TIDMN4P
RNS Number : 4793C
N4 Pharma PLC
23 February 2022
23 February 2022
N4 Pharma Plc
("N4 Pharma" or the "Company")
Final Results
N4 Pharma Plc (AIM: N4P), the specialist pharmaceutical company
developing Nuvec(R), a novel delivery system for cancer treatments
and vaccines, is pleased to announce its audited results for the
year ended 31 December 2021.
Highlights:
-- Following extensive in vivo work and the commencement of
Material Transfer Agreements ("MTAs") in 2021 N4 Pharma has a clear
focus in 2022 as to where best to deploy resources in the short
term
-- Positive findings from the evaluation studies looking at the
potential of Nuvec(R) as a nano-carrier of a DNA plasmid expressing
TNFalpha
-- Commenced work with Medicines Discovery Catapult to extend
the observations to allow it to identify suitable loads to add to
Nuvec(R) to take to clinic
-- In the process of identifying alternatives to TNF as
immunomodulators or gene therapy which may use Nuvec(R) as a
delivery system
-- Commenced working with MTA partners assessing how Nuvec(R)
may enhance their proprietary technologies
-- Granting of (or notice of intention to grant) patents now in
Europe, Australia, Japan, China and in January of this year the
critical market of the US
-- Operating loss for the period was GBP 1,843,290 (2020: GBP 1,564,421 )
-- Cash balance at period end of approximately GBP1.8m
Nigel Theobald, Chief Executive Officer of the Company,
commented : "Following our most extensive in vivo work to date and
having worked with MTA partners in 2021 we have a clear focus in
2022 as to where best to deploy our R&D resources in the short
term. As a result of the positive findings from the evaluation
studies looking at the potential of Nuvec(R) as a nano-carrier of a
DNA plasmid expressing TNFalpha, which demonstrated a significant
inhibition of tumour growth derived from a human cell line, the
Company has commenced work with Medicines Discovery Catapult to
extend the observations to allow us to identify suitable loads to
add to Nuvec(R) to take to clinic.
'We felt from the outset it could be a pivotal year for the
Company and believe it has proved to be so. On the back of
increased data and results we are now in a position to narrow our
R&D focus onto the hugely exciting oncology and gene therapy
market. In parallel, we will continue to seek further MTA partners
to work with us and assess how Nuvec(R) may enhance their
proprietary technologies. Whilst we are not there yet and it will
be results driven, our path to the commercialisation of Nuvec(R) is
clearer now than perhaps at any time previously."
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 which has been
incorporated into UK law by the European Union (Withdrawal) Act
2018.
Enquiries:
N4 Pharma Plc Via IFC Advisory
Nigel Theobald, CEO
Luke Cairns, Executive Director
SP Angel Corporate Finance LLP Tel: + 44 (0)20 3470
Nominated Adviser and Joint Broker 0470
Matthew Johnson/Caroline Rowe (Corporate
Finance)
Vadim Alexandre/Rob Rees (Corporate
Broking)
Turner Pope Investments (TPI) Limited Tel: +44 (0)20 3657
Joint Broker 0050
Andy Thacker
IFC Advisory Limited Tel: +44 (0)20 3934
Financial PR 6630
Graham Herring
Zach Cohen
About N4 Pharma
N4 Pharma is a specialist pharmaceutical company developing a
novel delivery system for cancer and vaccine treatments using its
unique silica nanoparticle delivery system called Nuvec(R).
N4 Pharma's business model is to partner with companies
developing novel antigens for cancer and vaccine treatments to use
Nuvec(R) as the delivery vehicle to get their antigen into cells to
express the protein needed for the required immunity. As these
products progress through pre clinical and clinical programs, N4
Pharma will seek to receive up front payments, milestone payments
and ultimately royalty payments once products reach the market.
Chairman's Report
N4 Pharma Plc (the "Company"), is the holding company and Parent
Company for N4 Pharma UK Limited ("N4 UK"), and together form the
Group (the "Group").
N4 UK is a specialist pharmaceutical company engaged in the
development of silica nanoparticle delivery systems to improve the
cellular delivery of cancer treatments and vaccines .
Key Operational Events and Opportunities
Following the optimisation of Nuvec(R) with the improved
manufacture and dispersion of the particle in 2020, 2021 focussed
on in vivo studies with Nuvec(R) for both vaccines and in oncology
as well as the pursuit of MTAs with partners to begin exploring
potential collaborations.
In Vivo study results
The optimised Nuvec(R) in vivo studies in mice were planned to
assess the following points:
(1) to determine antibody production following dosing with
optimised Nuvec(R);
(2) To explore dose relationship to determine minimum and
maximum plasmid dose required for effect. This may also provide
information on dose-sparing i.e. reduced DNA use; and
(3) to confirm activity is retained after freeze drying and
reconstitution at different intervals.
These studies involved the Coronavirus plasmid and another
generic plasmid. In vitro performance with the optimised Nuvec(R)
loaded with a new SARS-COV-2 plasmid demonstrated an improved
response in terms of transfection and SARS-COV-2 spike protein
secretion in HEK 293 cells. In addition this combination also
showed a dose-related SARS-COV-2 spike protein production.
Whilst the in vitro results were very positive using the
SARS-COV-2 plasmid the results from the mouse in vivo
immunogenicity studies carried out by Evotec did not show any
meaningful immunological response. In addition, the initial mRNA
OVA in vivo immunogenicity study showed sub optimal responses.
These results again highlighted that a number of variables such as
dose, route of administration, timing of injection and formulation
could require extensive optimisation for each plasmid loaded onto
Nuvec(R). With the Company now getting traction with MTAs (as
detailed further below) the strategic decision was taken to
concentrate ongoing vaccine work on specific products linked to
proprietary DNA or mRNA sequences under MTA.
Aside from the in vivo work, The Medicines Catapult has recently
assessed, in vitro, Nuvec(R) loaded with DNA that had been stored
at room temperature for six months. Cell transfections was
successful demonstrating the stability of the Nuvec(R) loaded with
DNA and the potential storage advantages of Nuvec(R). Thus, it has
been shown that both mRNA and DNA loaded on Nuvec(R) are conferred
a high level of stability which may be an important feature in the
MTA related studies.
Oncology programme
In December, the Company announced it had successfully completed
an in vivo confirmatory oncology study which reinforced the results
from a pilot study earlier in the year. The initial pilot study was
designed to test the ability to use a monodispersed Nuvec(R)
formulation in an intra venous ("i.v") route of administration
using a DNA plasmid (pDNA) encoding TNF alpha to assess the
tolerance of different doses and to look at tumour regression.
The confirmatory study incorporated the following control and
test groups: TNF alpha pDNA alone, unloaded Nuvec(R), Nuvec(R)
loaded with 50ug of the TNF alpha pDNA and Nuvec(R) loaded with
20ug of TNF alpha pDNA. The study was conducted in untreated
tumour-bearing mouse models with dosing for each cohort completed
intravenously.
The results showed a clear inhibition of tumour progression for
the groups where Nuvec(R) was loaded with TNF alpha pDNA when
compared to the other three groups. In addition, the use of
Nuvec(R) was shown to improve animal survival rates in the life of
the study.
These excellent findings show that injection of a TNF alpha
plasmid loaded onto Nuvec(R) into tumour bearing mice successfully
leads to the transfection and release of TNF alpha which results in
the suppression of tumour growth and increased survival rates.
