REG-Medcaw Investments Plc: Annual Financial Report
28/04/2023 15:45
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Medcaw Investments Plc
(“the Company”)
Final Results for the Year Ended 31 December 2022
Chairman’s Statement
It is my pleasure to submit the first Chairman’s Statement for the Company
covering the twelve-month period to 31 December 2022.
During the year, the Company completed its listing on the Standard Main Market
of the London Stock Exchange on 21 December 2022 having raised a total of
approximately £637,000 (before expenses).
The Company was formed to undertake one or more acquisitions of companies
operating in the life sciences sector, particularly those that are focused on
developing medical and/or wellness technologies and/or therapies with the aim
of enabling and delivering better health and longevity. Since admission to
trading on the London Stock Exchange, the Company has been active in reviewing
opportunities both within the life science sector and other suitable
opportunities in other sectors which have the potential to return real value
to shareholders.
The Board remains fully committed to finding a project of the appropriate
scale which will deliver value to shareholders in the long-term and we look
forward to updating shareholders as and when such an opportunity arises.
After the year end, the Company made some changes to its board of directors
with the appointment of Charles Wood and myself as non-executive directors,
replacing Dan Maling and Fungai Ndoro. I look forward to working with my
fellow directors in sourcing and completing a value enhancing transaction for
the Company in the near term and I would like to thank Daniel and Fungai for
their contribution whilst on the Board.
Charlie Wood is a highly experienced senior corporate finance executive with
wide ranging international and capital markets experience. Mr Wood is a
Partner of Orana Corporate LLP, a London based FCA regulated corporate
advisory and accounting practise working with innovative fast growth
companies. In addition, Mr Wood holds various non-executive directorships
in listed and private companies across natural resources, technology and FMCG.
I am Chairman and Non-Executive director of a number of private companies
which have engaged me principally to assist them with their growth strategies.
My early career started with the formation of three companies in IT
infrastructure and distribution, after which I moved into small company
broking and corporate work with Rathbone Stockbrokers Limited and Cheviot
Capital (Nominees) Limited. In 2003, I established Springtime Consultants Ltd
and have been acting as a consultant or Non-Executive Director to a number of
listed companies and SME ventures over the past 20 years.
I would like to thank our shareholders, my fellow directors and our colleagues
at Orana Corporate for their ongoing support.
Marcus Yeoman
Chairman
28 April 2023
Enquiries
Medcaw Investments Plc Marcus Yeoman Non-Executive Chairman +44 (0) 2039 188 797
Zeus Capital Alexandra Campbell-Harris +44(0) 20 3829 5000
STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 December 2022 13 month period ended 31 December 2021
Note £ £
Revenue - -
Administrative expenses 4 (194,006) (66,101)
Operating result (194,006) (66,101)
Finance income/(expense) - -
Loss before taxation (194,006) (66,101)
Income tax - -
Loss for the year and total comprehensive loss for the year (194,006) (66,101)
Basic and diluted loss per Ordinary Share (pence) 8 (1.90) (0.69)
The statement of comprehensive income has been prepared on the basis that all
operations are continuing operations.
