REG - Roquefort Theraptcs. - Annual Report & Financial Statements - 31 Dec 2023
26/04/2024 07:00
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RNS Number : 1217M Roquefort Therapeutics PLC 26 April 2024
26 April 2024
Roquefort Therapeutics plc
("Roquefort Therapeutics" or the "Company")
Annual Report & Financial Statements - 31 Dec 2023
Roquefort Therapeutics plc (LSE:ROQ, OTCQB:ROQAF), the Main Market listed
biotech company focused on developing first in class medicines in the high
value and high growth oncology market, announces its audited results for year
ended 31 December 2023.
Copies of the Annual Report and Financial Statements will be made available on
the Company's website at: https://www.roquefortplc.com/results-centre
(https://www.roquefortplc.com/results-centre)
Highlights
· Signed exclusive worldwide license agreement (excluding Japan) with
Randox Laboratories for 10 years to utilise Midkine antibodies in medical
diagnostics
o Highly synergetic - deal will accelerate ability to diagnose patients and
therefore reduce time and costs when it reaches clinical trials
· Formed a Scientific Advisory Board to help drive drug development
programs forward, comprised of experienced Professors Jo Martin, Trevor Jones
and Armand Keating
· Continued pre-clinical development with encouraging positive results
for all five novel patent protected pre-clinical anti-cancer medicines
· Cash at year end 31 December 2023 of £537,322
Pre-clinical highlights
· Created a new novel family of mRNA therapeutics consisting of four
mRNA therapeutics targeting Midkine. Achieved positive in vivo results in
anti-cancer mRNA therapeutic in breast and liver cancer where the studies
demonstrated a statistically significant reduction in both cancer growth and
migration
· Midkine antibody programs, targeting metastatic breast cancer and
metastatic lung cancer, successfully demonstrated in vivo safety. In addition,
the Company released its first in vivo results for an osteosarcoma orphan drug
indication, which has an accelerated development pathway and the potential for
market exclusivity
· Anti-cancer Midkine RNA oligonucleotide program targeting Midkine
expressing cancers showed further pre-clinical progress having produced
>90% in vitro efficacy in human liver and neuroblastoma cancer cells
· Strengthened IP position in siRNA therapeutics with a new patent
filing. Developed four siRNA sequences to strengthen portfolio. Sequences
developed in combination with a Nano particle delivery system to target high
mortality cancers including colon and breast
· MK Cell program reached a significant milestone when tested in
combination with Natural Killer ("NK") cells - activation of NK cells produced
up to a two-fold increase in cytotoxicity over NK cells alone in three
difficult to treat cancers: ovarian cancer, acute myeloid leukaemia and
multiple myeloma
Post Period End Highlights
· Continued the development of novel STAT-6 medicines in validated in
vitro models of colon cancer with the results demonstrating efficacy of the
four new siRNA sequences in reducing STAT-6 expression by 40-50%
· Further progress in mRNA by combining with a LNP delivery system in a
validated in vivo model of liver cancer and demonstrated the safety and
efficacy in reducing functional Midkine of the novel mRNA LNP combination
· Continued studies in validated models of NK cell activation and
cytotoxicity and demonstrated an anti-cancer effect in leukaemia. This
efficacy was superior to NK cells alone confirming that the MK Cells activate
NK cells
Outlook
· The significant pre-clinical development achievements have put the
Company in a position to open various out licencing discussions with big
pharma as well as a private equity fund across the US, EU and Japan, where
talks are ongoing
· Favourable market conditions remain with big pharma set for a large
revenue shortfall owing to patent expirations and a need for new blockbuster
medicines
· Focus is to secure at least one out licencing therapeutics deal and
the potential to prepare at least one program for a phase 1 clinical study
Commenting on the Annual Results, Chief Executive Officer, Ajan Reginald said:
"In 2023 we delivered on our strategy by meeting our pre-clinical milestones
and significantly advancing our entire portfolio. We also strengthened the
portfolio with additional patents by creating a new novel family of mRNA
therapeutics, which is a highly attractive new field of medicine.
"We demonstrated the Company's deal making ability by signing our first
licence agreement with Randox Laboratories in the medical diagnostics field
and are pleased with its continued progress. We remain highly focused on, and
are progressing, the key commercial goal to secure one or more therapeutic
out-licencing transactions."
Enquiries:
Roquefort Therapeutics plc
Stephen West (Chairman) / Ajan Reginald (CEO) +44 (0)20 3290 9339
Hybridan LLP (Joint Broker)
Claire Louise Noyce +44 (0)203 764 2341
Optiva Securities Limited (Joint Broker)
Christian Dennis +44 (0)20 3411 1881
Buchanan (Public Relations)
Jamie Hooper / Ben Romney / George Beale +44 (0)20 7466 5000
LEI: 254900P4SISIWOR9RH34
CHAIRMAN'S STATEMENT
I am pleased to report Roquefort Therapeutics' audited financial statements
and strategic progress to shareholders for the year ended 31 December 2023.
During the period the Company continued to progress its corporate strategy,
which is to identify the next generation of medicines for the most difficult
to treat cancers with a high mortality rate, develop medicines in-house and
with academic partners through the pre-clinical phase to clinical trial
readiness and IND filing stage before licensing or sale to big pharma.
Diagnostic Licencing Agreement
2023 started with significant momentum, with the Group's Midkine antibody
program, targeting metastatic breast cancer and metastatic lung cancer,
successfully demonstrating in vivo safety in pre-clinical development programs
carried out by leading cancer research groups. Notably in February, Roquefort
Therapeutics validated Midkine as a target by signing a Licence and Royalty
Agreement with Randox Laboratories ("Randox") in relation to the Group's
Midkine antibody portfolio. In FY23 the Company received an upfront
non-refundable payment of £200,000, with further milestone payments expected
in 2024 and royalty payments expected to commence in 2025. Randox is
developing a diagnostic to identify patients with cancers that overexpress
Midkine which is highly synergistic with Roquefort Therapeutics' development
of first-in-class cancer medicines. Roquefort Therapeutics and Randox are also
collaborating in research programs to identify new diagnostics for Midkine
overexpressed cancers that may be treatable with the Company's Midkine
therapeutics.
To help drive drug development programs forward, in March 2023, the Company
formed a Scientific Advisory Board, working closely with Chief Scientific
Officer Professor Sir Martin Evans. The Scientific Advisory Board is comprised
of experienced Professors Jo Martin, Trevor Jones and Armand Keating, who
together are a team of researchers, biopharmaceutical innovators and
clinicians with an emphasis on linking pre-clinical research, clinical trials,
production of medicines and the care of patients. The Company is utilising
their drug development expertise to complete pre-clinical development to reach
key milestones and realise the value of the IP retained within the Company's
portfolio, either via licensing transactions or a clinical program sale.
Pre-clinical Development
The Roquefort Therapeutics portfolio consists of novel patent protected
pre-clinical anti-cancer medicines, consisting of five best in class
medicines:
· Midkine antibodies with significant in vivo efficacy and toxicology
studies, and orphan drug indication;
· Midkine RNA oligonucleotide therapeutics with novel anti-cancer
gene editing action;
· Midkine mRNA therapeutics targeting solid tumours;
· STAT-6 siRNA therapeutics targeting solid tumours with significant
in vivo efficacy; and
· MK cell therapy with direct and Natural Killer cell-mediated
anti-cancer action.
The Company continued the encouraging pre-clinical development seen in 2022
throughout 2023. In June we completed with our research partners, the Olivia
Newton John Cancer Research Institute and Hawkins Laboratory at La Trobe
University, Melbourne, the first in vivo efficacy results for our anti-Midkine
patented antibodies CAB-101 (ROQA2) and CAB-102 (ROQA1). The in vivo efficacy
study tested the anti-cancer killing ability of CAB-101 and CAB-102 in a
validated experimental model of osteosarcoma, a third indication. Treatment
with CAB-101 was found to produce a statistically significant reduction in
lung metastasis, and CAB-102 was found to reduce proliferation of the primary
tumour. Osteosarcoma is our third indication in the anti-Midkine antibody
program and our first orphan drug indication.
Osteosarcoma is the Company's first orphan drug indication and reflects the
strategic decision to target cancer niches in which there remains a high unmet
clinical need, an accelerated development pathway and the potential to offer a
best-in-class treatment in a significant market niche. There are commercial
benefits to an orphan drug indication such as market exclusivity for 7 years
in the USA and up to 10 years in the UK and EU, tax credits for the clinical
drug testing cost and fee reductions.
In March 2023 we announced that Roquefort Therapeutics had enhanced the
portfolio with the creation of a new novel family of mRNA Therapeutics. This
new platform of mRNA therapeutics was developed within budget internally and
consists of four mRNA pre-clinical therapeutics targeting Roquefort
Therapeutics' novel Midkine target. In June we achieved positive in vivo
results in our anti-cancer mRNA therapeutic in breast and liver cancer, where
the studies demonstrated a statistically significant reduction in both cancer
growth and migration. We further consolidated our leadership position in the
Midkine field by updating our filed patents to protect the mRNA compositions
and methods. The Company is particularly excited about this program because
the mRNA cancer market is a highly attractive new field of medicine (~$31
billion, 7.8% CAGR) and is led by Pfizer, Moderna and BioNTech. Roquefort
Therapeutics is well positioned in this field, with four mRNA sequences that
uniquely target Midkine. The Company completed in vivo studies in March 2024
with positive results (refer Post Period End section for further details).
In June 2023, our anti-cancer Midkine RNA oligonucleotide program targeting
Midkine expressing cancers showed further pre-clinical progress having
produced >90% in vitro efficacy in human liver and neuroblastoma cancer
cells. The studies were conducted with the Company's strategic research
partnerships at the Faculty of Medicine and Health at the University of Sydney
and the Immune Oncology Laboratory at the School of Biomedical Sciences,
University of New South Wales. The Company believes liver cancer to be an
attractive market niche with the global liver cancer drug market estimated at
US$2.4 billion in 2022 and is projected to reach US$9.3 billion by 2030, at a
CAGR of 18.6% according to the market research firm Research And Markets in
February 2023.
The achievements of 2023 have enabled Roquefort Therapeutics to develop a
highly synergistic approach to the target, Midkine. Our proprietary
combination of RNA oligonucleotides attacks a different Midkine region versus
our antibodies and mRNA, and this diversity of targeting regions may be
helpful in developing mono or combination therapies going forward, which has
potential commercial appeal.
Following the acquisition of Oncogeni in September 2022, which pivoted
Roquefort Therapeutics into a material oncology group, the Company acquired
two families of innovative cell and RNA oncology medicines, both in
pre-clinical development, Mesodermal Killer ("MK") cells and small interfering
RNA ("siRNA") therapeutics. Both programs saw progress during 2023.
In August 2023, Roquefort Therapeutics announced the development of new novel
siRNA therapeutics and strengthened the IP position with a new patent filing
for the novel anti-cancer siRNA therapeutics. Professor Graham Robertson, Vice
President of Drug Discovery developed four additional siRNA sequences to
complement the existing siRNA portfolio. These sequences are being developed
in combination with nano-particle delivery systems to target the
hard-to-treat, high mortality solid cancers including colon and breast cancer.
In March 2024 we announced that in validated in vitro models of colon cancer,
results demonstrated efficacy in four new siRNA sequences in reducing STAT-6
expression by 40-50% (refer Post Period End section). The Company is
encouraged by the commercial potential of its siRNA targets STAT-6 and SH2,
following Sanofi's (NASDAQ: SNY) licencing transaction with Recludix which
included a US$125 million upfront payment, and total deal of up to US$ 1.2
billion for a pre-clinical program targeting STAT-6 and SH2. Roquefort
Therapeutics is particularly encouraged by this as our siRNA programs are also
in pre-clinical development and target STAT-6 and the SH2 domain and have
shown significant in vitro anti-cancer activity.