The results from the successful oncology study open up the field
of gene therapy and in vivo protein production as a key opportunity
for Nuvec(R). This will become an important area of focus moving
forward as discussed further in Future Prospects below. This
advancement is the result of the ongoing optimisation work to
produce a consistently monodispersed product, presenting
potentially huge market opportunities for Nuvec(R).
MTAs
During 2020 the Company entered into three MTAs covering vaccine
delivery and gene therapy. The MTAs are subject to strict
confidentiality which means the Company is limited in any
meaningful information it can divulge. Since the year end, work on
one of these MTAs has recently ceased as the partner has decided to
stop investigating alternative delivery systems to the one it is
already using in respect of the delivery of its proprietary Covid
pDNA plasmid. In addition, the Company has been informed by the
Gene Therapy MTA partner that, following the departure of the
individuals engaged on working on the MTA, they do not intend to
undertake any further work under the MTA. Work on the third MTA
continues.
The MTAs have shown us that the level of engagement is entirely
dependent on the personnel and resource deployed by partners which,
sometimes in very large organisations, can vary greatly and sees
the Company at the mercy of the partner as to timings and
advancement of such studies. However, the pursuit of MTAs remains a
key strategy as a means to see how Nuvec (R) may work with
proprietary technologies.
As soon as the Company is in a position to publicly disclose
material progression or otherwise in respect of MTAs it will do so.
In the meantime, it will only announce further MTAs when able to
without restrictions of confidentiality or in respect of a defined
commercial agreement.
Intellectual Property
2021 was a very productive year in the advancement of the
protection of our intellectual property. The University of
Queensland ("UQ") has seen the granting of (or notice of intention
to grant) patents now in Europe, Australia, Japan, China and in
January of this year the critical market of the US. N4 Pharma has
the exclusive worldwide rights to Nuvec(R) for therapeutic uses in
humans and animals.
Future Prospects
Following our most extensive in vivo work to date and the
commencement of MTAs in 2021 we have a clear focus in 2022 as to
where best to deploy our resources in the short term. As a result
of the very positive findings from the evaluation studies looking
at the potential of Nuvec(R) as a nano-carrier of a DNA plasmid
expressing TNFalpha, which demonstrated a significant inhibition of
tumour growth derived from a human cell line, the Company has
commenced work with Medicines Discovery Catapult to extend the
observations to allow us to identify suitable loads to add to
Nuvec(R) to take to clinic.
To date, the Company has established that Nuvec(R) can deliver
an appropriate biological load and this new study will help
determine the mechanism of action that produced the tumour
suppression. Amongst other things, it will seek to identify whether
the Nuvec(R) loaded with TNF alpha was directly taken up by the
tumour cells to produce the active TNF within the tumour or whether
other organs such as the liver took up the Nuvec(R) and produced
the TNF and released it systemically to suppress the tumour. If it
can be demonstrated that Nuvec(R) can selectively deliver the
plasmid to the tumour this may indicate the potential use of
Nuvec(R) to deliver to tumours with a reduced systemic effect and
inform the scope of any clinical studies or collaboration
discussions. In addition, studies will use labelled Nuvec (R)
particles to allow the organ and tissue distribution of Nuvec (R)
to be followed.
The Company is also in the process of identifying alternatives
to TNF as immunomodulators or gene therapy which may use Nuvec(R)
as a delivery system. The selection process is expected to conclude
shortly and the Company intends to conduct a study programme
similar to the work being undertaken using TNF.
The oncology, gene therapy and protein replacement markets are
huge and we believe will provide us with the quickest route for
Nuvec(R) to move into clinical trials with a product and far
quicker than with vaccines. That said, the potential for Nuvec's(R)
use in the delivery of vaccines remains but we feel any advance in
this area will be best done via MTAs. In addition, through our
grant with UQ, we continue our longer term proof of concept work in
respect of oral applications for Nuvec(R).
2021 has been a mixed year for the Company. We felt from the
outset it could be a pivotal year for the Company and believe it
has proved to be so. On the back of increased data and results we
are now in a position to narrow our focus onto the hugely exciting
oncology and gene therapy market. In parallel, we are working with
a number of MTA partners assessing how Nuvec(R) may enhance their
proprietary technologies. Whilst we are not there yet and it will
be results driven, our path to the commercialisation of Nuvec(R) is
clearer now than perhaps at any time previously.
The opportunity for Nuvec(R) as a delivery system for
immune-oncology is substantial. Market Watch 2022* highlights that
the global Immuno-oncology therapy market size is expected to grow
from $US 1.23 billion in 2020 to $US 1.65 billion by 2027; an
expected CAGR of 4.5% during 2022-2027.
* Immuno-oncology Therapy Market 2022 Research Report Analysis
by Competition, Countries Data, Sales, Revenue, Industry Size,
Share and Forecasted 2027
On behalf of the Board, I would like to thank all of our
shareholders for their continued patient support and look forward
to providing further updates on our progress.
By order of the Board
John Chiplin
Chairman
N4 Pharma Plc
Consolidated Statement of Comprehensive Income for the year
ended 31 December 2021
Notes 2021 2020
GBP GBP
------------ ------------
Research and development
costs (1,179,425) (900,410)
General and administration
costs (663,865) (664,011)
Operating loss for the year (1,843,290) (1,564,421)
Net finance income/(expenditure) 4 677 (1,963)
Loss for the year before
tax 5 (1,842,613) (1,566,384)
Taxation 6 298,267 261,541
Loss for the year after tax (1,544,346) (1,304,843)
Other comprehensive income
net of tax - -
Total comprehensive loss
for the year attributable
to equity owners of N4 Pharma
Plc (1,544,346) (1,304,843)
------------------------------------ ------ ------------ ------------
Loss per share attributable
to owners of the parent 12
Weighted average number of
shares:
Basic 181,080,349 136,303,141
Diluted (restated, see note
12) 181,080,349 136,303,141
Basic loss per share (0.85) (0.96)
Diluted loss per share (restated,
see note 12) (0.85) (0.96)
All results were derived from continuing operations.
N4 Pharma Plc
Consolidated Statement of Financial Position as at 31 December
2021
Notes 2021 2020
GBP GBP
Current assets
Trade and other receivables 8 558,359 270,837
Cash and cash equivalents 1,784,024 3,555,579
2,342,383 3,826,416
Total assets 2,342,383 3,826,416
----------------------------- ------ ------------- -------------
Liabilities
Current liabilities
Trade and other payables 9 (184,820) (142,484)
Accruals and deferred
income (27,910) (26,598)
----------------------------- ------ ------------- -------------
Total liabilities (212,730) (169,082)
----------------------------- ------ ------------- -------------
Total assets less
current liabilities 2,129,653 3,657,334
----------------------------- ------ ------------- -------------
Net assets 2,129,653 3,657,334
----------------------------- ------ ------------- -------------
Equity
Share capital 11 8,995,146 8,995,146
Share premium 11 13,945,602 13,945,602
Share option reserve 11 79,955 63,290
Reverse acquisition
reserve 11 (14,138,244) (14,138,244)
Merger reserve 11 279,347 279,347
Retained earnings 11 (7,032,153) (5,487,807)
----------------------------- ------ ------------- -------------
Total equity 2,129,653 3,657,334
----------------------------- ------ ------------- -------------
The Consolidated Financial Statements were approved by the Board
of Directors on 22 February 2022 and signed on its behalf:
Nigel Theobald
N4 Pharma Plc
Company Statement of Financial Position as at 31 December
2021
Notes 2021 2020
GBP GBP
------------- -------------
Assets
Non-current assets
Investments 7 1,094,747 1,094,747
Intercompany loan
receivable 14 5,259,000 3,659,000
----------------------------- ------ ------------- -------------
6,353,747 4,753,747
Current assets
Trade and other receivables 8 629,113 417,313
Cash and cash equivalents 1,538,615 3,411,817
2,167,728 3,829,130
Total assets 8,521,475 8,582,877
----------------------------- ------ ------------- -------------
Liabilities
Current liabilities
Trade and other payables 9 (8,966) (23,348)
Accruals and deferred
income (19,493) (19,790)
----------------------------- ------ ------------- -------------
Total liabilities (28,459) (43,138)
----------------------------- ------ ------------- -------------
Total assets less
current liabilities 8,493,016 8,539,739
----------------------------- ------ ------------- -------------
Net assets 8,493,016 8,539,739
----------------------------- ------ ------------- -------------
Equity
Share capital 11 8,995,146 8,995,146
Share premium 11 13,945,602 13,945,602
Share option reserve 11 79,955 63,290
Merger reserve 11 279,347 279,347
Retained earnings 11 (14,807,034) (14,743,646)
----------------------------- ------ ------------- -------------
Total equity 8,493,016 8,539,739
----------------------------- ------ ------------- -------------
The Company recorded a loss of GBP63,388 for the year (31
December 2020: GBP164,139 loss).