STATEMENT OF FINANCIAL POSITION
As at 31 December 2022 As at 31 December 2021
Note £ £
ASSETS
Current assets
Other current assets 10 187,160 -
Cash and cash equivalents 9 643,872 200,499
Total assets 831,032 200,499
Liabilities
Current liabilities
Trade & other payables 11 240,709 32,000
Total liabilities 240,709 32,000
Net assets 590,323 168,499
EQUITY AND LIABILITIES
Equity attributable to owners
Ordinary share capital 12 171,320 97,500
Share premium 12 679,110 137,100
Accumulated losses (260,107) (66,101)
Total equity and liabilities 590,323 168,499
STATEMENT OF CHANGES IN EQUITY
Ordinary share capital Share premium Retained earnings Total equity
£ £ £ £
Comprehensive loss for the year
Loss for the year - - (66,101) (66,101)
Total comprehensive loss for the year - - (66,101) (66,101)
Transactions with owners
Ordinary shares issued on incorporation 50,000 - - 50,000
Ordinary shares issued during year 47,500 142,500 - 190,000
Share issue costs - (5,400) - (5,400)
Total transactions with owners 97,500 137,100 - 234,600
As at 31 December 2021 97,500 137,100 (66,101) 168,499
Comprehensive loss for the year
Loss for the year - - (194,006) (194,006)
Total comprehensive loss for the year - - (194,006) (194,006)
Transactions with owners
Ordinary shares issued during year 73,820 603,712 - 677,532
Share issue costs - (61,702) - (61,702)
Total transactions with owners 73,820 542,010 - 615,830
As at 31 December 2022 171,320 679,110 (260,107) 590,323
STATEMENT OF CASH FLOWS
Year ended 31 December 2022 13 month period ended 31 December 2021
£ £
Cash flows from operating activities
Loss before income tax (194,006) (66,101)
Adjustments for:
Share based payments 9,422 -
Adjustments for changes in working capital:
Increase in trade and other receivables - -
Increase in trade and other payables 152,675 32,000
Net cash used in operating activities (31,908) (34,101)
Cash flows from financing activities
Cash received from issue of Ordinary Shares 475,282 240,000
Share Issue Expenses - (5,400)
Net cash inflow from financing activities 475,282 234,600
Net increase in cash and cash equivalents 443,373 200,499
Cash and cash equivalents at beginning of year 200,499 -
Cash and cash equivalents at end of year 643,872 200,499
NOTES TO THE FINANCIAL STATEMENTS
1. General Information
The Company was incorporated on 11 December 2020 as a public company in
England and Wales with company number 13078596 under the Companies Act, 2006.
The address of its registered office is Eccleston Yards, 25 Eccleston Place
London SW1W 9NF United Kingdom.
The principal activity of the Company is to pursue one or more acquisitions.
The Company listed on the London Stock Exchange (“LSE”) on 21(ST) December
2022.
2. Accounting policies
The principal accounting policies applied in preparation of these financial
statements are set out below. These policies have been consistently applied
unless otherwise stated.
2.1 Basis of preparation
The principal accounting policies applied in the preparation of the Financial
Statements are set out below. These policies have been consistently applied to
the year presented, unless otherwise stated.
The Company Financial Statements have been prepared in accordance with
UK-adopted International Accounting Standards (‘IFRS’).
The Company Financial Statements are presented in £ unless otherwise stated.
The comparative figures that have been presented as the Company Financial
Statements covers the year from incorporation on 11(th) December 2020 until
31(st) December 2021.
2.2 Going concern
The financial statements have been prepared on a going concern basis, which
assumes that the Company will continue in operational existence for the
foreseeable future.
The Company has based the going concern assumption on the basis that no
investment or acquisition takes place during the forecast year, meaning the
entity has the ability to meet its working capital requirements from existing
cash. The existing cash, including the amounts raised during the successful
IPO on 21(st) December 2022, is sufficient to meet the working capital
requirements of the Company going forward when outgoings are reduced to only
committed costs. This includes applying mitigation measures to reduce the cost
base of the Company. As a result of this the directors believe that the going
concern assumption is appropriate.
Under the scenario that any proposed acquisition does take place the Company
will be able to secure additional funding to ensure that all future capital
commitments would be able to be satisfied.
Taking these matters into consideration, the Directors consider that the
continued adoption of the going concern basis is appropriate having reviewed
the forecasts for the coming 12 months from the date of signing and the
financial statements do not reflect any adjustments that would be required if
they were to be prepared other than on a going concern basis
2.3 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, and demand
deposits with banks and other financial institutions.
2.4 Equity
Share capital is determined using the nominal value of shares that have been
issued.
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.
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.
Retained losses includes all current and prior year results as disclosed in
the income statement.
2.5 Foreign currency translation
The financial statements are presented in Sterling which is the Company’s
functional and presentational currency.
Transactions in currencies other than the functional currency are recognised
at the rates of exchange on the dates of the transactions. At each reporting
date, monetary assets and liabilities are retranslated at the rates prevailing
at the balance sheet date with differences recognised in the Statement of
comprehensive income in the year in which they arise.