The Company announced in November 2023 that its proprietary novel MK cell
program reached a significant preclinical milestone during the period. MK
cells were tested in combination with Natural Killer cells ("NK cells"). The
activation of NK cells produced up to a two-fold increase in cytotoxicity over
NK cells alone in three difficult to treat cancers: ovarian cancer, acute
myeloid leukaemia and multiple myeloma. The Company believes this
demonstration of the activation of NK cells in multiple cancers is a
significant milestone because the NK cell activation is a highly attractive
modality for large pharmaceutical companies. Recent transactions in this
promising market include the $1.4 billion partnership between Sanofi and
Innate Pharma announced in December 2022 and >$300 million Gilead and
Dragonfly Therapeutics transaction in May 2022 for Dragonfly's proprietary
activators of NK cells. The Company's MK cells progressed into further in vivo
studies in validated models of NK cell activation and cancer cytotoxicity with
positive results announced in February 2024 (refer Post Period End section for
further details).
Out-Licencing Discussions (Therapeutics)
In line with our strategy, the Company commenced confidential out-licencing
discussions with potential partners in 2023, including large pharmaceuticals
companies and a specialist private equity fund. The programs and jurisdictions
being negotiated include the Midkine antibodies and STAT-6 siRNA programs, and
relate to licences for the US, Europe and Japan markets.
Post Period End
During the first quarter of 2024 the Company made further progress across its
pre-clinical drug development program with positive results reported for the
MK cell therapy program (February 2024) and the Midkine mRNA and STAT-6 siRNA
programs (March 2024):
· MK Cell Therapy: the Company continued studies in validated models
of NK cell activation and cytotoxicity and demonstrated an anti-cancer effect
in leukaemia. This efficacy was superior to NK cells alone confirming that the
MK cells activate NK cells. NK cell activation is a new field with high
commercial potential in which large pharmaceutical partners completed
significant deals in 2022 and 2023;
· Midkine mRNA: the latest experiments combined the mRNA with a LNP
delivery system in a validated in vivo model of liver cancer and demonstrated
the safety and efficacy in reducing functional Midkine of the novel mRNA LNP
combination. This represents a significant milestone in both the discovery of
a novel mRNA therapeutic and in the safe combination with an LNP to allow for
the delivery of the mRNA as an anti-cancer medicine; and
· STAT-6 siRNA: the Company continued the development of its novel
STAT-6 medicines in validated in vitro models of colon cancer with the results
demonstrating efficacy of the four new siRNA sequences in reducing STAT-6
expression by 40-50%.
The Company continued to engage in confidential out-licencing discussions with
potential partners and the Company will make an announcement should a binding
agreement be reached with one or more partners.
Strategy & Outlook
Through the material strategic progress delivered over the course of FY2023,
Roquefort Therapeutics is looking to build on its successful pre-clinical
development of its five pre-clinical programs to deliver at least one
out-licencing transaction during 2024. We believe that during 2023 we have
delivered on our strategy to select and acquire novel medicines and to develop
them to reach significant milestones, and to a level that attracts interest
from potential licencing partners.
Roquefort Therapeutics is well positioned in this market to create shareholder
value by securing a licencing deal, with newly validated targets (like STAT-6
and Midkine) novel modalities (like siRNA, mRNA and cell therapy) garnering
high deal values because they offer the potential to create first-in-class
medicines which have a greater likelihood of generating blockbuster
(multi-billion dollar) revenues. Our strategy fits this paradigm, whereby we
create significant value by discovering these first-in-class medicines before
the market recognises them and enhance their value with targeted R&D to
optimise the appeal to Big Pharma. Our portfolio has interest from Big Pharma
and private equity, and in line with our strategy, we remain in discussions
with these potential partners.
The Chairman's Statement should be read as part of the Strategic Report.
Stephen West, Executive Chairman
25 April 2024
DIRECTORS' REPORT
The Directors present their report with the audited financial statements of
Roquefort Therapeutics plc ("the Company") and its subsidiaries Lyramid Pty
Limited ("Lyramid"), Oncogeni Ltd ("Oncogeni") and Tumorkine Pty Limited
("Tumorkine") (together "the Group") for the year ended 31 December 2023. A
commentary on the business for the year is included in the Chairman's
Statement. A review of the business is also included in the Strategic Report.
The Company's Ordinary Shares are listed on the London Stock Exchange, on the
Official List pursuant to Chapter 14 of the Listing Rules, which sets out the
requirements for Standard Listings.
Directors
The Directors of the Company during the year and their beneficial interest in
the Ordinary shares of the Company at 31 December 2023 were as follows:
Director Position Appointed Ordinary Warrants
shares
Stephen West1 Executive Chairman 17/08/2020 5,616,501 7,000,000
Ajan Reginald Chief Executive Officer 16/09/2022 11,663,051 -
Sir Martin Evans Chief Scientific Officer 16/09/2022 - -
Dr Michael Stein Non-Executive Director 22/03/2021 - 2,000,000
Ms Jean Duvall Non-Executive Director 05/04/2022 - 300,000
Dr Simon Sinclair2 Non-Executive Director 20/04/2022 96,336 300,000
Dr Darrin Disley Non-Executive Director 16/09/2022 1,495,901 -
(1) 4,628,485 Ordinary shares and 7,000,000 warrants held by Cresthaven
Investments Pty Ltd ATF The Bellini Trust (a Company related to Stephen West)
(2) 300,000 warrants held by Livingstone Investment Holdings Ltd; and 60,415
Ordinary shares were held by Simon Sinclair direct
Qualifying Third Party Indemnity Provision
At the date of this report, the Company has a third-party indemnity policy in
place for all Directors.
Substantial shareholders
As at 31 December 2023, the total number of issued Ordinary Shares with voting
rights in the Company was 129,149,998. Details of the Company's capital
structure and voting rights are set out in note 19 to the financial
statements.
The Company has been notified of the following interests of 3 per cent or more
in its issued share capital as at the date of approval of this report.
Number of % of
Party Name Ordinary Shares Share Capital
Ajan Reginald 11,663,051 9.00%
Abdelatif Lachab 7,750,000 6.00%
Jane Whiddon1 7,300,000 5.65%
M Sheikh 5,744,870 4.45%
Stephen West2 5,616,501 4.35%
Provelmare Holding Ltd 5,000,000 3.87%
Z Sheikh 4,018,910 3.11%
M Rollins 4,000,000 3.10%
K Fallon 3,905,215 3.02%
(1) 2,500,000 shares held by MIMO Strategies Pty Ltd (ATF the MIMO Trust);
4,100,000 shares held by 6466 Investments Pty Ltd; 700,000 shares held by
Nautical Holdings WA Pty Ltd - all of which are entities controlled by J
Whiddon
(2) 4,628,485 shares held by Cresthaven Investments Pty Ltd ATF the Bellini
Trust (a Company related to Stephen West)
Financial instruments
Details of the Company's financial risk management objectives and policies as
well as exposure to financial risk are contained in the accounting policies
and note 22 of the financial statements.
Greenhouse Gas (GHG) Emissions
The Group is aware that it needs to measure its operational carbon footprint
in order to limit and control its environmental impact. However, due to its
operational footprint being limited to a laboratory leased from September 2022
to 31 December 2023, consuming less than 40,000 kWh of energy, the Group is
currently exempt from GHG reporting requirements.
In the future, the Group will only measure the impact of its direct
activities, as the full impact of the entire supply chain of its suppliers
cannot be measured practically.
TCFD Disclosure
The Group operated a leased lab facility from October 2022 until the agreement
expired in December 2023. From this point the Group outsourced laboratory work
and does not intend to lease another facility in 2024. The Group will
therefore begin to consider its impact on the environment and the risks it
faces from climate change, for the first time during 2024 and expects to
develop its sustainability plans over a 5 year period, commensurate with the
size of its operations. Climate change was not considered a principal risk or
uncertainty for the year ended 31 December 2023.
In line with the requirements of the Financial Conduct Authority's Listing
Rule 14.3.27R, and for the above reasons, we note that we have not made the
disclosures, in respect of the financial year ended 31 December 2023, in line
with the recommendations and recommended disclosures of the TCFD.
Dividends
The Directors do not propose a dividend in respect of the year ended 31
December 2023.
Research and development, Future developments and events subsequent to the
year end
Further details of the Company's research and development, future developments
and events subsequent to the year-end are set out in the Strategic Report.
Research and development costs incurred for the year ended 31 December 2023
were £620,159 (2022: £319,315).
Corporate Governance
The Governance Report forms part of the Director's Report.
Going Concern
The Directors have prepared financial forecasts to estimate the likely cash
requirements of the Group over the period to 30 June 2025, given its stage of
development and lack of recurring revenues. In preparing these financial
forecasts, the Directors have made certain assumptions with regards to the
timing and amount of future expenditure over which they have control. The
Directors have considered the sensitivity of the financial forecasts to
changes in key assumptions, including, among others, potential cost overruns
within committed spend, ability to raise new funding and changes in exchange
rates.
The Group's available resources are sufficient to cover the Group's plans to
complete existing pre-clinical development activities during 2024, however,
they are not sufficient to cover existing committed costs and the costs of
planned activities for at least 12 months from the date of signing these
consolidated and company financial statements.
The Directors plan to raise further funds during 2024 (either through
licencing deals and/or other financing arrangements) and have reasonable
expectations that sufficient cash will be raised (either through licencing
deals and/or other financing arrangements) to fund the planned operations of
the Group for a period of at least 12 months from the date of approval of
these financial statements. The funding requirement indicates that a material
uncertainty exists which may cast significant doubt over the Group's and
Company's ability to continue as a going concern, and therefore its ability to
realise its assets and discharge its liabilities in the normal course of
business.
After due consideration of these forecasts, current cash resources, including
the sensitivity of key inputs and success in raising new funding 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. The financial
statements do not include the adjustments that would be required should the
going concern basis of preparation no longer be appropriate.
Principal Activities
The Company's principal activity in the reporting period was the pre-clinical
development of next generation medicines focused on hard-to treat cancers.
Auditors
On 23 November 2023, BDO LLP resigned as the Group's auditors and confirmed
that there were no circumstances connected with their resignation which they
considered should be brought to the attention of the Company's members or
creditors in accordance with Section 519 of the Companies Act 2006.
On 23 November 2023 it was announced that the Company had appointed RPG Crouch
Chapman LLP as its auditors with immediate effect. The appointment of RPG
Crouch Chapman LLP will be subject to approval by shareholders at the next
Annual General Meeting of the Company.
Statement of Directors' responsibilities
The Directors are responsible for preparing the Annual Report alongside the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have prepared the financial
statements in accordance with UK adopted International Accounting Standards.
Under company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Company and of the profit or loss of the Company for that year.
The Directors are also required to prepare financial statements in accordance
with the rules of the London Stock Exchange for companies with a Standard
Listing.
In preparing these financial statements, the Directors are required to:
· Select suitable accounting policies and then apply them
consistently;
· Make judgements and accounting estimates that are reasonable and
prudent;
· State whether applicable UK adopted International Accounting
Standards have been followed, subject to any material departures disclosed and
explained in the financial statements; and
· Prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements and the Remuneration
Committee Report comply with the Companies Act 2006. They are also responsible
for safeguarding the assets of the Company and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities. They
are also responsible to make a statement that they consider that the annual
report and accounts, taken as a whole, is fair, balanced, and understandable
and provides the information necessary for the shareholders to assess the
Company's position and performance, business model and strategy.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of the financial statements may differ from legislation in other
jurisdictions.
Statement of Directors' responsibilities pursuant to Disclosure and
Transparency Rules
Each of the Directors confirm that, to the best of their knowledge and belief:
· the financial statements prepared in accordance with UK adopted
International Accounting Standards, give a true and fair view of the assets,
liabilities, financial position and loss of the Group and Company; and
· the Annual Report and financial statements, including the Strategic
Report, includes a fair review of the development and performance of the
business and the position of the Group and Company, together with a
description of the principal risks and uncertainties that they face.
Disclosure of Information to Auditors
So far as the Directors are aware, there is no relevant audit information of
which the Company's auditors are unaware, and each Director has taken all the
steps that they ought to have taken as a Director in order to make themselves
aware of any relevant audit information and to establish that the Company's
auditors are aware of that information.