The Company Financial Statements were approved by the Board of
Directors on 22nd February 2022 and signed on its behalf:
Nigel Theobald
N4 Pharma Plc
Consolidated Statement of Changes in Equity for the year ended
31 December 2021
(i) Year ended Share Share premium Share option Reverse Merger Retained Total equity
31 December capital reserve acquisition reserve earnings
2021 reserve
GBP GBP GBP GBP GBP GBP GBP
---------- -------------- ------------- ------------- -------------- ------------ -------------
Balance at 1
January 2021 8,995,146 13,945,602 63,290 (14,138,244) 279,347 (5,487,807) 3,657,334
Total
comprehensive
loss for
the year - - - - - (1,544,346) (1,544,346)
Share issue - - - - - - -
Share based
payment
charge - - 16,665 - - - 16,665
---------- -------------- ------------- ------------- -------------- ------------ -------------
8,995,146 13,945,602 79,955 (14,138,244) 279,347 (7,032,153) 2,129,653
At 31 December
2021
---------- -------------- ------------- ------------- -------------- ------------ -------------
(ii) Year Share Share Share option Reverse Merger Retained Total equity
ended 31 capital premium reserve acquisition reserve earnings
December reserve
2020
GBP GBP GBP GBP GBP GBP GBP
----------- ------------- ------------- -------------- ------------- ------------ -------------
Balance at 1
January 2020 8,676,675 10,327,258 25,266 (14,138,244) 279,347 (4,182,964) 987,338
Total
comprehensive
loss for
the year - - - - - (1,304,843) (1,304,843)
Share issue 318,471 3,618,344 - - - - 3,936,815
Share based
payment
charge - - 38,024 - - - 38,024
At 31 December
2020 8,995,146 13,945,602 63,290 (14,138,244) 279,347 (5,487,807) 3,657,334
N4 Pharma Plc
Company Statement of Changes in Equity for the year ended 31
December 2021
(i) Year ended 31 Share capital Share Share option Merger reserve Retained earnings Total equity
December premium reserve
2021
GBP GBP GBP GBP GBP GBP
-------------- ----------- ------------- ---------------- ------------------ -------------
Balance at 1 January
2021 8,995,146 13,945,602 63,290 279,347 (14,743,646) 8,539,739
Total comprehensive
loss for
the year - - - - (63,388) (63,388)
Share issue - - - - - -
Share based payment
charge - - 16,665 - - 16,665
-------------- ----------- ------------- ---------------- ------------------ -------------
At 31 December
2021 8,995,146 13,945,602 79,955 279,347 (14,807,034) 8,493,016
(ii) Year ended 31 Share capital Share premium Share option Merger reserve Retained earnings Total equity
December reserve
2020
GBP GBP GBP GBP GBP GBP
-------------- -------------- ------------- --------------- ------------------ -------------
Balance at 1
January 2020 8,676,675 10,327,258 25,266 279,347 (14,579,507) 4,729,039
Total
comprehensive
loss for
the year - - - - (164,139) (164,139)
Share issue 318,471 3,618,344 - - - 3,936,815
Share based
payment charge - - 38,024 - - 38,024
At 31 December
2020 8,995,146 13,945,602 63,290 279,347 (14,743,646) 8,539,739
N4 Pharma Plc
Consolidated Statement of Cash Flows for the year ended 31
December 2021
2021 2020
Notes GBP GBP
----------------------------------- ------- ------------ --------------
Operating activities
Loss after tax (1,544,346) (1,304,843)
Finance expenditure and other
income (677) (1,963)
Share based payment charge 16,665 3,977
Taxation credit (298,267) (261,541)
Operating loss before changes
in working capital (1,826,625) (1,564,370)
Movements in working capital:
Decrease /(Increase) in trade
and other receivables 10,745 (30,534)
Increase in trade, other payables
and accruals 43,648 91,399
Cash used in operations (1,772,232) (1,503,595)
-------------------------------------------- ------------ --------------
Taxation paid - 120,507
Net cash flows used in operating
activities (1,772,232) (1,382,998)
-------------------------------------------- ------------ --------------
Financing activities
Finance expenditure and other
income 677 1,963
Net proceeds of ordinary share
issue - 3,970,862
Net cash flows from financing
activities 677 3,972,825
-------------------------------------------- ------------ --------------
Net (decrease) /increase in
cash and cash equivalents (1,771,555) 2,589,827
Cash and cash equivalents at
beginning of the year 3,555,579 965,752
Cash and cash equivalents at
31 December 1,784,024 3,555,579
N4 Pharma Plc
Company Statement of Cash Flows for the year ended 31 December
2021
2021 2020
GBP GBP
-------------------------------------------- ------------ ------------
Operating activities
Loss before tax (63,388) (164,139)
Interest (228,588) (153,045)
Share based payment charge 16,665 3,977
Impairment of investment - 100
Operating loss before changes in
working capital (275,311) (313,107)
Movements in working capital:
Increase in trade and other receivables (211,801) (170,268)
(Decrease) /Increase in trade and
other payables (14,678) 11,200
Cash used in operations (501,790) (472,175)
--------------------------------------------- ------------ ------------
Net cash flows used in operating
activities (501,790) (472,175)
--------------------------------------------- ------------ ------------
Investing activities
Loan receivable advancements (1,600,000) (1,000,000)
Net cash flows used in investing
activities (1,600,000) (1,000,000)
--------------------------------------------- ------------ ------------
Financing activities
Interest received 228,588 153,045
Net proceeds of ordinary share
issue - 3,970,862
Net cash flows from financing activities 228,588 4,123,907
--------------------------------------------- ------------ ------------
Net (decrease) /increase in cash
and cash equivalents (1,873,202) 2,651,732
Cash and cash equivalents at beginning
of the year 3,411,817 760,085
Cash and cash equivalents at 31
December 1,538,615 3,411,817
N4 Pharma Plc
Notes to the Consolidated Financial Statements for the year
ended 31 December 2021
1. Accounting policies
1.1 Reporting entity
N4 Pharma Plc (the "Company"), is the holding Company for N4
Pharma UK Limited ("N4 UK"), and together form the Group (the
"Group"). N4 Pharma UK Limited is a specialist pharmaceutical
company engaged in the development of mesoparticulate silica
delivery systems to improve the cellular delivery and potency of
vaccines . The nature of the business is not deemed to be impacted
by seasonal fluctuations and as such performance is expected to be
consistent.
