Company Registration No. 09910883
Belluscura plc
Annual report and financial statements
for the year 31 December 2020
Belluscura plc
Report and financial statements 2020
Contents
Page
Officers and professional advisers
Strategic report
Directors’ report
Statement of directors’ responsibilities in respect of the Strategic Report, the Directors’ Report and the
Financial Statements
Independent Auditor’s report to the members of Belluscura plc
Consolidated Statement of Profit and Loss and other Comprehensive Income
Consolidated Balance sheet
Company Balance sheet
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of cash flows
1
2-3
4-5
6
7-9
10
11
12
13
14
15
Notes to the accounts
16-38
Belluscura plc
Report and financial statements 2020
Officers and professional advisers
Robert Rauker
Anthony Stephen Dyer
Registered Office
15 Fetter Lane
Holborn
London
EC4A 1BW
Auditor
KPMG LLP
Gateway House
Tollgate
Chandler's Ford
Eastleigh
Southampton
SO53 3TG
Banks
Barclays Bank Plc
1 Churchill Place
London
E14 5HP
Comerica Bank
PO Box 650282
Dallas
Texas
TX 75265-0282
Solicitor
DWF
20 Fenchurch Street
London
EC3M 3AG
1
Belluscura plc
Strategic report for the year ended 31 December 2020
The Directors present their strategic report on the Group for the year ended 31 December 2020.
The principal activity of the parent company is that of a holding management company and that of the Group is to develop and
commercialise in oxygen related medical device products. This is achieved by using its proprietary oxygen enrichment
technologies to advance the use of oxygen in medical products.
Review of the Business
Belluscura is a private English company founded on the principle of making healthcare both more affordable and more available
while returning a strong profit to our shareholders.
In February 2017, the Company entered into a co-exclusive license and development agreement with Separation Design Group
(“SDG”) to complete the development of the X-PLORTM, a portable oxygen concentrator, used to deliver concentrated oxygen
to a patient requiring oxygen therapy. Belluscura and SDG delivered a working prototype within five months of acquiring the
X-PLORTM license. X-PLORTM received 510k clearance from the FDA on 2 March 2021. The Company expect to launch the
product in H1 2021.
The Company has also developed follow-on products for the X-PLORTM range of oxygen concentrators, the X-PLOR CXTM and
X-PLOR DXTM, which will target the same oxygen markets and believe they can commercialise these products in H2 2021 and
H1 2022 respectively. The Company continues to work on other oxygen enrichment technologies in complementary markets.
The Company has taken the strategic decision to focus purely on the oxygen enrichment marketplace and divested its existing
products in 2019. The Company retains the licence to the SNAP IIITM with a view to exploring future commercialisation
opportunities, but due to the uncertainty of timescales, it has fully impaired this licence.
As the business mainly operates in the US through its subsidiary Belluscura LLC the Company does not perceive any near
term risk of Brexit impacting the Group.
Current Trading and Outlook
The Directors believe that the major opportunities lie with the X-PLORTM and complementary technologies.
The Directors believe that X-PLORTM, when launched, will provide significant growth for the Group. It is expected that the
longer-term health impact of the Covid-19 pandemic will increase demand for long term oxygen therapy and accelerate the
growth in the market. Forecast of the supplementary oxygen market now expected it to reach $5.74bn by 2026.
The Directors believe the Group has made solid progress in achieving its mission.
Financial review
The Group is still in its early stages of development. Funds raised from investors are being applied to pursuing our strategic
objectives. We continue to be primarily focussed on completing the X-PLORTM.
Group sales for the period to 31 December 2020 were US $nil (2019: $128,701) with losses of US $1,978,145 (2019: $1,551,996).
Group net assets at the end of the period were US $4,668,864 (2019: $3,727,929).
Principal Risks and Uncertainties
The Group actively considers and manages its risks. The Directors consider the following areas of business and operational risk
and details how this risk is managed or mitigated:
• Generating revenue. The Group was formed in 2015 and is still in start-up phase. Having divested its existing products in
2019, the Group’s focus is on the commercialisation of X-PLORTM in H2 2021 Management performs regular reviews of
the sector to ensure it is targeting large markets.
• Successful product development. The Group received FDA 510k clearance for X-PLORTM on 2 March 2021. The Group’s
follow-on products are in advanced development and are based upon the same technology as X-PLORTM.
• Credit risk. The Group’s principal financial assets are cash, and trade and other receivables. The Group monitors receivables
and should any be the subject of an identified loss event, allowance is made for impairment if required. At the end of the
period the Group had no customers. The credit risk on liquid funds is limited because the counterparties are banks with high
credit-ratings assigned by international credit-rating agencies. Further, apart from intercompany consolidated transactions
the Group has no current debt outstanding.
2
Belluscura plc
• Liquidity risk. To support expansion plans for future development, the Group regularly reviews its financing arrangements
and cash flows to ensure there is sufficient funding in place.
• Foreign exchange risk. As the Group holds Sterling cash deposits and reports its financial performance in US Dollars, this
exposes the Group to a potential unrealised currency risk on its Sterling bank balances. This relates to the raising of capital
in the United Kingdom. The Directors review this exposure on a regular basis.