2.6 Financial instruments
IFRS 9 requires an entity to address the classification, measurement and
recognition of financial assets and liabilities.
a) Classification
The Company classifies its financial assets in the following measurement
categories:
· those to be measured subsequently at fair value (either through
OCI or through profit or loss);
· 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 Company’s business model for managing
the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will be recorded either
in profit or loss or in OCI. For investments in equity instruments that are
not held for trading, this will depend on whether the Company has made an
irrevocable election at the time of initial recognition to account for the
equity investment at fair value through other comprehensive income (FVOCI).
b) Recognition
Purchases and sales of financial assets are recognised on trade date (that
is, the date on which the Company commits to purchase or sell the asset).
Financial assets are derecognised when the rights to receive cash flows
from the financial assets have expired or have been transferred and the
Company has transferred substantially all the risks and rewards of
ownership.
c) Measurement
At initial recognition, the Company measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value through profit
or loss (FVPL), transaction costs that are directly attributable to the
acquisition of the financial asset.
Transaction costs of financial assets carried at FVPL are expensed in profit
or loss.
Debt instruments
Amortised cost: Assets that are held for collection of contractual cash flows,
where those cash flows represent solely payments of principal and interest,
are measured at amortised cost. Interest income from these financial
assets is included in finance income using the effective interest rate
method. Any gain or loss arising on derecognition is recognised directly in
profit or loss and presented in other gains/(losses) together with foreign
exchange gains and losses. Impairment losses are presented as a separate line
item in the statement of profit or loss.
d) Impairment
The Company assesses, on a forward-looking basis, the expected credit losses
associated with any debt instruments carried at amortised cost.
The impairment methodology applied depends on whether there has been a
significant increase in credit risk. For trade receivables, the Company
applies the simplified approach permitted by IFRS 9, which requires expected
lifetime losses to be recognised from initial recognition of the receivables.
2.7 Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received
net of any direct issue costs.
2.8 Taxation
Tax currently payable is based on taxable profit for the year. 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.
2.9 Critical accounting judgements and key sources of
estimation uncertainty
The preparation of the financial statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets,
liabilities, income and expense. Actual results may differ from these
estimates. Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the year in which
the estimates are revised and in any future years affected.
Cost of new shares and cost of listing
The cost of new shares issued is deducted from share premium while the cost of
the Initial Public Offering is recorded as administrative expense. In arriving
at the split of the common costs a rational and appropriate basis has been
applied in order to estimate the allocation.
2.10 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):
· Amendments to IAS 1: Presentation of Financial Statements –
Classification of Liabilities as Current or Non-current (effective date not
yet confirmed)*
· Amendments to IAS 8: Accounting Policies, Changes to Accounting
Estimates and Errors (effective date not yet confirmed)*
The effect of these new and amended Standards and Interpretations which are in
issue but not yet mandatorily effective is not expected to be material.
The directors are evaluating the impact that these standards may have on the
financial statements of Company.
3. Segmental analysis
The Company manages its operations in one segment, being seeking a suitable
investment. The results of this segment are regularly reviewed by the board as
a basis for the allocation of resources, in conjunction with individual
investment appraisals, and to assess its performance.
4. Operating Loss
Operating loss for the company is stated after charging:
Year ended 31 December 2022 Year ending 31 December 2021£
Directors’ fees
Professional Fees (Legal & accounting)
Listing expenses
Other administrative expenses
66,101
5. Directors’ and Employees
The average number of persons employed by the Company (including executive
directors) during the year year ended 31 December 2022 was:
No of employees
3
The aggregate payroll costs of these persons were as follows:
Wages and salaries
2,454
Year ended 31 December 2022 £
Fees to non-executive directors 2,454
Bonus -
2,454
Directors did not accrue any salary until the completion of the admission to
the London Stock Exchange which occurred on 21(st) December 2022.