This directors' report was approved by the Board of Directors on 25 April 2024
and is signed on its behalf by Stephen West, Executive Chairman
STRATEGIC REPORT
The Directors present the Strategic Report of the Company and the Group for
the year ended 31 December 2023.
Section 172(1) Statement - Promotion of the Company for the benefit of the
members as a whole
The Directors believe they have acted in the way most likely to promote the
success of the Company for the benefit of its members as a whole, as required
by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
· Consider the likely consequences of any decision in the long term;
· Act fairly between the members of the Company;
· Maintain a reputation for high standards of business conduct;
· Consider the interests of the Company's employees;
· Foster the Company's relationships with suppliers, customers and
others; and
· Consider the impact of the Company's operations on the community
and the environment.
We aim to work responsibly with our stakeholders, including suppliers. The key
Board decisions made in the year and post year end are set out below:
Significant events / decisions Key s172 matter(s) affected Actions and Consequences
Entering into a licence Shareholders and Business The Group entered into a
agreement with Randox Relationships material sales contract with Randox to licence out its technology for
diagnostics. The agreement is intended to generate another revenue stream from
diagnostics
for the Group.
Portfolio optimisation Shareholders and Business Relationships The Group constantly monitors the commercial viability of its programmes to
ensure that the optimum mix is carried forward.
Interests of Employees
The Company's Governance Report sets out (under board responsibilities) the
processes in place to safeguard the interests of employees.
Foster business relationships with suppliers, joint venture partners and
others
Potential suppliers and joint venture partners are considered in the light of
their suitability to comply with the Company's policies.
Impact of operations on the community and environment
The Company will continue to monitor the future impact of any new potential
research facilities on the community and environment.
Maintain a reputation for high standards of business conduct
The Governance Report sets out the Board and Committee structures and Board
and Committee meetings held during the year, together with the experience of
executive management and the Board and the Company's policies and procedures.
Act fairly between members of the Company
The Board takes feedback from a wide range of shareholders (large and small)
and endeavours at every opportunity to pro-actively engage with all
shareholders (via regulatory news reporting-RNS) and engage with any specific
shareholders in response to particular queries they may have from time to
time. The Board considers that its key decisions during the year have impacted
equally on all members of the Company.
Review of Business in the Year
Operational Review
The Company's principal activity is set out in the Directors' Report.
During the year, the Company continued to progress its novel patent protected
pre-clinical anti-cancer medicines through a combination of partnerships with
leading academic cancer research centres and at the Company's state of the art
laboratory in Stratford-upon-Avon.
In February 2023, Roquefort Therapeutics validated Midkine as a target by
signing a Licence and Royalty Agreement with Randox Laboratories ("Randox") in
relation to the Group's Midkine antibody portfolio. In FY23 the Company
received an upfront payment of £200,000, with further milestone payments
expected in 2024 and royalty payments expected to commence in 2025. Randox is
developing a diagnostic to identify patients with cancers that overexpress
Midkine which is highly synergistic with Roquefort Therapeutics' development
of first-in-class cancer medicines.
During 2023, the Group completed pre-clinical development programs with the
following leading academic cancer research centres:
· Olivia Newton-John Cancer Research Institute, La Trobe University,
Melbourne
o Breast cancer metastasis antibody programs: in vivo safety was successfully
demonstrated in January 2023.
· Lowy Cancer Research Centre, University of New South Wales
o Liver and Colorectal cancer Midkine RNA and STAT-6 siRNA programs: the in
vitro Midkine RNA oligonucleotide study confirmed in June 2023 that the
Company's novel anti-sense oligonucleotides produced a novel non-functional
Midkine protein that has been shown to produce >90% in vitro efficacy (at
the mRNA level) in human liver cancer and neuroblastoma cancer cells.
· Hawkins Laboratory Biochemistry and Genetics, La Trobe University,
Melbourne
o Lung cancer metastasis antibody programs: in vivo safety was successfully
demonstrated in January 2023, and in vivo efficacy results were released in
June 2023 which showed a statistically significant reduction in lung
metastasis, and a reduced proliferation (growth rate) of the primary tumour.
The efficacy study was carried out in a validated experimental model of
osteosarcoma.
· School of Medical Sciences, University of Sydney
o Midkine RNA programs: in June 2023 a proprietary combination of the
Company's Midkine RNA oligonucleotides demonstrated in vitro efficacy in
hepatocellular carcinoma (HCC) liver cancer cells producing a significant
reduction in full length Midkine and generated a novel non-functional Midkine.
In March 2023 the Company announced the successful development of a new novel
platform of anti-cancer mRNA therapeutics, being the Company's fifth program
and the third in its Midkine family. In June 2023 the Company successfully
completed in vitro studies for the anti-cancer mRNA therapeutic in breast and
liver cancer. The studies demonstrated a statistically significant reduction
in both proliferation (cancer growth) and migration.
In August 2023 the Company announced the successful development of new siRNA
sequences and new patent filing for its family of novel anti-cancer siRNA
therapeutics. The new siRNA sequences expanded the Company's portfolio of
siRNA medicines that attack the targets STAT-6 (Signal Transducer and
Activator of Transcription) and its SH2 (Src-homology-2) domain.
During the year the Company tested its MK cells in combination with natural
killer ("NK") cells with positive results, announced in November 2023,
showing: (1) the activation of NK cells; and (2) that this activation produced
up to a two-fold increase in cytotoxicity over NK cells alone in three
different difficult to treat cancers, which was statistically significant.
Events since the year end
There have been no significant events subsequent to 31 December 2023.
Financial review
Results for the year to 31 December 2023
The Consolidated Statement of Comprehensive Income for the year shows a loss
of £1,744,540 (2022: loss of £1,615,417) and the Consolidated Statement of
Financial Position at 31 December 2023 shows net equity of £5,499,543 (2022:
£7,206,636) for the Group.
The total comprehensive loss for the year of £1,717,495 (2022: loss of
£1,630,406) occurred as a result of on-going research and development costs
and administrative expenses required to operate the Company.
The Group generated £200,000 (2022: £0) in revenue from an exclusive licence
and royalty agreement, for its technology to be used in medical diagnostics.
The revenue was recorded under IFRS 15 in which Group recognised milestone
revenue upon the completion of certain milestones. The initial amount
represents the £200,000 non-refundable deposit with the remainder of the
revenue to be received subject to certain commercial and technical milestones.
Administrative expenses increased to £1,499,193 (2022: £1,306,561) mainly
due to Directors' and employee costs increasing to £1,087,947 (2022:
£573,538), consulting and professional fees increasing to £217,876 (2022:
£209,768) reflecting an increase in staff and operational activities during
the year. Research and development expenditure increased to £620,159 (2022:
£319,315) as the Group carried out external studies with the University of
Western Sydney for the Midkine RNA oligonucleotide pre-clinical program in the
first half of the year and commenced internal and external studies on the
other programs later in the year.
Cash flow
Net cash outflow for the Group for 2023 was £1,786,164 (2022: £1,421,258
inflow).
Net cash used in investing activities for 2023 decreased to £52,573 (2022:
£103,478). In 2023 this activity was for the purchase of fixed assets,
whereas the 2022 figure relates to the acquisition of Oncogeni Ltd. There were
no business acquisitions in the current year.
Net cash used in financing activities for 2023 was £58 (2022: £3,121,202
inflow). The 2022 figure reflects the receipt of proceeds from an equity
placement undertaken in December 2022 for the acquisition of Oncogeni Ltd.
There were no fundraising events in the current year.
Closing cash
As at 31 December 2023, the Group held £537,322 (2022: £2,322,974) of cash.
Key Performance Indicators
The Company's non-financial KPIs are positive R&D results within the
existing pre-clinical portfolio, the development of new novel anti-cancer
therapeutics, the registration of new patents to protect the clinical
advancements in anti-cancer therapeutics being achieved during the
pre-clinical stages of drug discovery and entering into licencing deals with
other companies.
The Company's financial KPIs are the Company's cash runway and budgeted
R&D spend compared to actuals.
Position of Company's Business
At the year end
At the year end the Company's Statement of Financial Position shows net assets
totalling £5,981,627 (2022: £7,481,379). It is likely the Company will need
to raise further funds (either through licencing deals and/or other financing
arrangements) to cover its plans to complete existing pre-clinical development
activities and complete licencing negotiations. As at reporting date the
Directors are confident in their ability to raise further funds either through
licencing deals and/or other financing arrangements.
Environmental matters
The Board contains personnel with a good history of running businesses that
have been compliant with all relevant laws and regulations and there have been
no instances of non-compliance in respect of environmental matters.
Employee information
As at the date of this report, the Company has an Executive Chairman, two
Executive Directors and four Non-Executive Directors. The Company is committed
to gender equality and, as future roles are identified, a wide-ranging search
would be completed with the most appropriate individual being appointed
irrespective of gender.
A split of our employees and directors by gender at the date of this report,
is shown below:
Male Female
Directors 6 1
Employees 1 1
Total employees (including directors) 7 2
Social/Community/Human rights matters
The Company ensures that employment practices take into account the necessary
diversity requirements and compliance with all employment laws. The Board has
experience in dealing with such issues and sufficient training and
qualifications to ensure they meet all requirements.
Anti-corruption and anti-bribery policy
The government of the United Kingdom has issued guidelines setting out
appropriate procedures for companies to follow to ensure that they are
compliant with the UK Bribery Act 2010. The Company has conducted a review
into its operational procedures to consider the impact of the Bribery Act 2010
and the Board has adopted an anti- corruption and anti-bribery policy.
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.
Issue Risk/Uncertainty Mitigation
The Group is not breakeven and there is no guarantee that it will generate The generation of revenues is difficult to predict and there is no guarantee The CEO actively manages the commercial activities of the Group as it
significant profits in the near future that the Group will generate significant revenues in the foreseeable future. develops.
The Group will face risks frequently encountered by pre-revenue businesses The CEO and the Directors oversee the progress of the development of the
looking to bring new products to the market. There is also no guarantee that Group's research programs and associated technologies and ensure funding is in
the intellectual property held will ultimately result in a commercially viable place to support the necessary trials and further development steps as these
product. It is also possible that technical and/or regulatory hurdles could come on stream.
lengthen the time required for the delivery of such a product.
The Group's future growth will also depend on its ability to secure
commercialisation partnerships on appropriate terms, to manage growth and to
expand and improve operational, financial and management information, quality
control systems and its commercialisation function on a timely basis, whilst
at the same time maintaining effective cost controls.
Research and development risks carry technical risks, including the programs All therapeutic research and development programs carry technical risks, The Directors engage in continuous dialogue with the CEO and senior scientific
undertaken by the Group and there is no guarantee that these technical risks including the programs undertaken by the Group. These risks include: those staff to critically review the technical risks. The Board has established a
can be effectively overcome, and a successful, approved product can be associated with delays in development of effective and potent drugs; failure Scientific Advisory Board to support them in this review process.
developed of delivery by third party suppliers of research services or materials
essential to the programs; and outcomes of clinical testing. There is no
guarantee that these technical risks can be effectively overcome, and a
successful, approved product can be developed. Furthermore, the Group is
pursuing relatively new drug classes. Whilst several examples of approved
drugs now exist in these classes, as yet no such drug has been developed for
the Group's targets. There is a risk that these novel classes of drugs may not
be an effective way of modulating the target's expression to exert appropriate
clinical benefit in the target conditions.
Biotechnology programs are subject to the most Key regulatory focus areas are safety and efficacy, and future clinical trials The Scientific Advisory Board will be critical in supporting the Board in
stringent regulatory oversight by various conducted by the Group may be suspended or abandoned entirely in the event understanding and mitigating these risks. Even so, a sudden unforeseen change
government agencies and ethics committees and there is no guarantee that the that regulatory agencies consider that continuation of these trials could in the regulations could have a material adverse impact on the development
proposed development work will result in an efficacious treatment, or even if expose participants to undue risks. Before obtaining regulatory approval of a program.
it does, that the drug will be approved by regulatory authorities product for a target indication, substantial evidence must be gathered in
controlled clinical trials that the product candidate is safe and effective The Group cannot guarantee that the proposed development work will result in
for use for that clinical setting. Similar approvals must be obtained from the an efficacious treatment, or even if it does, that the drug will be approved
relevant regulatory authorities in each country in which the product may be by regulatory authorities.
made available, including Australia, US and the EU.