The Company is domiciled in England and Wales and was
incorporated and registered in England and Wales on 6 July 1979 as
a public limited company and its shares are admitted to trading on
AIM (LSE: N4P). The Company's registered office is located at 6th
Floor, 60 Gracechurch Street, London, EC3V 0HR.
The Consolidated Financial Statements have been prepared in
accordance with UK-adopted international accounting standards and
applied to the Parent Company Accounts in accordance with the
provisions of the Companies Act 2006.
The Consolidated Financial Statements are presented in Great
British Pounds ("GBP" or "GBP"), rounded to the nearest GBP.
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in these
Consolidated Financial Statements.
The Company has taken advantage of the exemption granted by
Section 408 of the Companies Act 2006 from presenting its own
Income Statement. The loss generated by the Company is disclosed
under the Company Statement of Financial Position.
1.2 Measurement convention
The Consolidated Financial Statements are prepared on the
historical cost basis, except for the following items:
-- Share-based payments related to investment acquisition are
measured at fair value shown in the Merger Reserve.
-- Share-based payments related to employee costs are measured
at fair value shown in the Statement of Comprehensive Income.
-- The associated Share Options are measured at fair value using
the Black Scholes model (see note 9).
1.3 Going concern
These Consolidated Financial Statements have been prepared on
the basis of accounting principles applicable to a going concern.
The Directors consider that the Group will have access to adequate
resources, to meet the operational requirements for at least 12
months from the date of approval of these Consolidated Financial
Statements. For this reason, they continue to adopt the going
concern basis in preparing the Consolidated Financial
Statements.
The Group currently has no source of operating cash inflows,
other than interest and grant income, and has incurred net
operating cash outflows before tax for the year ended 31 December
2021 of GBP1,772,232 (2020: GBP1,503,595 outflow). At 31 December
2021, the Group had cash balances of GBP1,784,024 (2020:
GBP3,555,579) and a surplus in net working capital (current assets,
including cash, less current liabilities) of GBP2,129,653 (2020:
GBP3,657,334).
The Group prepares regular business forecasts and monitors its
projected cash flows, which are reviewed by the Board. Forecasts
are adjusted for reasonable sensitivities that address the
principal risks and uncertainties to which the Group is exposed,
thus creating a number of different scenarios for the Board to
challenge. In those cases, where scenarios deplete the Group's cash
resources too rapidly, consideration is given to the potential
actions available to management to mitigate the impact of one or
more of these sensitivities, in particular the discretionary nature
of costs incurred by the Group, in order to ensure the continued
availability of funds.
As the Group did not have access to bank debt and future funding
is reliant on issues of shares in the Parent Company, the Board has
derived a mitigation plan for the scenarios modelled as part of the
going concern review.
The Group continues to consider the current worldwide pandemic
("COVID-19") and the impact it may have on its operations. COVID-19
continued to not have any material negative impact on the
operations of the Group during the year and it is anticipated that
the Group will remain a going concern despite the unknown
developments of COVID-19.
On the basis of this analysis, the Board has concluded that
there is a reasonable expectation that the Company will have
adequate resources to continue in operational existence for the
foreseeable future being a period of at least 12 months from the
Consolidated Statement of Financial Position date.
1.4 Basis of consolidation
The consolidated Group financial statements consist of the
financial statements of Company together with the only entity
controlled by the parent company (its subsidiary), N4 UK.
All financial statements are made up to 31 December 2021. Where
necessary, adjustments are made to the financial statements of N4
UK to bring the accounting policies used into line with those used
by the Group.
All intra-group transactions, balances and unrealised gains on
transactions between Group companies are eliminated on
consolidation. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset
transferred.
Subsidiaries are consolidated in the Group's financial
statements from the date that control commences until the date that
control ceases.
1.5 Revenue
The Group has not recognised any revenue to date.
1.6 Government grant income
Government grants are recognised only when there is reasonable
assurance that the Group will comply with the conditions attaching
to them and that the grants will be received.
Government grants are recognised in the Consolidated Statement
of Comprehensive Income on a systematic basis over the periods in
which the Group recognises and expenses the related costs for which
the grants are intended to compensate.
Government grants that are receivable as compensation for
expenses or losses already incurred or for the purpose of giving
immediate financial support to the Group with no future related
costs are recognised in Consolidated Statement of Comprehensive
Income in the period in which they become receivable, and against
the associated cost.
1.7 Expenses
Financing income and expenses
Financing expenses comprise interest expense and finance
charges. Financing income comprises interest receivable on funds
invested.
Financing income and expenses are recognised in the Consolidated
Statement of Comprehensive Income as it accrues, using the
effective interest method.
Research and development
Research costs are charged against the Consolidated Statement of
Comprehensive Income as they are incurred. Certain development
costs will be capitalised as intangible assets when it is probable
that the future economic benefits will flow to the Group. Such
intangible assets will be amortised on a straight-line basis from
the point at which the assets are ready for use, over the period of
the expected benefit, and are reviewed for impairment at each year
end date. Other development costs are charged against income as
incurred since the criteria for their recognition as an asset is
not met.
The criteria for recognising expenditure as an asset are:
-- It is technically feasible to complete the product;
-- Management intends to complete the product and use or sell
it;
-- There is an ability to use or sell the product;
-- It can be demonstrated how the product will generate probable
future economic benefits;
-- Adequate technical, financial and other resources are
available to complete the development, use and sale of the product;
and
-- Expenditure attributable to the product can be reliably
measured.
The costs of an internally generated intangible asset comprise
all directly attributable costs necessary to create, produce and
prepare the asset to be capable of operating in the manner intended
by management. Directly attributable costs include employee costs
incurred on technical development, testing and certification,
materials consumed and any relevant third-party cost. The costs of
internally generated developments are recognised as intangible
assets and are subsequently measured in the same way as externally
acquired intangible assets. However, until completion of the
development project, the assets are subject to impairment testing
only.
To date, the criteria for recognition of an internally generated
intangible asset have not been met as explained in note 1.17.
1.8 Taxation
Taxation
Taxation for the year comprises current and deferred tax. Tax is
recognised in the Consolidated Statement of Comprehensive Income,
except to the extent that it relates to items recognised directly
in equity.
Current or deferred taxation assets and liabilities are not
discounted.
Current tax
Current tax is recognised at the amount of tax payable using the
tax rates and laws that have been enacted or substantively enacted
by the Consolidated Statement of Financial Position date.
Deferred tax
Deferred tax is recognised in respect of all timing differences
that have originated but not reversed at the Consolidated Statement
of Financial Position date.
Timing differences arise from the inclusion of income and
expenses in tax assessments in periods different from those in
which they are recognised in the Consolidated Financial Statements.
Deferred tax is measured using tax rates and laws that have been
enacted or substantively enacted by the year end and that are
expected to apply to the reversal of the timing difference.
Unrelieved tax losses and other deferred tax assets are
recognised only to the extent that it is probable that they will be
recovered against the reversal of deferred tax liabilities or other
future taxable profits.
1.9 Foreign Currencies
Monetary assets and liabilities denominated in foreign
currencies are translated into Sterling at the rate of exchange
ruling at the Consolidated Statement of Financial Position date.
Transactions in foreign currencies are translated at the rate of
exchange ruling at the date of the transaction. Foreign exchange
gains and losses are included in the Consolidated Statement of
Comprehensive Income.