For the year ended 31 December 2021:
No of employees
1
The aggregate payroll costs of these persons were as follows:
Wages and salaries
-
Year ended 31 December 2021 £
Fees to non-executive directors -
Bonus -
Share based payment charge -
-
6. Auditor’s Remuneration
Year ending 31 December 2022 Year ending 31 December 2021
Fees payable to the Company’s auditor for the audit of the Company
Corporate Finance Fees
13,800
7. Taxation
As at 31 December 2022 £ As at 31 December 2021£
A reconciliation of the tax charge / credit 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 accounts (194,006) (66,101)
Tax credit at the standard rate of corporation tax in the UK of 19% (36,861) (12,559)
Adjustment for items disallowable for tax - -
Tax losses for which no deferred tax is recognised 36,861 12,559
Tax expense recognised in accounts - -
The Company has total carried forward losses of £260,107. The taxed value of
the unrecognised deferred tax asset is £49,420 and these losses do not
expire. No deferred tax assets in respect of tax losses have 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.
8. 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 year.
31 December 2022 31 December 2021
£ £
Loss attributable to shareholders of Medcaw Investments Plc (194,006) (66,101)
Weighted number of ordinary shares in issue 10,236,324 9,589,610
Basic & dilutive earnings per share from continuing operations - pence (1.90) (0.69)
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.
See note 13 for further details.
9. Cash and cash equivalents
As at 31 December 2022 As at 31 December 2021
Cash at bank
200,499
10. Trade and other receivables
As at 31 December 2022 As at 31 December 2021
IPO Funds
-
11. Trade and other payables
As at 31 December 2022 As at 31 December 2021
Trade payables
Other current liabilities
32,000
12. Share capital and share premium
Ordinary Shares Share Capital Share Premium Total
£ £ £
Issue of ordinary shares on incorporation 5,000,000 50,000 - 50,000
Issue of ordinary shares 4,750,000 47,500 142,500 190,000
Share issue costs - - (5,400) (5,400)
At 31 December 2021 9,750,000 97,500 137,100 234,600
Issue of ordinary shares (1) 1,011,275 10,113 30,338 40,451
IPO shares (2) 6,370,820 63,707 573,374 637,081
Share issue costs - - (61,702) (61,702)
At 31 December 2022 17,132,095 171,320 679,110 850,430
(1) On 9(th) May 2022 and 10(th) November 2022 the company issued 1,011,275
Ordinary Shares at a subscription price of £0.04 in connection with the seed
round of fundraising.
(2) On admission to the Standard List of the LSE on 21(st) December 2022,
6,370,820 shares were issued at a placing price of £0.10
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.
The Company has only one class of share. All ordinary shares have equal voting
rights and rank pari passu for the distribution of dividends and repayment of
capital.
13. Warrants
The below warrants were granted in the current year. The warrants are outside
the scope of IFRS 2 and have not been valued.
Warrants
As at 31 December 2022
Weighted average exercise price Number of warrants
Brought forward at 1 January 2022 - -
Granted in year 4p 4,000,000
Vested in year 4p 4,000,000
Outstanding at 31 December 2022 4p 4,000,000
Exercisable at 31 December 2022 4p 4,000,000
The weighted average time to expiry of the warrants as at 31 December 2022 is
1.98 years.
14. Financial Instruments and Risk Management
Principal financial instruments
The principal financial instruments used by the Company from which the
financial risk arises are as follows:
31 December 2022 31 December 2021
£
Financial Assets
Cash and cash equivalents 643,872 -
Trade and other receivables 187,160 200,499
831,032 200,499
Financial Liabilities
Trade and other payables 240,709 32,000
240,709 32,000
The financial liabilities are payable within one year.
General objectives and policies
Per the Directors report the overall objective of the Board is to set policies
that seek to reduce risk as far as practical without unduly affecting the
Company’s competitiveness and flexibility. Further details regarding these
policies are:
Policy on financial risk management
The Company’s principal financial instruments comprise cash and cash
equivalents, other receivables, trade and other payables. The Company’s
accounting policies and methods adopted, including the criteria for
recognition, the basis on which income and expenses are recognised in respect
of each class of financial asset, financial liability and equity instrument
are set out in note 2 – “Accounting Policies”.
The Company does not use financial instruments for speculative purposes. The
carrying value of all financial assets and liabilities approximates to their
fair value.
Derivatives, financial instruments and risk management
The Company does not use derivative instruments or other financial instruments
to manage its exposure to fluctuations in foreign currency exchange rates,
interest rates and commodity prices.