Even where the Group is successful in terms of technical and regulatory There may be other companies developing effective treatments for the same The CEO and certain Board members have extensive experience in developing
approvals, there is no guarantee it will be successful in securing an conditions as the Group, which could make commercialising any drug more products to pre-IND and completing licencing deals. The Board is in continuous
appropriate licensing deal or in achieving alternative means of difficult. The research and development programs planned are expected to take dialogue with the CEO regarding ongoing licencing discussions.
commercialising its drugs several years before any drug might be ready and the market for such drugs may
contract significantly or become too competitive for an economically viable
drug launch. In addition, even post regulatory approval, any drug may need to
be withdrawn from the market, as well as expose the Group to claims for
compensation as a result of serious adverse events associated with the
treatment. Historically, very few drugs make it from discovery to regulatory
approval and commercialisation.
Existing patents and licences are subject to the terms and conditions of the The Group's subsidiary Lyramid Pty Ltd operates its Midkine antibody research The CEO has a good understanding of the details of the licence agreements and
relevant licence agreement which could be terminated for non-compliance with and development programs under a worldwide, licence agreement with Anagenics the Group's obligations under them. Should any areas of concern arise, legal
the terms of such licence agreement Ltd, the owner of the Midkine patents. Similarly, the Group's subsidiary counsel will be sought before further steps are taken.
Oncogeni Ltd operates its MK Cell and siRNA programs under worldwide licencing
agreements with Cell Therapy Limited and Sirna Limited respectively. Whilst
the Group is currently compliant, there is a risk that the rights to these
patents, as defined by the relevant licence agreement, will be forfeited by
virtue of either party failing to meet licence conditions.
The Group's ability to compete will depend in part, upon the successful Filing, prosecuting and defending patents in all countries throughout the The Group seeks to protect its intellectual property through the filing of
protection of its intellectual property, in particular its patents and world would be prohibitively expensive. It is possible that competitors will patent applications, as well as robust confidentiality obligations on its
know-how use the technologies in jurisdictions where the Group has not registered employees.
patents.
The Board intends to defend the Group's intellectual property vigorously,
where necessary through litigation and other means.
The successful operation of the Group will depend partly upon the performance The loss of the services of certain of these members of the Group's key The CEO and Executive Chairman hold shares in the Company representing 9% and
and expertise of its current and future management and employeesz management, including Ajan Reginald, the CEO, or the inability to identify, 4.3% respectively of the issued capital. In addition, the Group offers
attract and retain a sufficient number of suitably skilled and qualified incentives to Directors and employees through share warrants, which makes them
employees may have a material adverse effect on the Group. Any future linked to the long-term success of the business.
expansion of the Group may require considerable management time which may in
turn inhibit management's ability to conduct the day to day business of the
Group.
The further operations of the Group will depend on its ability to raise Pre-revenue companies are dependent on their ability to raise additional funds The CEO and Chairman have extensive experience in both the capital markets and
further funds through either equity markets or licence revenue deals or generate profits in the future to continue operations. Bio-technology sector and are confident in their abilities to raise additional
fundings or revenue.
Composition of the Board
A full analysis of the Board, its function, composition and policies, is
included in the Governance Report.
Capital Structure
The Company's capital consists of ordinary shares which rank pari passu in all
respects which are traded on the Standard segment of the Main Market of the
London Stock Exchange. There are no restrictions on the transfer of securities
in the Company or restrictions on voting rights and none of the Company's
shares are owned or controlled by employee share schemes. There are no
arrangements in place between shareholders that are known to the Company that
may restrict voting rights, restrict the transfer of securities, result in the
appointment or replacement of Directors, amend the Company's Articles of
Association or restrict the powers of the Company's Directors, including in
relation to the issuing or buying back by the Company of its shares or any
significant agreements to which the Company is a party that take effect after
or terminate upon, a change of control of the Company following a takeover bid
or arrangements between the Company and its Directors or employees providing
for compensation for loss of office or employment (whether through
resignation, purported redundancy or otherwise) that may occur because of a
takeover bid.
Approved by the Board on 25 April 2024
Stephen West, Executive Chairman
Consolidated Statement of Comprehensive Income
Year ended Year ended
31 December 31 December 2022
2023
Note £ £
Revenue 7 200,000 -
Other income - -
Administrative expenses 9 (1,499,193) (1,306,561)
Share based payments - directors and senior managers 9 (10,402) (8,427)
Research and development expenditure 9 (620,159) (319,315)
Operating loss & loss before, interest, taxation & depreciation (1,929,754) (1,634,303)
Interest receivable 1,469 -
Interest payable (58) -
Depreciation 14 (3,890) -
Loss for the year before taxation (1,932,233) (1,634,303)
Taxation 10 187,693 18,886
Loss for the year (1,744,540) (1,615,417)
Other comprehensive income (loss) 8 27,045 (14,989)
Total comprehensive loss for the period attributable to equity holders of the (1,717,495) (1,630,406)
parent
Loss per share (basic and diluted) attributable to the equity holders (pence) 8 (1.35) (1.56)
The notes to the financial statements form an integral part of these financial
statements.
Consolidated Statement of Financial Position
Note As at As at
31 December 31 December 2022
2023 £
£
Assets
Non-current assets
Property, Plant & Equipment 14 50,152 -
Intangible assets 12 5,343,505 5,343,505
Total non-current assets 5,393,657 5,343,505
Current assets
Trade and other receivables 15 157,589 101,738
Cash and cash equivalents 16 537,322 2,322,974
Total current assets 694,911 2,424,712
Total assets 6,088,568 7,768,217
Equity and liabilities
Equity attributable to shareholders
Share capital 19 1,291,500 1,291,500
Share premium 19 4,403,094 4,403,094
Share based payments reserve 20 385,537 375,135
Merger relief reserve 21 3,700,000 3,700,000
Retained deficit (4,293,268) (2,548,728)
Currency translation reserve 8 12,680 (14,365)
Total equity 5,499,543 7,206,636
Liabilities
Non-Current liabilities
Deferred tax liabilities 18 281,911 281,911
Current liabilities
Trade and other payables 17 307,114 279,670
Total liabilities 589,025 561,581
Total equity and liabilities 6,088,568 7,768,217
The notes to the financial statements form an integral part of these financial
statements.
COMPANY Statement of Financial Position
Note As at 31 As at 31 December
2022
December
£
2023
£
Assets
Non-current assets
Property, Plant & Equipment 14 50,152 -
Investments 13 4,874,774 4,874,774
Intercompany receivables 812,951 451,622
Total non-current assets 5,737,877 5,326,396
Current assets
Trade and other receivables 15 124,988 64,309
Cash and cash equivalents 16 301,674 2,274,478
Total current assets 426,662 2,338,787
Total assets 6,164,539 7,665,183
Equity and liabilities
Equity attributable to shareholders
Share capital 19 1,291,500 1,291,500
Share premium 19 4,403,094 4,403,094
Share based payments reserve 20 385,537 375,135
Merger relief reserve (1) 21 3,700,000 3,700,000
Retained deficit (3,798,504) (2,288,350)
Total equity 5,981,627 7,481,379
Liabilities
Current liabilities
Trade and other payables 17 182,912 183,804
Total liabilities 182,912 183,804
Total equity and liabilities 6,164,539 7,665,183
The notes to the financial statements form an integral part of these financial
statements.
The Company has taken advantage of section 408 of the Companies Act 2006 and
consequently a profit and loss account has not been presented for the Company.
The Company's loss for the financial period was £1,510,524 (2022: loss of
£1,287,740).
Consolidated Statement of Changes in Equity
Ordinary Share capital Share Premium Share Based Payment Reserve Merger Retained earnings Translation Reserve Total
Relief equity
reserve
£ £ £ £ £ £ £
As at 31 December 2021 719,000 3,460,595 366,708 450,000 (914,321) 624 4,082,606
Loss for the year - - - - (1,615,417) - (1,615,417)
Exchange differences - - - - - (14,989) (14,989)
Total comprehensive loss for the year - - - - (1,615,417) (14,989) (1,630,406)
Transactions with owners
Ordinary shares issued 572,500 942,499 - 3,250,000 - - 4,764,999
Stamp duty on share issue (18,990) (18,990)
Warrants charge - - 8,427 - - - 8,427
Total transactions with owners
572,500 942,499 8,427 3,250,000 (18,990) - 4,754,436
As at 31 December 2022 1,291,500 4,403,094 375,135 3,700,000 (2,548,728) (14,365) 7,206,636
Loss for the year - - - - (1,744,540) - (1,744,540)
Exchange differences - - - - - 27,045 27,045
Total comprehensive income / (loss) for the year
- - - - (1,744,540) 27,045 (1,717,495)
Transactions with owners
Ordinary shares issued - - - - - - -
Warrants charge - - 10,402 - - - 10,402
Total transactions with owners
- - 10,402 - - - 10,402
As at 31 December 2023 1,291,500 4,403,094 385,537 3,700,000 (4,293,268) 12,680 5,499,543
The notes to the financial statements form an integral part of these financial
statements.
COMPANY Statement of Changes in Equity
Ordinary Share capital Share Premium Merger relief reserve Share Based Payment Reserve Retained earnings Total equity
£ £ £ £ £ £
As at 31 December 2021 719,000 3,460,595 450,000 366,708 (981,620) 4,014,683
Loss for the year - - - - (1,287,740) (1,287,740)
Total loss for the year - - - - (1,287,740) (1,287,740)
Transactions with owners
Ordinary Shares issued 572,500 942,499 3,250,000 - - 4,764,999
Stamp duty on share issue (18,990) (18,990)
Warrants issued - - - 8,427 - 8,427
Total transactions with owners
572,500 942,499 3,250,000 8,427 (18,990) 4,754,436
As at 31 December 2022 1,291,500 4,403,094 3,700,000 375,135 (2,288,350) 7,481,379
Loss for the year - - - - (1,510,154) (1,510,154)
Total loss for the year - - - - (1,510,154) (1,510,154)
Transactions with owners - - - - - -
Ordinary Shares issued
Share-based payments - - - 10,402 - 10,402
Total transactions with owners - - - 10,402 - 10,402
As at 31 December 2023 1,291,500 4,403,094 3,700,000 385,537 (3,798,504) 5,981,627
The notes to the financial statements form an integral part of these financial
statements.
Consolidated Statement of Cash Flow
Note Year ended 31 December 2023 Year ended 31 December 2022
£ £
Cash flow from operating activities
Loss before income tax (1,932,233) (1,634,303)
Adjustments for:
Foreign Exchange 26,533 (9,918)
Share based payment 20 10,402 8,427
Depreciation 14 3,890 -
Taxation 10 187,693 18,886
Interest income (1,469) -
Interest expense 58 -
Changes in working capital:
Increase in trade and other receivables (55,851) (20,318)
Increase in trade and other payables 27,444 59,750
Net cash used in operating activities (1,733,533) (1,577,476)
Cash flow from Investing activities
Purchase of Property, Plant & Equipment (54,042) -
Acquisition of subsidiary, net of cash acquired - (103,478)
Interest received 1,469 -
Net Cash used in investing activities (52,573) (103,478)
Cash flows from financing activities
Proceeds from the issue of ordinary shares 19 - 3,121,202
Share issue costs 19 - (18,990)
Interest paid (58) -
Net cash (used in)/generated from financing activities (58) 3,102,212
Net (decrease)/increase in cash and cash equivalents (1,786,164) 1,421,258
Cash and cash equivalents at the beginning of the period 2,322,974 899,721
Foreign exchange impact on cash 512 1,995
Cash and cash equivalents at the end of the period 16 537,322 2,322,974
COMPANY Statement of Cash Flow
Note Year ended 31 December 2023 Year ended 31 December 2022
£ £
Cash flow from operating activities
Loss before income tax (1,546,488) (1,287,740)
Adjustments for:
Non-cash adjustment
Depreciation 14 3,890 -
Share based payment 20 10,402 8,427
Taxation 36,334 -
Changes in working capital:
Increase in trade and other receivables (60,678) (34,288)
Increase in trade and other payables (892) 56,153
Net cash used in operating activities (1,557,432) (1,257,448)
Cash flow from Investing activities
Purchase of Property, Plant & Equipment 14 (54,042) -
Acquisition of subsidiary - (109,079)
Borrowings to subsidiaries (361,330) (318,822)
Net Cash used in investing activities (415,372) (427,901)
Cash flows from financing activities
Proceeds from the issue of ordinary shares 19 - 3,121,202
Share issue costs 19 - (18,990)
Net Cash from financing activities - 3,102,212
Net (decrease)/increase in cash and cash equivalents (1,972,804) 1,416,863
Cash and cash equivalents at the beginning of the period 2,274,478 857,614
Foreign exchange impact on cash - -
Cash and cash equivalents at the end of the period 16 301,674 2,274,477
( )
The notes to the financial statements form an integral part of these financial
statements.