1.10 Earnings per share
The Group presents basic and diluted earnings or loss per share
data for its ordinary shares. Basic earnings/loss per share is
calculated by dividing the profit or loss attributable to ordinary
shareholders of the Company by the weighted average number of
ordinary shares outstanding during the period, adjusted for own
shares held. Diluted earnings/loss per share is determined by
adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding,
adjusted for own shares held, for the effects of all dilutive
potential ordinary shares, which comprise of share options
granted.
1.11 Operating segments
The Group operated in one business segment, that of the
development and commercialisation of medicines via its delivery
system called Nuvec(R). No revenue has yet been generated by any of
the work undertaken by the Group.
The Directors consider that there are no identifiable business
segments that are subject to risks and returns different to the
core business. The information reported to the Directors, for the
purposes of resource allocation and assessment of performance, is
based wholly on the overall activities of the Group.
1.12 Presentation and classification of financial instruments issued by the Group
In accordance with IAS 32, financial instruments issued by the
Group are treated as equity only to the extent that they meet the
following two conditions:
(a) they include no contractual obligations upon the Group to
deliver cash or other financial assets or to exchange financial
assets or financial liabilities with another party under conditions
that are potentially unfavourable to the Group; and
(b) where the instrument will or may be settled in the Company's
own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the Company's own
equity instruments or is a derivative that will be settled by the
Company exchanging a fixed amount of cash or other financial assets
for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of
issue are classified as a financial liability. Where the instrument
so classified takes the legal form of the Company's own shares, the
amounts presented in these Consolidated Financial Statements for
called up share capital and share premium account exclude amounts
in relation to those shares.
Where a financial instrument that contains both equity and
financial liability components exists these components are
separated and accounted for individually under the above
policy.
1.13 Non-derivative financial instruments
Non-derivative financial instruments comprise investments, trade
and other receivables, cash and cash equivalents and trade and
other payables.
Investments
Investments are investments held in subsidiaries accounted for
at cost less provision for impairment under IAS 27.
Trade and other receivables
Trade and other receivables are recognised initially at fair
value. Subsequent to initial recognition they are measured at
amortised cost less impairment.
Trade and other payables
Trade and other payables are recognised initially at fair value.
Subsequent to initial recognition they are measured at amortised
cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and
comprise of cash at bank. Any overdrafts are shown within
borrowings in current liabilities.
1.14 Impairment
A financial asset not carried at fair value through profit or
loss is assessed at each reporting date to determine whether there
is objective evidence that it is impaired. A financial asset is
impaired if objective evidence indicates that a loss event has
occurred after the initial recognition of the asset, and that the
loss event had a negative effect on the estimated future cash flows
of that asset that can be estimated reliably.
An impairment loss in respect of a financial asset measured at
amortised cost is calculated as the difference between its carrying
amount and the present value of the estimated future cash flows
discounted at the asset's original effective interest rate.
Interest on the impaired asset continues to be recognised through
the unwinding of the discount. When a subsequent event causes the
amount of impairment loss to decrease, the decrease in impairment
loss is reversed through the Consolidated Statement of
Comprehensive Income.
The carrying amounts of the Group's non-financial assets are
reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the
asset's recoverable amount is estimated.
The recoverable amount of an asset is the greater of its value
in use and its fair value less costs to sell. In assessing value in
use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to the asset. For the purpose of impairment testing,
assets that cannot be tested individually are grouped together into
the smallest Group of assets that generates cash inflows from
continuing use that are largely independent of the cash inflows of
other assets or Groups of assets (the "cash-generating unit").
An impairment loss is recognised if the carrying amount of an
asset or its cash generating unit exceeds its estimated recoverable
amount. Impairment losses are recognised in profit or loss.
Impairment losses recognised in respect of cash generated units are
allocated first to reduce the carrying amount of any goodwill
allocated to the units, and then to reduce the carrying amounts of
the other assets in the unit (Group of units) on a pro rata
basis.
Impairment losses recognised in prior periods are assessed at
each reporting date for any indications that the loss has decreased
or no longer exists. An impairment loss is reversed if there has
been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the
asset's carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if
no impairment loss had been recognised.
1.15 Share based payment arrangements
Share-based payment arrangements in which the Group receives
goods or services as consideration for its own equity instruments
are accounted for as equity-settled share-based payment
transactions, regardless of how the equity instruments are obtained
by the Group.
Share-based payment transactions, other than those with
employees, are measured at the value of goods or services received
where this can be reliably measured. Where the services received
are not identifiable, their fair value is determined by reference
to the grant date fair value of the equity instruments provided.
Should it not be possible to measure reliably the fair value of
identifiable goods and services received, their fair value shall be
determined by reference to the fair value of the equity instruments
provided measured over the period of time that the goods and
services are received.
The expense is recognised in the Consolidated Statement of
Comprehensive Income or capitalised as part of an asset when the
goods are received or as services are provided, with a
corresponding increase in equity.
The grant date fair value of share-based payment awards granted
to employees is recognised as an employee expense, with a
corresponding increase in equity, over the period that the
employees become unconditionally entitled to the awards. The fair
value of the options granted is measured using an option valuation
model, taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of awards for which the
related service and non-market vesting conditions are expected to
be met, such that the amount ultimately recognised as an expense is
based on the number of awards that do meet the related service and
non-market performance conditions at the vesting date. For
share-based payment awards with non-vesting conditions, the grant
date fair value of the share-based payment is measured to reflect
such conditions and there is no "true-up" for differences between
expected and actual outcomes.
Share-based payment transactions in which the Group receives
goods or services by incurring a liability to transfer cash or
other assets that is based on the price of the Group's equity
instruments are accounted for as cash-settled share-based payments.
The fair value of the amount payable to recipients is recognised as
an expense, with a corresponding increase in liabilities, over the
period in which the recipients become unconditionally entitled to
payment. The liability is re-measured at each Consolidated
Statement of Financial Position date and at settlement date. Any
changes in the fair value of the liability are recognised in the
Consolidated Statement of Comprehensive Income.
1.16 Adoption of new and revised International Financial Reporting Standards
The following IFRS standards, amendments or interpretations
became effective during the year ended 31 December 2021 but have
not had a material effect on this Consolidated Financial
Information:
Standard
---------------------------------------------------------------------
Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS
9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) (effective periods beginning
on or after 1 January 2021)
---------------------------------------------------------------------
Covid 19-Related Rent Concessions Beyond 30 June 2021 (Amendment
to IFRS 16 Leases) (effective periods beginning on or after
1 April 2021)
All new standards and amendments to standards and
interpretations effective for annual periods beginning on or after
1 January 2021 that are applicable to the Group have been applied
in preparing these Consolidated Financial Statements.
The standards and interpretations that are issued, but not yet
effective, up to the date of issuance of the Consolidated Financial
Statements are disclosed below. The Group intends to adopt these
standards, if applicable, when they become effective.
Effective
Standard date
----------------------------------------------------------- ----------
Amendments to IFRS 3 Reference to the Conceptual 1 January
Framework 2022
Amendments to IAS 16 Property Plant and Equipment 1 January
(Proceeds before intended use) 2022
Amendments to IAS 37 Onerous Contracts (Cost of fulfilling 1 January
a contract) 2022
Amendments to IFRS 1, Annual Improvements to IFRS 1 January
Standards 2018-2020 2022
IFRS 9, IFRS 16 and
IAS 41
Amendments to IAS 1 Disclosure of accounting policies 1 January
2023
Amendments to IAS 8 Definition of accounting estimates 1 January
2023
Amendments to IAS 12 Deferred tax related to assets 1 January
and liabilities arising from 2023
a single transaction
The Directors are continuing to assess the potential impact that
the adoption of the standards listed above will have on the
Consolidated Financial Statements for the year ended 31 December
2022.
