its capital to ensure that entities in the Group will be
able to continue as a going concern while maximising the return to
stakeholders. The overall strategy of the Company and the Group is to minimise
costs and liquidity risk while still executing on the Group's overall business
strategy.
The capital structure of the Group consists of equity attributable to equity
holders of the parent, comprising issued share capital, foreign exchange
reserves and retained earnings as disclosed in the Consolidated Statement of
Changes of Equity.
The Group is exposed to risk through its normal operations, the most
significant of which are foreign exchange and liquidity risks. Sensitivity
analysis has not been performed because the potential impact is not considered
material. The management of these risks is vested to the Board of Directors.
Currency Risk
The Group operates in a global market with cost 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 Companies'
functional currency. Currency exposures are reviewed regularly.
The Group has exposure to foreign exchange risk through research and
development expenditure that is incurred in international markets as well as
their foreign currency denominated cash balances.
Accordingly, movements in the Sterling exchange rate against these currencies
could have a detrimental effect on the Group's results and financial
condition. Such changes are not considered likely to have a material effect on
the Group's financial position at 31 December 2024. Funds of the parent
company are held with HSBC which has the following credit ratings (Fitch: A+,
Stable, Moody's A3, Stable, S&P A-, stable)
The table below shows the currency profiles of cash and cash equivalents:
31 Dec 2024 £'000 31 Dec 2023 £'000
Cash and cash equivalents
Sterling 757 12
Euro - 143
757 155
The table below shows an analysis of the currency of the monetary asset and
liabilities in Sterling being the functional currency of the Group:
31 Dec 2024 £'000 31 Dec 2023 £'000
Balance denominated in
Sterling - (27)
Euro - 50
- 23
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:
31 Dec 2024 £'000 31 Dec 2023 £'000
Cash and cash equivalents 757 155
757 155
The table below sets out the maturity profile of the financial liabilities at
31 December:
31 Dec 2024 £'000 31 Dec 2023 £'000
Due in less than one month (50) (34)
Due between one and three months (9) (93)
Due between three months and one year (24) (32)
(83) (159)
25. FINANCIAL ASSETS AND FINANCIAL LIABILITIES
GROUP Financial assets at amortised cost Financial liabilities at amortised cost Total
31 Dec 2024
Financial assets / (liabilities) £'000 £'000 £'000
Trade and other receivables(1) 36 - 36
Cash and cash equivalents 757 - 757
Trade and other payables(2) - (119) (119)
792 (119) 674
(1) Trade and other receivables excludes prepayments
(2) Trade and other payables excludes accruals, taxes and social security
GROUP Financial assets at amortised cost Financial liabilities at amortised cost Total
31 Dec 2023
Financial assets / (liabilities) £'000 £'000 £'000
Trade and other receivables(1) 87 - 87
Cash and cash equivalents 155 - 155
Trade and other payables(2) - (181) (181)
242 (181) 61
(1) Trade and other receivables excludes prepayments
(2) Trade and other payables excludes accruals, taxes and social security
COMPANY Financial assets at amortised cost Financial liabilities at amortised cost
31 Dec 2024 Total
Financial assets / (liabilities) £'000 £'000 £'000
Trade and other receivables(1) 36 - 36
Cash and cash equivalents 757 - 757
Trade and other payables(2) - (119) (119)
792 (119) 674
(1) Trade and other receivables excludes prepayments
(2) Trade and other payables excludes accruals, taxes and social security
COMPANY Financial assets at amortised cost Financial liabilities at amortised cost
31 Dec 2023 Total
Financial assets / (liabilities) £'000 £'000 £'000
Trade and other receivables(1) 10 - 10
Cash and cash equivalents 12 - 12
Trade and other payables(2) - (66) (66)
22 (66) (44)
(1) Trade and other receivables excludes prepayments
(2) Trade and other payables excludes accruals, taxes and social security
26. CAPITAL COMMITMENTS
There were no capital commitments at 31 December 2024.
27. CONTINGENT LIABILITIES
Other than above, there were no further contingent liabilities at 31 December
2024.
28. COMMITMENTS UNDER OPERATING LEASES
There were no commitments under operating leases at 31 December 2024.
29. RELATED PARTY TRANSACTIONS
Royalty Agreement with Argent Biopharma
Graft Polymer IP Limited has a royalty agreement in place with Argent
Biopharma Ltd (formerly MGC Pharmaceuticals D.o.o) to pay 1 Euro per unit sold
of their CimetrA & CannEpil-IL products. Mr Roby Zomer who resigned as a
Director from the Company in the year is also a Director of Argent Biopharma
Ltd.
Payments to Chitta Lu Limited
Post resignation, the Company engaged the consultancy services of Chitta Lu
Limited of which former Director, Roby Zomer is a Director in relation to
business development for the Group. During the period from his resignation on
15 March 2024 to year end, Mr Zomer accrued £59,000 of fees of £20,000 which
were outstanding at year end.
Collaboration agreement with Awakn Life Sciences Corp.
On 18 July 2024, the Company announced that it had entered into a
collaboration agreement with Awakn Life Sciences Corp ("Awakn"). The Company's
CEO, Mr. Anthony Tennyson, also serves as CEO of Awakn. To mitigate any
potential conflict of interest, Mr. Tennyson recused himself from the
Company's final selection process and negotiation of the Collaboration
Agreement, which was led by Nicholas Nelson.
Details of directors' emoluments are set out in the Directors Remuneration
Report
30. EVENTS SUBSEQUENT TO PERIOD END
General meeting and change of name
On 6 January 2025, the Company held a general meeting where it proposed and
subsequently approved a change of name from Graft Polymer (UK) Plc to Solvonis
Therapeutics Plc.
Entry into Arrangement Agreement
On 24 February 2025, entered into an arrangement agreement with Awakn Life
Sciences Corp. setting out the basis on which the parties will cooperate to
execute a transaction whereby Solvonis will acquire all issued and outstanding
common shares in the capital of Awakn all outstanding restricted share units
in the capital of Awakn and all outstanding deferred share units in the
capital of Awakn by way of a Court approved plan of arrangement under the
British Columbia Business Corporations Act.
Appointment of Non-Executive Director
On 11 March 2025, the Company appointed Dr Renata Crome to the Board of
Directors.
31. CONTROL
In the opinion of the Directors as at the year end and the date of these
financial statements there is no single ultimate controlling party.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR EAXLSFDNSEFARecent news on Solvonis Therapeutics
See all newsREG - Solvonis Therapeutic - Result of General Meeting
AnnouncementREG - Solvonis Therapeutic - Proposed acquisition of Awakn approved
AnnouncementREG - Solvonis Therapeutic - Final Results for the year ended 31 December 2024
AnnouncementREG - Solvonis Therapeutic - Posting of Circular and Notice of General Meeting
AnnouncementREG - Solvonis Therapeutic - Holding(s) in Company
Announcement