Notes to the Financial Statements
1. General Information
Roquefort Therapeutics plc, the Group's ultimate parent company, was
incorporated on 17 August 2020 as a public company limited by shares in
England and Wales with company number 12819145 under the Companies Act.
The address of its registered office is 85 Great Portland Street, First Floor,
London W1W 7LT, United Kingdom.
The principal activity of the Company is to develop pre-clinical next
generation medicines focused on hard-to- treat cancers.
The Company listed on the London Stock Exchange ("LSE") on 22 March 2021.
The consolidated financial statements of the Group have been prepared in
accordance with UK adopted International Accounting Standards as issued by the
International Accounting Standards Board (IASB) and endorsed by the UK
Endorsement Board. They have been prepared under the assumption that the Group
operates on a going concern basis.
2. New Standards and Interpretations
New and revised accounting standards adopted for the year ended 31 December 2023 did not have any material impact on the Group's accounting policies. There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the Group has decided not to adopt early.
The following amendments are effective for the period beginning 1 January 2023:
· IFRS 17 Insurance Contracts;
· Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements);
· Definition of Accounting Estimates (Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors);
· Deferred Tax related to Assets and Liabilities arising from a single transaction (Amendments to IAS 12 Income taxes); and
· International Tax Reform - Pilar Two Model Rules (Amendment to AS 12 Income Taxes) (effective immediately upon the issue of the amendments and retrospectively).
The following amendments are effective for the period beginning 1 January 2024:
· IFRS 16 Leases (Amendment - Liability in a Sale and Leaseback);
· IAS 1 Presentation of Financial Statements (Amendment - Classification of Liabilities as Current or Non-current) with Covenants; and
· Amendment to IAS 7 and IFRS 7 - Supplier finance;
The following amendments are effective for the period beginning 1 January 2025:
· Lack of Exchangeability (Amendments to IAS 21 The effects of changes in foreign exchange rates)
The Group is currently assessing the impact of these new accounting standards and amendments. The Group does not believe that the amendments to IAS 1 will have a significant impact on the classification of its liabilities. The Group does not expect any other standards issued by the IASB, but not yet effective, to have a material impact on the Group.
3. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these
financial statements are set out below. These policies have been consistently
applied to all the period presented, unless otherwise stated.
a) Basis of Preparation
The financial statements of Roquefort Therapeutics plc have been prepared in
accordance with UK adopted International Accounting Standards, and the
Companies Act 2006.
The financial statements have been prepared on an accrual basis and under the
historical cost convention.
b) Going Concern
The Directors have prepared financial forecasts to estimate the likely cash
requirements of the Group over the period to 30 June 2025, given its stage of
development and lack of recurring revenues. In preparing these financial
forecasts, the Directors have made certain assumptions with regards to the
timing and amount of future expenditure over which they have control. The
Directors have considered the sensitivity of the financial forecasts to
changes in key assumptions, including, among others, potential cost overruns
within committed spend and changes in exchange rates.
The Group's available resources are sufficient to cover the Group's plans to
complete existing pre-clinical development activities during 2024, however,
they are not sufficient to cover existing committed costs and the costs of
planned activities for at least 12 months from the date of signing these
consolidated and company financial statements.
The Directors plan to raise further funds during 2024 (either through
licencing deals and/or other financing arrangements) and have reasonable
expectations that sufficient cash will be raised (either through licencing
deals and/or other financing arrangements) to fund the planned operations of
the Group for a period of at least 12 months from the date of approval of
these financial statements. The funding requirement indicates that a material
uncertainty exists which may cast significant doubt over the Group's and
Company's ability to continue as a going concern, and therefore its ability to
realise its assets and discharge its liabilities in the normal course of
business.
After due consideration of these forecasts, current cash resources, including
the sensitivity of key inputs and success in raising new funding 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. The financial
statements do not include the adjustments that would be required should the
going concern basis of preparation no longer be appropriate.
c) Basis of Consolidation
The Group's financial statements consolidate those of the parent company and
its subsidiaries as of 31 December 2023. Lyramid Pty Ltd and Oncogeni Ltd have
reporting dates at 31 December whilst the reporting date of Tumorkine Pty Ltd
is 30 June.
All transactions and balances between Group companies are eliminated on
consolidation, including unrealised gains and losses on transactions between
Group companies. Where unrealised losses on intra-group asset sales are
reversed on consolidation, the underlying asset is also tested for impairment
from a Group perspective. Amounts reported in the financial statements of its
subsidiary have been adjusted where necessary to ensure consistency with the
accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or
disposed of during the year are recognised from the effective date of
acquisition, or up to the effective date of disposal, as applicable.
The Group attributes total comprehensive income or loss of subsidiaries
between the owners of the parent and the non-controlling interests based on
their respective ownership interests.
d) Revenue From Contracts with Customers
The Group recognises revenue as follows:
Commercialisation and milestone revenue
Commercialisation and milestone revenue generally includes non-refundable
upfront license and collaboration fees; milestone payments, the receipt of
which is dependent upon the achievement of certain clinical, regulatory or
commercial milestones; as well as royalties on product sales of licensed
products, if and when such product sales occur; and revenue from the supply of
products. Payment is generally due on standard terms of 30 to 60 days.
Amounts received prior to satisfying the revenue recognition criteria are
recorded as deferred revenue or deferred consideration, depending on the
nature of arrangement. Amounts expected to be recognised as revenue within the
12 months following the consolidated balance sheet date are classified within
current liabilities. Amounts not expected to be recognised as revenue within
the 12 months following the consolidated balance sheet date are classified
within non-current liabilities.
Milestone revenue
The Group applies the five-step method under the standard to measure and
recognise milestone revenue. The receipt of milestone payments is often
contingent on meeting certain clinical, regulatory or commercial targets, and
is therefore considered variable consideration. The Group estimates the
transaction price of the contingent milestone using the most likely amount
method.
The Group includes in the transaction price some or all of the amount of the
contingent milestone only to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will not
occur when the uncertainty associated with the contingent milestone is
subsequently resolved.
Milestone payments that are not within the control of the Company, such as
regulatory approvals, are not considered highly probable of being achieved
until those approvals are received.
Any changes in the transaction price are allocated to all performance
obligations in the contract unless the variable consideration relates only to
one or more, but not all, of the performance obligations.
e) Business Combinations
The Group applies the acquisition method in accounting for business
combinations. The consideration transferred by the Group to obtain control of
a subsidiary is calculated as the sum of the acquisition date fair values of
assets transferred, liabilities incurred and the equity interests issued by
the Group, which includes the fair value of any asset or liability arising
from a contingent consideration arrangement. Acquisition costs are expensed as
incurred.
Assets acquired and liabilities assumed are generally measured at their
acquisition-date fair values.
f) Foreign Currency Translation
i) Functional and Presentation Currency
The financial statements are presented in Pounds Sterling (GBP), which is the
Group's functional and presentation currency.
ii) Transactions and Balances
Foreign currency monetary assets and liabilities are translated at the rates
ruling at the reporting date. Exchange differences arising on the
retranslation of assets and liabilities are recognised immediately in profit
or loss.
iii) Foreign operations
In the Group's financial statements, all assets, liabilities and transactions
of Group entities with a functional currency other than GBP are translated
into GBP upon consolidation. The functional currencies of entities within the
Group have remained unchanged during the reporting period.
On consolidation, assets and liabilities have been translated into GBP at the
closing rate at the reporting date. Goodwill and fair value adjustments
arising on the acquisition of a foreign entity have been treated as assets and
liabilities of the foreign entity and translated into GBP at the closing rate
on the acquisition date. Income and expenses have been translated into GBP at
the average rate of over the reporting period. Exchange differences are
charged or credited to other comprehensive income and recognised in the
currency translation reserve in equity. On disposal of a foreign operation,
the related cumulative translation differences recognised in equity are
reclassified to profit or loss and are recognised as part of the gain or loss
on disposal.
g) Segment Reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-makers. The chief operating
decision-makers, who are responsible for allocating resources and assessing
performance of the operating segments, has been identified as the executive
Board of Directors.
All operations and information are reviewed together so that at present there
is only one reportable operating segment.
In the opinion of the Directors, during the period the Group operated in the
single business segment of biotechnology.
In 2023 the Group derived more than 10% of its revenue from a single external
customer.
h) Property, Plant & Equipment
Property, plant and equipment is stated at cost less accumulated depreciation
and, where appropriate, less provisions for impairment.
The initial recognition and subsequent measurement of property, plant and
equipment are:
Initial recognition
Property, plant and equipment is initially recognised at acquisition cost,
including any costs directly attributable to bringing the assets to the
location and condition necessary for them to be capable of operating. In most
circumstances, the cost will be its purchase cost, together with the cost of
delivery.
Subsequent measurement
An asset will only be depreciated once it is ready for use. Depreciation is
charged so as to write off the cost of property, plant and equipment, less its
estimated residual value, over the expected useful economic lives of the
assets.
Depreciation is charged on a straight-line basis as follows:
· Equipment 3 years
The disposal or retirement of an asset is determined by comparing the sales
proceeds with the carrying amount. Any gains or losses are recognised within
the Consolidated Statement of Comprehensive Income.
i) Goodwill and Intangible Assets
Goodwill represents the future economic benefits arising from a business
combination that are not individually identified and separately recognised.
Goodwill is carried at cost less accumulated impairment losses. Refer to Note
(j) for a description of impairment testing procedures.
Transactions where the definition of a business combination, per IFRS 3, is
not met due to the asset or group of assets not meeting the definition of a
business, or where the concentration test affords the Directors the option not
to treat as a business, are recognised as an asset acquisition. The Group
identifies and recognises the individual identifiable assets acquired and
liabilities assumed and allocates the cost of the group of assets and
liabilities (including directly attributable costs of making the acquisition)
to the individual identifiable assets and liabilities on the basis of their
relative fair values at the date of purchase.
Other intangible assets, including licences and patents, that are acquired by
the Group and have finite useful lives are measured at cost less accumulated
amortisation and any accumulated impairment losses. Refer to Note (j) for
amortisation procedures.
j) Impairment Testing of Goodwill, Other Intangible Assets and
Property, Plant and Equipment
For impairment assessment purposes, assets are grouped at the lowest levels
for which there are largely independent cash inflows (cash-generating units).
As a result, some assets are tested individually for impairment, and some are
tested at cash-generating unit level. Goodwill is allocated to those
cash-generating units that are expected to benefit from synergies of a related
business combination and represent the lowest level within the Group at which
management monitors goodwill.
Cash-generating units to which goodwill has been allocated are tested for
impairment at least annually. All other individual assets or cash-generating
units are tested for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset's (or
cash-generating unit's) carrying amount exceeds its recoverable amount, which
is the higher of fair value less costs of disposal and value-in-use. To
determine the value-in-use, management estimates expected future cash flows
from each cash-generating unit and determines a suitable discount rate in
order to calculate the present value of those cash flows. The data used for
impairment testing procedures are directly linked to the Group's latest
approved budget, adjusted as necessary to exclude the effects of future
reorganisations and asset enhancements. Discount factors are determined
individually for each cash-generating unit and reflect current market
assessments of the time value of money and asset-specific risk factors.