1.17 Use of estimates and judgements
The preparation of Consolidated Financial Statements in
conformity with IFRSs requires management to make certain
judgements, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets,
liabilities, income and expenses during the period. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected.
In the process of applying the Group's accounting policies, the
Directors have decided the following estimates and assumptions are
material to the carrying amounts of assets and liabilities
recognised in the Consolidated Financial Statements.
Critical judgements
Research and development expenditure
The key judgements surrounding the Research & Development
expenditure is whether the expenditure meets the criteria for
capitalisation. Expenditure will only be capitalised when the
recognition criteria is met and is otherwise written off to the
Consolidated Statement of Comprehensive Income. The recognition
criteria include the identification of a clearly defined project
with separately identifiable expenditure where the outcome of the
project, in terms of its technical feasibility and commercial
viability, can be measured or assessed with reasonable certainty
and that sufficient resources exist to complete a profitable
project. In the event that these criteria are met, and it is
probable that future economic benefit attributable to the product
will flow to the Group, then the expenditure will be
capitalised.
Impairment of investments and intercompany debtors
N4 UK has sustained losses and the Statement of Financial
position is in deficit. The recoverability of the intercompany
debtor and the cost of investment is dependent on the future
profitability and success of the entity, which is in a research
phase and has not therefore generated any revenue to date. Having
considered research progress during the year and future prospects
of N4 UK, the Directors do not consider that there are indicators
of impairment in respect of these balances. This is a significant
judgement.
2. Risk management
Overview
The Group has exposure to the following risks:
-- Credit risk;
-- Liquidity risk;
-- Tax risk;
-- Market risk; and
-- Operational risk
-- Regulatory and legislative risk
This note presents information about the Group's exposure to
each of the above risks, its objectives, policies and processes for
measuring and managing risk, and its management of capital. Further
quantitative disclosures are included throughout these Consolidated
Financial Statements.
Risk management framework
The Board has overall responsibility for the establishment and
oversight of the risk management framework and developing and
monitoring the Group's risk management policies. Key risk areas
have been identified and the Group's risk management policies and
systems will be reviewed regularly to reflect changes in market
conditions and the Group's activities.
The Audit Committee oversees how management monitors compliance
with the Group's risk management policies and procedures and
reviews the adequacy of the risk management framework in relation
to the risks faced by the Group.
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
bank deposits and receivables. See Note 13 for further detail. The
risk of non-collection is considered to be low. This risk is deemed
low at present due to the Group not yet trading and generating
revenue but is a consideration for future risks.
There is an intercompany debtor balance between the Company and
N4 UK. The recoverability of this debtor is dependent on the future
profitability of the entity. As N4 UK has sustained losses and the
Statement of Financial position is in deficit it is currently not
in a position to repay this amount and this therefore poses a
credit risk to the Company, but not to the Group.
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 always have sufficient
liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to the Group's reputation. The Group monitors cash
flow on a monthly basis through forecasting to help mitigate this
risk.
Tax risk
Any change in the Group's tax status or in taxation legislation
or its interpretations could affect the value of the investments
held by the Group or the Group's ability to provide returns to
shareholders or alter post-tax returns to shareholders.
Market risk and competition
The Group operates as a specialist pharmaceutical Company
engaged in the development of mesoparticulate silica delivery
systems to improve the cellular delivery and potency of vaccines.
The Group is entering into a market with existing competitors and
the prospect of new entrants entering the current market. There is
no guarantee that current competitors or new entrants to the market
will not appeal to a wider portion of the Group's target market or
command broader band awareness.
In addition, the Group's future potential revenues from product
sales will be affected by changes in the market price of
pharmaceutical drugs and could also be subject to regulatory
controls or similar restrictions.
Market risk is monitored continuously by the Group and the Board
reacts to any changes in market conditions as and when they
arise.
Operational risk
The Group is at an early stage of development and is subject to
several operational risks. The commencement of the Group's material
revenues is difficult to predict and there is no guarantee the
Group will generate material revenues in the future. The Group has
a limited operational history upon which its performance and
prospects can be evaluated and faces the risks frequently
encountered by developing companies. The risks include the
uncertainty as to which areas of pharmaceuticals to target for
growth.
Operational risk is managed by adapting the future plans of the
Group based on results and feedback from employees, suppliers and
contractors.
Regulatory and legislative risk
The operations of the Group are such that it is exposed to the
risk of litigation from its suppliers, employees and regulatory
authorities. Exposure to litigation or fines imposed by regulatory
authorities may affect the Group's reputation even though monetary
consequences may not be significant.
Any changes to regulations or legislation are reviewed by the
Board on a regular basis and the Group applies any that are
relevant accordingly.
Changes to legislation, regulations, rules and practices may
change and is often the case in the pharmaceutical industry which
is highly regulated and susceptible to regular change. Any changes
may have an adverse effect on the Group's operations.
Regulatory and legislative risk will become more significant
once the current research generates revenue.
Protection of intellectual property
The Group's ability to compete significantly relies upon the
successful protection of its intellectual property, in particular
its licenced and owned patent applications for Nuvec(R). The Group
seeks to protect its intellectual property through the filing of
worldwide patent applications, as well as robust confidentiality
obligations on its employees. However, this does not provide
assurance that a third party will not infringe on the Group's
intellectual property, release confidential information about the
intellectual property or claim technology which is registered to
the Group.
Capital management
The Group has no loans or borrowings and has sufficient
resources, in the view of the Directors, to meet its working
capital requirements for the next 12 months.
The Group manages its capital through the preparation of
detailed forecasts, and tracks actual receipts and outlays against
the forecasts on a regular basis, to ensure that the Group will be
able to continue as a going concern while maximising the return to
shareholders.
The capital structure of the Group consists of cash and cash
equivalents and equity comprising, capital, reserves and
accumulated losses.
3. Employees and directors
The average monthly number of employees during the year was 5
(2020: 5). The Directors of the Group are employed by both the
Company and N4 UK and as such are included in the employee figure.
Total Directors remuneration is detailed in Note 14 of these
Consolidated Financial Statements.
2021 2020
GBP GBP
Wages and Salaries 208,000 204,768
Social security costs 16,518 20,370
Pension costs - 219
-------- ---------
224,518 225,357
-------- ---------
4. Net finance income and (expenditure)
2021 2020
GBP GBP
Exchange rate losses - (813)
Bank charges - (1,150)
Interest received on financial assets 677 -
measured at amortised cost
------- --------
677 (1,963)
------- --------
5. Loss before tax
2021 2020
GBP GBP
Loss before taxation is arrived
after charging:
Fees payable to the Group's auditors
for the audit
of the Group's financial statements 24,675 21,600
------- -------
Other fees payable to auditors:
* Other assurance services - 4,500
------- -------
6. Taxation
2021 2020
GBP GBP
Current tax
Research and development tax credit
receivable for the current period (298,267) (214,884)
Adjustments in respect of prior
periods - (46,657)
---------- ----------
(298,267) (261,541)
---------- ----------
Deferred tax
Origination and reversal of temporary
differences - -
---------- ----------
Tax in income statement (298,267) (261,541)
---------- ----------
The tax charge for the year can be reconciled to the loss in the
Consolidated Statement of Comprehensive Income as follows:
2021 2020
GBP GBP
Loss before taxation (1,842,613) (1,566,384)
------------ ------------
Tax at the UK corporation tax rate
of 19% (2020: 19%) (350,096) (297,613)
Net Research and development tax
credits (298,267) (214,884)
Changes in unrecognised deferred
tax 350,096 297,613
Adjustments in respect of prior periods - (46,657)
------------ ------------
Tax charge for the year (298,267) (261,541)
------------ ------------
At the year end the Group had trading losses carried forward of
GBP9,011,815 (2020: GBP8,084,975) for use against future profits.