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Company.
The Company has adopted a policy of only dealing with creditworthy
counterparties. The Company’s exposure and the credit ratings of its
counterparties are monitored by the Board of Directors to ensure that the
aggregate value of transactions is spread amongst approved counterparties.
The Company applies IFRS 9 to measure expected credit losses for receivables,
these are regularly monitored and assessed. Receivables are subject to an
expected credit loss provision when it is probable that amounts outstanding
are not recoverable as set out in the accounting policy. The impact of
expected credit losses was immaterial.
The Company’s principal financial assets are cash and cash equivalents. Cash
equivalents include amounts held on deposit with financial institutions.
The credit risk on liquid funds held in current accounts and available on
demand is limited because the Company’s counterparties are banks with high
credit-ratings assigned by international credit-rating agencies.
No financial assets have indicators of impairment.
The Company’s maximum exposure to credit risk is limited to the carrying
amount of financial assets recorded in the financial statements.
Borrowings and interest rate risk
The Company currently has no borrowings. The Company’s principal financial
assets are cash and cash equivalents. Cash equivalents include amounts held on
deposit with financial institutions. The effect of variable interest rates is
not significant.
Liquidity risk
During the 31 December 2022, the Company was financed by cash raised through
equity funding. Funds raised surplus to immediate requirements are held as
cash deposits in Sterling.
In managing liquidity risk, the main objective of the Company is to ensure
that it has the ability to pay all of its liabilities as they fall due. The
Company monitors its levels of working capital to ensure that it can meet its
liabilities as they fall due.
The table below shows the undiscounted cash flows on the Company’s financial
liabilities as at 31 December 2022 on the basis of their earliest possible
contractual maturity.
Total £ Within 2 months Within 2-6 months
At 31 December 2022
Trade payables 203,256
Accruals 37,454
Capital management
The Company considers its capital to be equal to the sum of its total equity.
The Company monitors its capital using a number of key performance indicators
including cash flow projections, working capital ratios, the cost to achieve
development milestones and potential revenue from partnerships and ongoing
licensing activities.
The Company’s objective when managing its capital is to ensure it obtains
sufficient funding for continuing as a going concern. The Company funds its
capital requirements through the issue of new shares to investors.
15. Financial assets and liabilities
Financial assets at amortised cost Financial liabilities at amortised cost Total
£ £ £
2022
Cash and cash equivalents 219,974 - 219,974
Trade and other receivables 187,159 - 643,872
Trade and other payables - (230,710) (230,710)
831,031 (230,710) 633,136
16. Related Party Transactions
Warrants issued to Directors and Director related entities
On 13 December 2020, Sarah Cope, Daniel Maling & Charlie Wood were each
granted warrants with an exercise price of £0.04 and vesting upon the
successful IPO on the LSE on 21 December 2022. A summary of the warrants are
below:
Sarah Cope 140,800
Daniel Maling 140,800
Charlie Wood 844,000
Provision of services
During the year £12,670 was incurred for the provision of administrative and
corporate accounting services from Orana Corporate LLP of which Charles Wood,
Sarah Cope and Dan Maling are both directors or past directors of the Company
and Partners of Orana Corporate LLP. These transactions have been treated at
arm’s length and processed at the fair market value of services provided.
Other than these there were no other related party transactions.
17. Ultimate Controlling Party
As at 31 December 2022, there was no ultimate controlling party of the
Company.
18. Capital Commitments
As at 31 December 22 there were no capital commitments for the Company.
19. Events Subsequent to year end
On 3(rd) March 2023 the Company announced that it has appointed Mr Charles
Ainslie (“Charlie”) Wood and Marcus Yeoman as Non-executive Directors of
the Company with immediate effect, furthermore Daniel Maling and Fungai Ndoro
have stepped down from the Board of the Company to focus on other projects.
All director fees will be deferred until a suitable transaction has been
completed.
Between 14(th) and 16(th) March 2023 Marcus Yeoman, a non-executive Director,
acquired an additional 95,908 shares in the Company. Following the
transactions Marcus has 126,0808 shares in the Company.
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