Impairment losses for cash-generating units reduce first the carrying amount
of any goodwill allocated to that cash-generating unit. Any remaining
impairment loss is charged pro rata to the other assets in the cash-generating
unit.
Amortisation is calculated to write off the cost of intangible assets less
their estimated residual values using the straightOline method over their
estimated useful lives, from the date the assets are available for use and is
recognised in profit or loss. The available for use date is determined as the
date from which a product is commercialised - this had yet to occur, for all
intangible assets, at 31 December 2023 and 2022. Goodwill is not amortised.
k) Financial Instruments
IFRS 9 requires an entity to address the classification, measurement and
recognition of financial assets and liabilities.
i) Classification
The Group classifies its financial assets in the following measurement
categories:
· those to be measured at amortised cost.
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.
ii) 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.
iii) 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.
Receivables
Amortised cost: Assets that are held for collection of contractual cash flows,
where those cash flows represent solely payments of principal and interest,
are measured at amortised cost. Interest income from these financial assets is
included in finance income using the effective interest rate method. Any gain
or loss arising on derecognition is recognised directly in profit or loss and
presented in other gains/(losses) together with foreign exchange gains and
losses. Impairment losses are presented as a separate line item in the
statement of profit or loss.
iv) Impairment
The Group assesses, on a forward-looking basis, the expected credit losses
associated with any debt instruments carried at amortised cost. 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.
l) Taxation
Taxation comprises current and deferred tax.
Current tax is based on taxable profit or loss for the period. Taxable profit
or loss differs from profit or loss as reported in the income statement
because it excludes items of income and expense that are taxable or deductible
in other years and it further excludes items that are never taxable or
deductible. The asset or liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the balance sheet
date.
Deferred tax is recognised on differences between the carrying amounts of
assets and liabilities in the financial information and the corresponding tax
bases used in the computation of taxable profit and is accounted for using the
balance sheet liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary difference arises
from initial recognition of goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled, or the asset realised. Deferred tax is
charged or credited to profit or loss, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax assets and
liabilities on a net basis.
R&D tax rebate receivable represents refundable tax offsets, in cash, from
the Australian Taxation Office in relation to expenditure incurred in the
current year for eligible research and development activities. Research and
development activities are refundable at a rate of 43.5% for each dollar
spent, subject to meeting certain eligibility criteria. Funds are expected to
be received subsequent to the lodgement of the income tax return and research
and development tax incentive schedule for the current financial year. The
Group recognises a taxation credit, in the year the cash is received, which
generally relates to expenses during the prior period. In future periods
(which will include UK R&D tax credits), once an established pattern of
successful claims is recorded, the Group will consider an accruals basis,
recording the tax credit and a receivable in the period the eligible
expenditure was incurred.
m) Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and in hand and demand
deposits with banks and other financial institutions, that are readily
convertible into known amounts of cash, and which are subject to an
insignificant risk of changes in value.
n) Equity, Reserves and Dividend Payments
Share capital represents the nominal (par) value of shares that have been
issued.
Share premium includes any premiums received on issue of share capital. Any
transaction costs directly associated with the issuing of shares are deducted
from share premium, net of any related income tax benefits.
Share based payments represents the value of equity settled share-based
payments provided to employees, including key management personnel, and third
parties for services provided.
Translation reserve comprises foreign currency translation differences arising
from the translation of financial statements of the Group's foreign entities
into GBP on consolidation.
Retained losses represent the cumulative retained losses of the Group at the
reporting date.
Merger relieve reserve arises from the acquisition of Oncogeni Ltd and Lyramid
Pty Ltd whereby the excess of the fair value of the issued ordinary share
capital issued over the nominal value of these shares is transferred to his
reserve in accordance with section 612 of the Companies Act 2006
All transactions with owners of the parent are recorded separately within
equity.
No dividends are proposed for the period.
o) Earnings Per Ordinary Share
The Company presents basic and diluted earnings per share data for its
Ordinary Shares.
Basic earnings per Ordinary Share is calculated by dividing the profit or loss
attributable to Shareholders by the weighted average number of Ordinary Shares
outstanding during the period.
Diluted earnings per Ordinary Share is calculated by adjusting the earnings
and number of Ordinary Shares for the effects of dilutive potential Ordinary
Shares.
p) Employee Benefits
Provision is made for Lyramid Pty Ltd's liability for employee benefits
arising from services rendered by employees up to the end of the reporting
period. In determining the liability, consideration is given to employee wage
increases and the probability that the employee may satisfy vesting
requirements.
Short term obligations
Liability for wages and salaries, including non-monetary benefits, annual
leave, long service leave and accumulating sick leave expected to be settled
within 12 months of the reporting date are recognised in other payables in
respect of employees' services up to the reporting date and are measured at
the amounts expected to be paid when the liabilities are settled.
Other long-term employee benefit obligations
Liability for annual leave and long service leave not expected to be settled
within 12 months from the reporting date is recognised in the provision for
employee benefits and measured as the present value of expected future
payments to be made in respect of services provided by employees up to the
reporting date, using the projected unit credit method. Consideration is given
to expected future wage and salary levels, of employee departures and period
of service.
Retirement benefit obligations
Contributions for retirement benefit obligations are recognised as an expense
as they become payable. Prepaid contributions are recognised as an asset to
the extent that a cash refund or a reduction in the future payment is
available. Contributions are paid into the fund nominated by the employee.
Employee benefits provision
The liability for employee benefits expected to be settled more than 12 months
from the reporting date are recognised and measured at the present value of
the estimated future cash flows to be made in respect of all employees at the
reporting date. In determining the present value of the liability, estimates
of attrition rates and pay increases through promotion and inflation have been
taken into account.
q) Leases
Leases are accounted for by recognising a right-of-use asset and a lease
liability, except for leases of low value assets and leases with a duration of
12 months or less, for which the lease cost is expensed in the period to which
it relates.
A lease liability is recognised at the commencement date of a lease. The lease
liability is initially recognised at the present value of the lease payments
to be made over the term of the lease, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the
consolidated entity's incremental borrowing rate.
Lease payments comprise of fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a
purchase option when the exercise of the option is reasonably certain to
occur, and any anticipated termination penalties.
The variable lease payments that do not depend on an index or a rate are
expensed in the period in which they are incurred. Lease liabilities are
measured at amortised cost using the effective interest method. The carrying
amounts are remeasured if there is a change in the following: future lease
payments arising from a change in an index or a rate used; residual guarantee;
lease term; certainty of a purchase option and termination penalties. When a
lease liability is remeasured, an adjustment is made to the corresponding
right-of use asset, or to profit or loss if the carrying amount of the
right-of-use asset is fully written down.
Right-of-use assets are initially measured at the amount of the lease
liability, reduced for any lease incentives received, and increased for: lease
payments made at or before commencement of the lease; initial direct costs
incurred; and the amount of any provision recognised where the Group is
contractually required to dismantle, remove or restore the leased asset.
For contracts that both convey a right to the Group to use an identified asset
and require services to be provided to the Group by the lessor, the Group has
elected to account for the entire contract as a lease, i.e. it does not
allocate any amount of the contractual payments to, and account separately
for, any services provided by the supplier as part of the contract.
r) Share-Based Payments
The Company has applied the requirements of IFRS 2 Share-based payments.
The Company issues equity settled share-based payments to the Directors and to
third parties for the provision of services provided for assistance in raising
private equity. Equity settled share-based payments are measured at fair value
at the date of grant, or the date of the service provided. The fair value
determined at the grant date or service date of the equity settled share-based
payment is recognised as an expense, or recognised against share premium where
the service received relates to assistance in raising equity, with a
corresponding credit to the share based payment reserve. The fair value
determined at the grant date of equity settled share based payment is expensed
on a straight-line basis over the life of the vesting period, based on the
Company's estimate of shares that will eventually vest. Once an option or
warrant vests, no further adjustment is made to the aggregate expensed.
The fair value is measured by use of the Black Scholes model as the Directors
view this as providing the most reliable measure of valuation. The expected
life used in the model has been adjusted, based on management's best
estimates, for the effects of non-transferability, exercise restrictions and
behavioural considerations. The market price used in the model is the quoted
LSE closing price. The fair value calculated is inherently subjective and
uncertain due to the assumptions made and the limitation of the calculation
used.
s) Financial Risk Management Objectives and Policies
The Group does not enter into any forward exchange rate contracts.
The main financial risks arising from the Group's activities are market risk,
interest rate risk, foreign exchange risk, credit risk, liquidity risk and
capital risk management. Further details on the risk disclosures can be found
in Note 22.
t) Significant Accounting Judgements, Estimates and Assumptions
The preparation of the financial statements in conformity with International
Financial Reporting Standards requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the
process of applying the Group's accounting policies.
Estimates and judgements are continually evaluated, and are based on
historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances. The
Directors consider the significant accounting judgements, estimates and
assumptions used within the financial statements to be:
Impairment of intercompany loans
The Group and the Company assess at each reporting date whether there is any
objective evidence that loans to subsidiaries are impaired. To determine
whether there is objective evidence of impairment, a considerable amount of
estimation is required to determine future credit losses over the 12 month
period of life time of the loan.
Impairment of intangible assets and goodwill
As at 31 December 2023 The Group has £5,343,505 of intangible assets which
relate to £5,061,594 of in-progress research and development and £281,911 of
goodwill related to the expected tax benefits of the capitalised amounts. The
Group has assessed whether there are any indicators of impairment by
estimating the recoverable amount of each asset or cash-generating unit based
on probable future cashflows.
Business combinations
Management uses valuation techniques when determining the fair values of
certain assets and liabilities acquired in a business combination (see Notes 3
and 4). In particular, the fair value of contingent consideration is dependent
on the market capitalisation of the Group exceeding a threshold amount.
In the prior year Management had performed the optional concentration test
available under IFRS3, in order to determine that the acquisition of Oncogeni
Ltd can be treated as an asset acquisition. Judgement is required to determine
whether 'substantially all' the fair value is concentrated in a single asset
or group of assets, and when considering a group of assets, assessing whether
those assets are similar. In determining whether assets are similar, judgement
is required to consider the nature of each single identifiable asset and the
risks associated with managing and creating outputs from the assets (that is,
the risk characteristics). Management has considered that the two separate
in-progress research and development programs, MK cell therapy and STAT-6
siRNA therapeutics, are similar as they are both pre-clinical stage oncology
treatments.
4. Acquisitions
Acquisition of Oncogeni Limited
On 16 September 2022, the Group acquired 100% of the equity instruments of
Oncogeni Ltd, a UK based business, thereby obtaining control. The acquisition
was assessed as being complementary to the Group's existing pre- clinical drug
development business. The Group applied the concentration test under IFRS3 and
considered it as an asset acquisition.
The details of the asset acquisition are as follows:
Fair value of consideration transferred £
Equity consideration 3,750,000
Costs directly attributable to acquisition 109,079
Total 3,859,079
Recognised amounts of identifiable net assets at book values
Trade and other receivables 7,294
Cash and cash equivalents 5,601
Total current assets 12,895
Trade and other payables 15,792
Total current liabilities 15,792
Identifiable net liabilities 2,897
Intangible asset at cost 3,861,975
Consideration transferred settled in cash -
Cash and cash equivalents acquired 5,601
Net cash inflow on acquisition 5,601
Consideration transferred
The acquisition of Oncogeni was settled for a consideration of £3,750,000,
all of which was payable in shares. £109,079 of costs directly attributable
to the acquisition have been included in the consideration of the transaction.
Identifiable net assets
The carrying value of the trade and other receivables acquired as part of the
business combination amounted to £7,294. As of the acquisition date, the
Group's best estimate of the contractual cash flow not expected to be
collected amounted to zero.