There are no other factors which may impact future tax charges. A
deferred tax asset has not been recognised on unrelieved trading
losses as the timing, extent and availability of future profits is
not yet certain
7. Investments
Investment in subsidiary
Company
2021 2020
Cost GBP GBP
Balance at 1 January 1,094,747 1,094,847
Impairment on dissolution - (100)
---------- ----------
Balance at 31 December 1,094,747 1,094,747
---------- ----------
Details of the Company's subsidiary at 31 December 2021 are as
follows:
Place of incorporation Principal activity Proportion of
and operation ownership and
voting rights
held
Delivery of
England and vaccines and
N4 Pharma UK Limited Wales therapeutics 100%
The accounting reference date of the subsidiary are co-terminous
with that of the Company. The registered office address and
principal place of business of N4 Pharma UK Limited is The Mills,
Canal Street, Derby, DE1 2RJ.
8. Trade and other receivables
Group Group Company Company
2021 2020 2021 2020
GBP GBP GBP GBP
Prepayments 7,013 16,009 6,514 15,320
VAT due 23,553 39,944 6,361 14,677
R&D tax credits receivable 513,151 214,884 - -
Interest receivable 677 - 611,838 382,916
Other debtors 13,965 - 4,400 4,400
-------- -------- -------- --------
558,359 270,837 629,113 417,313
-------- -------- -------- --------
Loan interest receivable relates to the intra-group loan
disclosed in Note 14.
9. Trade and other payables
Group Group Company Company
2021 2020 2021 2020
GBP GBP GBP GBP
Trade payables 180,346 116,871 7,848 -
Other payables 4,474 25,613 1,118 23,348
-------- -------- -------- --------
184,820 142,484 8,966 23,348
-------- -------- -------- --------
10. Share-based payments
Options
The Company has the ability to issue options to Directors to
compensate them for services rendered and incentivise them to add
value to the Group's longer-term share value. Equity settled
share-based payments are measured at fair value at the date of
grant. The fair value determined is charged to the Consolidated
Statement of Comprehensive Income on a straight-line basis over the
vesting period based on the Group's estimate of the number of
shares that will vest.
The vesting period is defined as the period in which the options
are unable to be exercised. The period commences on the date the
options are issued. For the options to vest, the holder must remain
an employee of the group throughout the vesting period. Once the
vesting period is complete the options may be exercised on any date
up to the lapse date.
Cancellations of equity instruments are treated as an
acceleration of the vesting period and any outstanding charge is
recognised in full immediately.
Fair value is measured using a Black Scholes pricing model. The
key assumptions used in the model at the grant date were adjusted
based on management's best estimate for the effects of
non-transferability, exercise restrictions and behavioral
considerations.
As at 31 December 2021, there were 7,046,513 (2020: 7,046,513)
options in existence over ordinary shares of the Company. Options
in existence during the current and/or previous financial year are
as follows:
Ordinary
shares Exercise
Date of under Vesting Expiry Price
Name Grant option Date Date GBP
2015 Options
Gavin Burnell 14.10.15 1,351,210 14.10.15 14.10.25 0.0280
Luke Cairns 14.10.15 675,302 14.10.15 14.10.25 0.0280
2017 Options
Luke Cairns 03.05.17 717,143 03.05.20 03.05.27 0.0700
David
Templeton 03.05.17 717,143 03.05.20 03.05.27 0.0700
Paul Titley 03.05.17 717,143 03.05.20 03.05.27 0.0700
2019 Options
John Chiplin 21.05.19 717,143 21.05.22 21.05.29 0.0355
Christopher
Britten 21.05.19 717,143 21.05.22 21.05.29 0.0355
2020 Options
David
Templeton 18.05.20 717,143 18.05.23 18.05.30 0.0480
Luke Cairns 18.05.20 717,143 18.05.23 18.05.30 0.0480
Total options 7,046,513
-----------
The weighted average remaining contractual life of the share
options outstanding as at 31 December 2021 was 5.93 years.
Share options outstanding:
Number
of shares
At 1 January 2020 7,679,370
Exercise of options (1,350,000)
Lapse of options (717,143)
Options granted 1,434,286
At 31 December 2020 7,046,513
Exercise of options -
Lapse of options -
Options granted -
At 31 December 2021 7,046,513
------------
Each option entitles the holder to subscribe for one ordinary
share in the Company. Options do not confer any voting rights on
the holder.
An amount of GBP16,665 has been recognised in the Consolidated
Statement of Comprehensive Income in relation to the share options
(2020: GBP3,977).
The aggregate fair value of the share options in issue was
GBP79,955 (2020 GBP63,290), with amounts recorded at each balance
sheet date being as follows:
2021 2020
GBP GBP
2015 Options 18,492 18,493
2017 Options 26,884 26,884
2019 Options 19,861 12,270
2020 Options 14,718 5,643
------- -------
79,955 63,290
------- -------
11. Capital and reserves
Issued, allotted and fully paid 2021 2020
GBP GBP
181,080,349 Ordinary Shares
of 0.4p each (2020: 181,080,349) 724,321 724,321
137,674,431 Deferred Shares
of 4p each (2020: 137,674,431) 5,506,977 5,506,977
279,176,540 Deferred Shares
of 0.99p each (2020: 279,176,540) 2,763,848 2,763,848
8,995,146 8,995,146
---------- ----------
All ordinary shares rank equally in all respects, including for
dividends, shareholder attendance and voting rights at meetings, on
a return of capital and in a winding-up.
Authorised ordinary shares at 31 December 2021 totalled
334,682,497 (2020:262,250,357).
The 137,674,431 deferred shares of 4p, have no right to
dividends nor do the holders thereof have the right to receive
notice of or to attend or vote at any general meeting of the
Company. On a return of capital or on a winding up of the Company,
the holders of the deferred shares shall only be entitled to
receive the amount paid up on such shares after the holders of the
ordinary shares have received their return on capital.
The 279,176, 540 deferred shares of 0. 99p shall be entitled to
receive a special dividend, which is payable upon the repayment to
the Company of any amount owed under certain loan agreements, after
which the Company shall, in priority to any distribution to any
other class of share, pay to the holders of the Special Deferred
Shares an aggregate amount equal to the amount repaid pro rata
according to the number of such shares paid up as to their nominal
value held by each shareholder. They shall be entitled to no other
distribution save for a special dividend and shall not be entitled
to receive notice of or attend or vote at a general meeting of the
Company. On a return of capital on a winding up of the Company,
they shall only be entitled to receive the amount paid up on such
shares up to a maximum of 0.9 pence per share after the holders of
the Ordinary Shares and the Deferred Shares have received their
return on capital .
Reserves
The equity structure presented in the Consolidated Financial
Statements reflects the equity structure of the Group, including
the equity instruments issued as part of the Reverse Takeover
transaction which occurred in 2017 and followed accounting
treatment in accordance with IFRS 2.
The reverse acquisition reserve and the merger reserve are
derived as part of the Reverse Takeover transaction and the
balances within these reserves have had no movement since the point
of the Reverse takeover in 2017.
Share premium reserve
The share premium reserve comprises the excess of consideration
received over the par value of the shares issued, plus the nominal
value of share capital at the date of redesignation at no par
value.