5. Investments in Subsidiaries
The parent company has investments in the following subsidiary undertakings
which are unlisted:
Incorporation Country of Registered Proportion of
Name date incorporation address Holding voting rights Principal activity
Oncogeni Ltd 29 May 2019 England 85 Great Portland Street, Ordinary 100% Biotechnology
First Floor, London, shares research
England, W1W 7LT company
Lyramid Pty 1 July 2016 Australia Suite 4, Ordinary 100% Biotechnology
Limited 246-250 Railway Parade, shares research
West Leederville, company
WA 6007, Australia
Tumorkine Pty 11 March 2022 Australia Suite 4, Ordinary 100% Dormant
Limited 246-250 Railway Parade, shares
West Leederville,
WA 6007, Australia
6. Directors' and Employees' Remuneration
The aggregate remuneration comprised:
Group Year ended 31 December Group Year ended 31 December Company Year ended 31 December Company Year ended 31 December
2023 2022 2023 2022
£ £ £ £
Wages and salaries 929,019 509,301 808,135 383,350
N.I and other Social Security Pension costs 98,363 33,814 98,363 33,814
Share-based payments 54,949 23,804 43,460 12,270
5,616 5,619 5,616 5,619
1,087,947 572,538 955,574 435,053
Remuneration of Key Management Personnel
Year ended 31 December Year ended 31 December
2023 2022
£ £
Salaries and short-term employee benefits 613,000 308,692
Long term benefits - -
Post-employment benefits 41,700 12,162
Share based payment charge 5,616 5,619
660,316 326,473
Key management personnel has been defined as the directors of Roquefort
Therapeutics plc only.
The total remuneration of the highest paid director was £305,800 (2022:
£118,305), including pension contributions of £27,800 (2022: £4,054).
Further information about the remuneration of individual directors is provided
in the Directors' Remuneration Report.
Average number of employees during the year (including Directors full time
equivalent)
Year ended 31 December Year ended 31 December
2023 2022
£ £
Continuing operations 10 5
At 31 December 2023 the Company had nine (9) employees in total; seven (7)
Directors & (2) laboratory staff.
Lyramid Pty Ltd has one (1) employee engaged in Research & Development.
Oncogeni Ltd has no employees.
7. Revenue
Year ended 31 December Year ended 31 December
2023 2022
£ £
Licence revenue 200,000 -
Revenue in 2023 was fully generated in the UK and represents licencing revenue
for exclusive worldwide use (excluding Japan) for certain Midkine antibodies
in the field of medical diagnostics. Future revenue is subject to the reaching
of certain commercial milestones with the initial £200,000 representing the
initial non-refundable deposit. The Company expects the next milestone to be
achieved in Q4 of 2024. The total revenue was generated from one customer.
8. Other Comprehensive Income
Items credited/(charged) to the other comprehensive income line of the
statement of comprehensive income relate to the impact of foreign exchange
movements on cash and cash equivalents balances. The corresponding movement is
offset against the foreign exchange reserve in the statement of financial
position:
Year ended 31 December Year ended 31 December
2023 2022
£ £
Opening Balance (14,365) 624
Foreign exchange impact 27,045 (14,989)
Closing Balance 12,680 (14,365)
9. Operating Loss
The following items have been charged/(credited) to the statement of
comprehensive income in arriving at the Group's operating loss from continuing
operations:
Year ended 31 December Year ended 31 December
2023 2022
£ £
Directors' and employee costs Legal fees 856,333 365,564
Consulting and professional fees 28,182 46,373
Other expenditure 217,876 209,768
396,802 684,856
Administrative expenses 1,499,193 1,306,561
Share based payments to directors and senior management Research and 10,402 8,427
development expenditure(1)
620,159 319,315
Total operating expenditure 2,129,754 1,634,303
( )
(1) Includes short term license expense of £178,923 for right of use of a
laboratory and its equipment during the year (2022: £81,250).
During the year the Group obtained the following services from its auditor:
Year ended 31 December Year ended 31 December
2023 2022
£ £
Audit Services
Statutory audit - Group and Company Non-audit services 65,000 157,336
- -
65,000 157,336
The Group incurred no finance costs during the year ended 31 December 2023
(2022: £nil).
10. Taxation
Year ended 31 December Year ended 31 December
2023 2022
£ £
Current tax - -
Deferred tax - -
Australian R&D rebate(1) 151,359 18,886
UK R&D rebate 36,334 -
Income tax credit 187,693 18,886
(1) R&D tax rebate receivable represents refundable tax offsets, in cash,
from the Australian Taxation Office ("ATO") in relation to expenditure
incurred in the prior year for eligible research and development activities
Income tax can be reconciled to the loss in the statement of comprehensive
income as follows:
Year ended 31 December Year ended 31 December
2023 2022
£ £
Loss (1,932,233) (1,615,417)
R&D tax rebate (151,359) (18,886)
(2,083,592) (1,634,303)
Tax at the corporation rate of 25% (2022: 19%) 520,898 310,517
Effect of overseas tax rates(1) - 21,642
Expenditure disallowable for taxation (65,298) (82,705)
Share based payment temporary difference on which
no deferred tax asset has been recognised (2,601) (1,067)
Remeasurement of deferred tax for changes in tax rates 5,678 74,363
Tax losses on which no deferred tax asset has been recognised (458,677) (322,750)
Total tax (charge)/credit - -
UK - -
Overseas - -
Total tax (charge)/credit) - -
(1)In the current year the UK corporation tax was increased to 25% which is
equal to the Australian Small Company tax rate of 25%.
The Group has accumulated tax losses of approximately £3,301,716 (2022:
£1,557,117) that are available, under current legislation, to be carried
forward indefinitely against future profits.
The tax losses can be broken down to the following:
Year ended 31 December Year ended 31 December
2023 2022
£ £
Australia (350,039) (125,138)
United Kingdom (2,951,677) (1,431,979)
Carried forward tax losses (3,301,716) (1,557,117)
A deferred tax asset has not been recognised in respect of these losses due to
the uncertainty of future profits. The amount of the deferred tax asset not
recognised is approximately £837,982 (2022: £389,279).
Year ended Year ended
31 December 2023
£
UK AU
31 December 2022
£
UK AU
Opening balance (372,176) (31,285) - -
Tax effect of temporary differences:
Accumulated losses (392,477) (56,225) (357,995) (31,285)
Deductible temporary differences 36,334 - (14,181) -
Deferred tax (asset) not recognised (728,319) (87,510) (372,176) (31,285)
The Company calculated the UK deferred tax balances at 25% and the Australian
deferred tax balances at the current small company tax rate of 25%, which is
expected to continue in future periods.
11. Earnings Per Share
Year ended 31 December Year ended 31 December
2023 2022
£ £
Loss attributable to equity shareholders (1,744,540) (1,615,417)
Weighted average number of ordinary shares 129,149,998 103,479,476
Loss per share in pence
Basic (1.35) (1.56)
Diluted (1.35) (1.56)
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.
As at the end of the financial period there were 23,875,000 (2022: 35,272,000)
warrants in issue.
12. Intangible Assets
In-progress R&D Goodwill Total
£ £ £
Cost
At 1 January 2023 5,061,594 281,911 5,343,505
Acquired through asset acquisition - - -
At 31 December 2023 5,061,594 281,911 5,343,505
Amortisation
At 1 January 2023 - - -
Amortisation - - -
Impairment Charge - - -
At 31 December 2023 - - -
Carrying value
At 31 December 2023 5,061,594 281,911 5,343,505
In-progress R&D Goodwill Total
£ £ £
Cost
At 1 January 2022 1,199,619 281,911 1,481,530
Acquired through asset acquisition 3,861,975 - 3,861,975
At 31 December 2022 5,061,594 281,911 5,343,505
Amortisation - - -
At 1 January 2022
Amortisation - - -
Impairment Charge - - -
At 31 December 2022 - - -
Carrying value
At 31 December 2022 5,061,594 281,911 5,343,505
The Directors have concluded that there has been no impairment of the goodwill
associated with the acquisition of Lyramid Pty Limited at 31 December 2023.
The Goodwill represents the offsetting balance to the deferred tax liability
for the acquisition of Lyramid Pty Ltd.
At 31 December 2023, the Group performed its annual impairment test in
relation to intangible assets not yet available for use and identified no
indicators of impairment in line with IAS 36 Impairment of Assets, as all
acquired in-progress R&D programs are in active development and
progressing as planned. At the test date, it was determined that due to the
ongoing pre-clinical research and development in-progress R&D acquired,
there was too much uncertainty to estimate a value-in-use, based on discounted
future cash flows from the assets. The Group estimated fair value less costs
to sell, by referring to market transactions for pre-clinical and clinical
oncology drug candidates. Due to the nature of oncology drug development, the
fair value is not considered to be particularly sensitive to any one
underlying valuation assumption other than the ultimate outcome of drug
development and commercialisation, which is binary.
Accordingly, the Group has concluded that the estimated recoverable amount of
the assets did exceed the carrying amount and therefore no impairment was
identified.
13. Investments
Shares in subsidiary
Investment Investment in
in Lyramid Pty Ltd Oncogeni Ltd undertakings
Company £ £ £
Cost at 1 January 2023 1,015,695 3,859,079 4,874,774
Additions - - -
Cost at 31 December 2023 1,015,695 3,859,079 4,874,774
Impairment
At 1 January 2023 - - -
Charge for the period - - -
At 31 December 2023 - - -
Net book value at 31 December 2023 1,015,695 3,859,079 4,874,774
Shares in subsidiary undertakings
Investment in Lyramid Pty Ltd Investment in Oncogeni Ltd £
£ £
Company
Cost at 1 January 2022 1,015,695 - 1,015,695
Additions - 3,859,079 3,859,079
Cost at 31 December 2022 1,015,695 3,859,079 4,874,774
Impairment
At 1 January 2022 - - -
Charge for the period - - -
At 31 December 2022 - - -
Net book value at 31 December 2022 1,015,695 3,859,079 4,874,774
The Directors have concluded that there has been no impairment to the
investment in Oncogeni Ltd or Lyramid Pty Limited at 31 December 2023.
Impairment review disclosures required by IAS36 are included in note 12 to the
financial statements.
14. Property, Plant & Equipment
Group and Company Equipment Total
Cost
As at 1 January 2022 - -
Additions - -
Disposals - -
As at 31 December 2022 - -
Additions 54,042 54,042
Disposals - -
As at 31 December 2023 54,042 54,042
Accumulated depreciation As at 1 January 2022
- -
Charge for the period - -
Disposals - -
As at 31 December 2022 - -
Charge for the period (3,890) (3,890)
Disposals - -
As at 31 December 2023 (3,890) (3,890)
Net book value
As at 31 December 2022 - -
As at 31 December 2023 50,152 50,152
As at 31 December 2023 the Group did not have any right to use assets.
15. Trade and Other Receivables
Group 31 December Group 31 December Company 31 December Company 31 December
2023 2022 2023 2022
£ £ £ £
Other receivables 105,242 45,124 95,054 - 64,309
Prepayments and accrued income 52,347 56,614 29,934
157,589 101,738 124,988 64,309
There are no material differences between the fair value of trade and other
receivables and their carrying value at the year end.
No receivables were past due or impaired at the year end.
16. Cash and Cash Equivalents
Group 31 December Group 31 December Company 31 December Company 31 December
2023 2022 2023 2022
£ £ £ £
Cash at bank and in hand 537,322 2,322,974 301,674 2,274,478
The Directors consider the carrying amount of cash and cash equivalents
approximates to their fair value.
17. Trade and Other Payables
Group 31 December Group 31 December Company 31 December Company 31 December
2023 2022 2023 2022
£ £ £ £
Trade creditors 144,841 68,379 82,058 26,210
Accruals and other creditors 162,273 211,291 100,854 157,594
307,114 279,670 182,912 183,804
The fair value of trade and other payables approximates their current book
values.
18. Deferred Tax Liabilities
Group Company
£ £
At 1 January 2022 281,911 -
Released in year - -
Additions - -
At 31 December 2022 281,911 -
At 1 January 2023 281,911 -
Additions - -
At 31 December 2023 281,911 -
Deferred tax liability is the expected tax implication from the amortisation
of the intangible asset acquired as part of the Lyramid Pty Ltd transaction.
19. Share Capital
Issued and fully paid
Ordinary Shares Share Capital Share Premium
No. £ £ Total
Group and Company £
As at 1 January 2022 71,900,000 719,000 3,460,595 4,179,595
Issue of ordinary shares(1) 50,000,000 500,000 - 500,000
Issue of ordinary shares(2) 7,249,998 72,500 942,499 1,014,999
As at 31 December 2022 129,149,998 1,291,500 4,403,094 5,694,594
As at 31 December 2023 129,149,998 1,291,500 4,403,094 5,694,594
(1)On 16 September 2022, the Company issued 50,000,000 ordinary shares of
£0.01 to acquire Oncogeni Ltd, recorded at the market price of £0.075 per
share.
(2)On 16 September 2022, the Company issued 7,249,998 ordinary shares of
£0.01 for cash at a placing price of £0.14 per share.
20. Share Based Payment Reserve
The share-based payments reserve is used to recognise the value of
equity-settled share-based payments provided to employees, including key
management personnel and external parties as part of their remuneration.
2023 2022
Group and Company £ £
Opening balance 375,135 366,708
NED and Advisor warrants issued(1) 10,402 8,427
At 31 December 385,537 375,135
(1)On 26 June 2022, Ms Jean Duvall, Dr Simon Sinclair and Professor Trevor
Jones were awarded 300,000 NED and Advisor warrants each. These warrants
entitle the warrant holder to subscribe for one ordinary share at £0.15 per
ordinary share. 50% Warrants are exercisable one year after grant date with
the remaining balance exercisable two years after grant date (April 2024). The
expense in 2023 represents the warrants that have vested in the current year.
The fair value of the services received in return for the warrants granted are
measured by reference to the fair value of the warrants granted. The estimate
of the fair value of the warrants granted is measured based on the
Black-Scholes valuations model. Measurement inputs and assumptions are as
follows:
Number of Share Exercise Expected Expected Risk free Expected
Warrant warrants Price Price volatility life rate dividends
Director 750,000 £0.05 £0.05 50.00% 5 0.15% 0.00%
Director 750,000 £0.05 £0.10 50.00% 5 0.15% 0.00%
Broker Placing 480,000 £0.05 £0.05 50.00% 3 0.15% 0.00%
Completion 3,000,000 £0.10 £0.10 50.00% 3 0.15% 0.00%
Senior Mgt 4,500,000 £0.10 £0.15 50.00% 5 0.15% 0.00%
Optiva 1,320,000 £0.10 £0.10 50.00% 3 0.15% 0.00%
Orana 175,000 £0.10 £0.10 50.00% 3 0.15% 0.00%
NED and Advisor 900,000 £0.08 £0.15 50.00% 5 0.15% 0.00%
TOTAL 11,875,000
Exercise
Warrants Number of Warrants Price Expiry date
As at 1 January 2022 34,475,000 £0.105 -
Issued on 28 April 2022(1) 900,000 £0.15 28 April 2027
At 31 December 2022 35,375,000 £0.106
Expired during the year (11,500,00) £0.102 21 March 2023
As at 31 December 2023 23,875,000 £0.109
(1)50% of the warrants vest on 28 April 2023 and the remainder vest on 28
April 2024
The weighted average time to expiry of the warrants as at 31 December 2023 is
3.99 years (2022: 3.10 years). Of the total number of options outstanding at
31 December 2023, 23,425,000 (2022: 34,475,000) had vested and were
exercisable
The expected volatility was calculated using the Exponentially Weighted Moving
Average Mode. Due to limited trading history comparable listed peer company
information was used.
21. Merger Relief Reserve
Under Companies Act Section 612, Merger relief reserve applies when a company
has secured at least a 90% equity holding in another company in return for an
allotment of equity shares in the issuing company. It requires that section
610 does not apply to the premium on those shares (i.e. no share premium
recognised) and instead a Merger relief reserve is recognised.
Group and Company £
At 1 January 2022 450,000
Acquisition of Oncogeni Ltd(1) 3,250,000
At 31 December 2022 3,700,000
At 31 December 2023 3,700,000
(1)The issue on 16 September 2022 of 50,000,000 new shares relating to the
acquisition of Oncogeni Ltd. The reserve reflects the difference between the
nominal value of shares at the date of issue of £0.01 and the share price
immediately preceding the issue of £0.75 per share. The shares issued formed
part of the consideration for the acquisition of 100% of the equity of
Oncogeni and therefore qualify for merger relief.
22. Financial Instruments and Risk Management
Capital Risk Management
The Group manages its capital to ensure that it will be able to continue as a
going concern while maximising the return to stakeholders. The overall
strategy of the Group is to minimise costs and liquidity risk.
The capital structure of the Group consists of equity attributable to equity
holders of the Group, comprising issued share capital, reserves and retained
earnings as disclosed in the Statement of Changes of Equity.
The Group is exposed to a number of risks through its normal operations, the
most significant of which are interest, credit, foreign exchange, commodity
and liquidity risks. The management of these risks is vested to the Board of
Directors.
The sensitivity has been prepared assuming the liability outstanding was
outstanding for the whole period. In all cases presented, a negative number in
profit and loss represents an increase in finance expense / decrease in
interest income.
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group's receivables from
customers. Indicators that there is no reasonable expectation of recovery
include, amongst others, failure to make contractual payments for a period of
greater than 120 days past due.
The carrying amount of financial assets represents the maximum credit
exposure.
The principal financial assets of the Group are bank balances. The Group
deposits surplus liquid funds with counterparty banks that have high credit
ratings, and the Directors consider the credit risk to be minimal.
The Group's maximum exposure to credit by class of individual financial
instrument is shown in the table below:
Carrying value at Maximum exposure at 31 December
31 December 2023
2023 £
£
Trade receivables - -
Other receivables 105,242 105,242
Cash and cash equivalents 537,322 537,322
642,564 642,564
Carrying value at Maximum exposure at 31 December
31 December
2022 2022
£ £
Trade receivables 56,614 56,614
Other receivables 45,124 45,124
Cash and cash equivalents 2,322,974 2,322,974
2,424,711 2,424,711
The Group operates in a global market with income and costs possibly arising
in a number of currencies and is exposed to foreign currency risk arising from
commercial transactions, translation of assets and liabilities and net
investment in foreign subsidiaries. Exposure to commercial transactions arise
from sales or purchases by operating companies in currencies other than the
Group's functional currency. Currency exposures are reviewed regularly.
The Group has a limited level of exposure to foreign exchange risk through
their foreign currency denominated cash balances and a portion of the Group's
costs being incurred in Australian Dollars. Accordingly, movements in the
Sterling exchange rate against these currencies could have a detrimental
effect on the Group's results and financial condition.
Currency risk is managed by maintaining some cash deposits in currencies other
than Sterling.
The table below shows the currency profiles of cash and cash equivalents:
At At
31 December 2023 31 December 2022
£ £
Sterling 501,373 2,279,240
Australian Dollars 34,825 43,734
US Dollars 1,124 -
537,322 2,322,974
At 31 December 2023 At 31 December 2022
£ £
+10% weaker (10%) stronger +10% weaker (10%) stronger
Net Loss(1) (22,276) 22,276 (34,181) 34,181
Carrying value of net assets(2) (4,749) 4,749 (594) 594
(1)10% weaker relates to the Great British Pound weakening against the
currency and therefore the Group would incur greater expenditure in its
functional currency
(2)10% weaker relates to the Great British Pound weakening against the
currency and therefore the net liabilities (excluding intercompany borrowings)
denominated in AUD will increase
Foreign currency sensitivity analysis
As at 31 December 2023, the sensitivity analysis assumes a +/-10% change of
the AUD/GBP, exchange rates, which represents management's assessment of a
reasonably possible change in foreign exchange rates (2022: 10%). The
sensitivity analysis was applied on net loss on the Australian operations and
the carrying value of financial assets and liabilities.
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 principal current asset of the business is cash and cash equivalents and
is therefore the principal financial instrument employed by the Group to meet
its liquidity requirements. The Board ensures that the business maintains
surplus cash reserves to minimise any liquidity risk.
The financial liabilities of the Group and Company, predominantly trade and
other payables, are mostly due within 3 months (2022: 3 months) of the
Consolidated Statement of Financial Position date; therefore, the undiscounted
amount payable is the same as their carrying value. Further analysis of the
lease commitment is provided in note 24. All other non-current liabilities are
due between 1 to 5 years after the period end. The Group does not have any
borrowings or payables on demand which would increase the risk of the Group
not holding sufficient reserves for repayment.
The Group had cash and cash equivalents at period end as below:
At 31 December At 31 December
2023 2022
£ £
Cash and cash equivalents 537,322 2,322,974
537,322 2,322,974
Interest Rate Risk
The Group is exposed to interest rate risk whereby the risk can be a reduction
of interest received on cash surpluses held and an increase in interest on
borrowings the Group may have. The maximum exposure to interest rate risk at
the reporting date by class of financial asset was:
At 31 December At 31 December
2023 2022
£ £
Bank balances 537,322 2,322,974
537,322 2,322,974
The Group does not currently earn interest on its cash deposits.
23. Financial Assets and Financial Liabilities
Group Financial Assets Financial Liabilities
At amortised At amortised
Cost Cost
31 December 2023 Financial assets/liabilities £ £ Total
£
Trade and other receivables 70,243 - 70,243
Cash and cash equivalents 537,322 - 537,322
Trade and other payables - (307,114) (307,114)
607,565 (307,114) 300,451
Group Financial Financial
Assets Liabilities
At amortised At amortised
31 December 2022 Cost Cost Total
Financial assets/liabilities £ £ £
Trade and other receivables 101,738 - 101,738
Cash and cash equivalents 2,322,974 - 2,322,974
Trade and other payables - (279,670) (279,670)
2,424,712 (279,670) 2,145,042
Company Financial Assets Financial Liabilities
At amortised At amortised
Cost Cost
31 December 2023 Financial assets/liabilities £ £ Total
£
Trade and other receivables 95,054 - 95,054
Intercompany receivables 812,951 - 812,951
Cash and cash equivalents 301,674 - 301,674
Trade and other payables - (182,912) (182,912)
1,209,679 (182,912) 1,026,767
Company Financial Financial
Assets Liabilities
At amortised At amortised
31 December 2022 Cost Cost Total
Financial assets/liabilities £ £ £
Trade and other receivables 64,309 - 64,309
Intercompany receivables 451,622 - 451,622
Cash and cash equivalents 2,274,478 - 2,274,478
Trade and other payables - (183,802) (183,802)
2,790,409 (183,802) 2,606,607
24. Commitments
At 31 December At 31 December
2023 2022
£ £
Committed at the reporting date but not recognised as liabilities, payable:
Laboratory rental - 37,500
Research & Development 20,619 105,655
25. Contingent Liabilities
The purchase agreement for Lyramid Pty Ltd in December 2021 included an
additional contingent deferred consideration to the Seller to be satisfied in
the form of Ordinary Shares as follows:
(a) if prior to fifth anniversary of Admission (on 21 December 2021),
the Company's market capitalisation exceeds £25,000,000 for a period of 5 or
more consecutive trading days the Company shall issue to the Seller (or its
nominee) 5,000,000 Ordinary Shares; and
(b) if prior to fifth anniversary of Admission (on 21 December 2021) the
Company's market capitalisation exceeds £50,000,000 for a period of 5 or more
consecutive trading days the Company shall issue to the Seller (or its
nominee) a further 5,000,000 Ordinary Share. The fair value of contingent
deferred consideration was estimated to be nil at acquisition, at 31 December
2022 and at 31 December 2023.
As there is inherent uncertainty as to when, and if, the milestone will be
achieved the Group has disclosed the amount as a contingent liability as at
year end.
There were no other contingent liabilities at 31 December 2023 or 31 December
2022
26. Related Party Transactions
In 2023 £177,942 was paid to Cell Therapy Ltd, a Company in which CEO Ajan
Reginald is also a Director, for the recharge of a license to use a laboratory
with equipment and associated running costs including electricity and cleaning
(2022: £122,518). As at 31 December 2023, the Company owed Cell therapy
£22,329 (2022: £15,043).
27. Post reporting date events
There have been no significant events subsequent to 31 December 2023.
28. Ultimate controlling party
As at 31 December 2023, there was no ultimate controlling party of the
Company.
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