Share option reserve
The share option reserve comprises the fair value of warrants
and options granted, less the fair value of lapsed and expired
warrants and options.
Retained earnings
Retained earnings comprises of accumulated results of the Group
to date.
12. Earnings per share
The calculation of basic loss per share at 31 December 2021 was
based on the loss of GBP1,544,346 (2020: GBP1,304,843), and a
weighted average number of ordinary shares outstanding of
181,080,349 (2020:136,303,141), calculated as follows:
2021 2020
GBP GBP
Losses attributable to ordinary shareholders (1,544,346) (1,304,843)
Weighted average number of ordinary shares
Issued ordinary shares at 1 January 181,080,349 100,168,016
Effect of shares issued during the year - 36,135,125
------------ ------------
Weighted average number of shares at 31 December 181,080,349 136,303,141
------------ ------------
2021 pence 2020 pence
per share per share
Basic loss per share (0.85) (0.96)
----------- -------------
Diluted loss per share
Diluted earnings per share is calculated by adjusting the
weighted average number of shares outstanding to assume conversion
of all potential dilutive shares, namely share options. The
calculation of diluted loss per share at 31 December 2021 was based
on the loss of GBP1,544,346 (31 December 2020: GBP1,304,843), and a
weighted average number of ordinary shares outstanding of
181,080,349 (2020: 136,303,141).
2021 pence 2020 pence
per share per share
Diluted loss per share (0.85) (0.96)
----------- -----------
Management have reconsidered the effect of antidilutive
potential shares on the weighted average number of shares used in
the calculation of diluted EPS. Management have therefore restated
the prior year disclosure in respect of diluted weighted average
number of shares and diluted loss per share.
13. Risk management and analysis
(a) Credit risk
Financial risk management
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 and cash and cash equivalents. The carrying amount of
cash, cash equivalents and term deposits represents the maximum
credit exposure on those assets. The cash and cash equivalents are
held with UK bank and financial institution counterparties which
are rated at least A .
There is an intercompany debtor balance between the Company and
N4 UK. The recoverability of this debtor is dependent on the future
profitability of the entity. As N4 UK has sustained losses and the
Statement of Financial position is in deficit it is currently not
in a position to repay this amount and this therefore poses a
credit risk to the Company, but not to the Group.
Exposure to credit risk
The carrying amount of financial assets represents the maximum
credit exposure. Therefore, the maximum exposure to credit risk at
the reporting date of the Group was GBP2,342,383 (2020:
GBP3,826,416), being the total of the carrying amount of financial
assets, shown in the Consolidated Statement of Financial
Position.
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due.
The following are the contractual maturities of financial
liabilities, including estimated interest payments and excluding
the impact of netting agreements.
Group:
Financial liabilities Carrying Contractual 6 months 6-12 1 -2 years
amount cash flows or less months
GBP GBP GBP GBP GBP
31 December 2021
Trade and other
payables 184,820 184,820 184,820 - -
--------- ------------ --------- -------- -----------
31 December 2020
Trade and other
payables 142,484 142,484 142,484 - -
--------- ------------ --------- -------- -----------
Company:
Financial liabilities Carrying Contractual 6 months 6-12 1 -2 years
amount cash flows or less months
GBP GBP GBP GBP GBP
31 December 2021
Trade and other
payables 8,966 8,966 8,966 - -
--------- ------------ --------- -------- -----------
31 December 2020
Trade and other
payables 23,348 23,348 23,348 - -
--------- ------------ --------- -------- -----------
(c) Currency risk
The Group does not have significant exposure to foreign currency
risk at present. The Group does not have any monetary financial
instruments which are held in a currency that differs from that
entity's functional currency.
(d) Interest rate risk
Profile
At the reporting date the interest rate profile of
interest-bearing financial instruments was:
Carrying amount
Group:
2021 2020
GBP GBP
Variable rate instruments
---------- ----------
Cash and cash equivalents 1,784,024 3,555,579
---------- ----------
Carrying amount
Company:
2021 2020
GBP GBP
Variable rate instruments
---------- ----------
Cash and cash equivalents 1,538,615 3,411,817
---------- ----------
Cash flow sensitivity analysis for variable rate instruments
The Group's interest-bearing assets at the reporting date were
invested with financial institutions in the United Kingdom with a
S&P rating of A2 and comprised solely of bank accounts.
A change in interest rates would have increased/(decreased)
profit or loss by the amounts shown below. This analysis assumes
that all other variables remain constant. This analysis is
performed on the same basis for 2020.
Group: 2021 2020
Profit or loss Profit or loss
100 bp increase 100 bp decrease 100 bp increase 100 bp decrease
Variable rate instruments 17,840 (17,840) 35,555 (35,555)
---------------- ---------------- ---------------- ----------------
Company: 2021 2020
Profit or loss Profit or loss
100 bp increase 100 bp decrease 100 bp increase 100 bp decrease
Variable rate instruments 15,386 (15,386) 34,118 (34,118)
---------------- ---------------- ---------------- ----------------
14. Related parties
Key management personnel
The below remuneration relates to key management personnel,
there are no key management personnel employed by the Group in
addition to the Directors.
2021 2020
GBP GBP
Short-term employee benefits 224,518 225,357
Share based payments 16,665 3,977
-------- --------
241,183 229,334
-------- --------
Directors' remuneration and interests
The below remuneration relates to the Directors of the
Group.
2021 Remuneration Interests
Director Cash-based Share-based Totals Shares Options
payments payments
GBP GBP GBP No. No.
Nigel Theobald (Chief
Executive Officer) 75,000 - 75,000 16,981,319 -
David Templeton 45,000 4,538 49,538 - 1,434,286
Luke Cairns 40,000 4,537 44,537 142,857 2,109,588
Christopher Britten 24,000 3,795 27,795 - 717,143
John Chiplin 24,000 3,795 27,795 - 717,143
208,000 16,665 224,665 17,124,176 4,978,160
=========== ============ ======== =========== ==========
2020 Remuneration Interests
Director Cash-based Share-based Totals Shares Options
payments payments
GBP GBP GBP No. No.
Nigel Theobald (Chief
Executive Officer) 71,538 - 71,538 16,981,319 -
David Templeton 41,538 3,836 45,374 - 1,434,286
Luke Cairns 32,000 3,836 35,836 142,857 2,109,588
Christopher Britten 24,000 3,806 27,806 - 717,143
John Chiplin 24,000 3,806 27,806 - 717,143
----------- ------------ -------- ----------- ----------
193,076 15,284 208,360 17,124,176 4,978,160
=========== ============ ======== =========== ==========
No contributions are paid by the Group to a pension scheme on
behalf of the Directors.
Nigel Theobald is the Group's highest paid director (2020: Nigel
Theobald). His remuneration in each year is disclosed above.
N4 Pharma PLC has a loan receivable from N4 Pharma UK Limited at
31 December 2021 of GBP5,259,000 (2020: GBP3,659,000). It is
repayable in December 2025, accrues interest at a rate of 5% and is
unsecured.
There are no further related parties identified. There is no
ultimate controlling party of the Company or Group.
15. Retirement benefit schemes
The Group operates a defined contribution pension scheme for all
qualifying employees. The assets of the scheme are held separately
from those of the Group in an independently administered fund.
The charge to the profit and loss during the year in respect of
this scheme was GBPNil (2020:GBP219). The liability at the year end
amounted to GBPNil (2020:GBPNil).
16. Subsequent events
There have been no material events subsequent to the
Consolidated Statement of Financial Position date that require
adjustment or disclosure in these Consolidated Financial
Statements.
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END
FR BRGDDIBDDGDD
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