COVID-19
The Board have reviewed and assessed the impact of the COVID-19 pandemic on the Group. This did result in the FDA
clearance process being elongated, however clearance was received on 2 March 2021. The longer-term impact on oxygen
requirements for recovering COVID-19 patients is yet unknown, however the Group believes that there will be increased
demand for oxygen related devices globally. The Group will continue to develop innovative advanced oxygen solutions.
Analysis of Financial and non-Financial Key Performance Indicators
The Board continues to monitor performance regularly throughout the year by reviewing a range of key performance indicators.
These include revenue growth, progress towards operational break even, and expenditure control against budget.
The Directors expect further improvement in performance in future periods as it achieves success in the Group’s strategy to
launch its products and grow through continual investment.
By Order of the Board
A S Dyer
Chief Financial Officer
27 April 2021
3
Belluscura plc
Directors’ report for the year ended 31 December 2020
The Directors present their annual report and the audited financial statements for the year ended 31 December 2020.
Research and development
The Group continues to invest in the development of the X-PLORTM range of products.
Proposed dividend
No dividend was paid or was proposed during the period ended 31 December 2020.
Directors
The following Directors held office during the period, and to the date of this report.
Robert Rauker
Anthony Stephen Dyer
(appointed 18 August 2016)
(appointed 13 November 2017)
Going concern
In adopting the going concern basis for preparing the financial statements, the directors have considered the principal activities
as well as the business risks as set out on pages 2 to 3.
The Group made a loss of US $1,978,145 in the period to 31 December 2020 (2019: loss of US $1,551,996). At the balance sheet
date the Group had net assets of US $4,668,864 (2019: US $3,727,929) and utilised net operating cash outflows of $1,470,773
(2019: US $1,002,377).
The Company raises the funds required for the Group’s activities and has successfully undertaken several Private Funding rounds
raising over $13,500,000 to date to support the Group. During the reporting period, funding rounds raised approximately $2.7m.
This cash has allowed the Group to continue to trade, complete FDA 510k clearance of the X-PLORTM portable oxygen
concentrator and continue the development of its follow-on products, the X-PLORTM CX and the X-PLORTM DX portable oxygen
concentrators. The Company is targeting commercial launch of X-PLORTM in H1 2021.
Since the period end the Group has raised $2.7m equity from new and existing shareholders which will allow the business to
continue to trade. Further equity fundraising is planned in 2021 to support the commercial launch of X-PLORTM. The Group has
a number of private shareholders who have been supportive during all fundraisings to date and believe that, given FDA clearance
of X-PLORTM, they will continue to be supportive. As with any company placing reliance on shareholders for financial support,
the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these
financial statements, they have no reason to believe that it will not do so.
The Group expects that due to the close link of the COVID-19 virus to Oxygen Therapy requirements the prospects for the Group
going forward to be enhanced by an increase in the requirement for Oxygen related products.
The Group’s forecasts and projections, including the intention to raise further funds on the public markets to commercialise the
X-PLORTM, indicate that the Group has sufficient cash reserves to operate within the level of its current facilities for a period of
12 months from the date of approval of the financial statements. The Group's forecasts and projections, taking account of
reasonably possible downsides in trading performance and development costs/timelines, and the risks to these projections (set
out in the Principal Risks and Uncertainties section of the Group Strategic Report on Page 3) have been considered in the
assessment of these forecasts.
Whilst the directors expect that further equity raising will be successful, to the extent it is not, the directors believe that the most
likely alternative will be to curtail its operations, halt development and delay commercialisation whilst looking for alternative
source of funding. In the unlikely situation where this is also unsuccessful, the Group may cease further development of the X-
PLORTM range and seek potential purchasers of the company or the IP intrinsically linked to the X-PLORTM, in which case the
application of the going concern basis of preparation may be inappropriate.
Based on the above, the directors believe it remains appropriate to prepare the financial statements on a going concern basis.
However, these circumstances represent a material uncertainty that may cast significant doubt upon the group and company’s
ability to continue as a going concern and, therefore to continue realising its assets and discharging its liabilities in the normal
course of business. The financial statements do not include any adjustments that would result from the basis of preparation being
inappropriate.
4
Belluscura plc
Directors’ report for the year ended 31 December 2020 (continued)
Political contributions
Neither the Company nor any subsidiaries made any political donations or incurred any political expenditure during the period.
Remuneration report (this is a voluntary unaudited disclosure note)
Directors’ Emoluments
Period to 31 December 2020
Robert Rauker
Anthony Dyer
Period to 31 December 2019
Robert Rauker
Anthony Dyer
Directors’ beneficial interests in shares
Robert Rauker
Anthony Dyer
Disclosure of information to auditor
Salary &
fees
US $
200,000
170,310
370,310
Salary &
fees
US $
185,000
142,804
327,804
Benefits
in kind
US $
31,105
2,920
34,025
Benefits
in kind
US $
33,666
2,534
36,200
Pension
US $
-
-
-
Pension
US $
-
-
-
2020
Total
US $
231,105
173,230
404,335
2019
Total
US $
218,666
145,338
364,004
As at 31
December
2020
No of Shares
1,176,628
636,941
As at 31
December
2019
No of Shares
1,016,628
636,941
The directors who held office at the date of approval of this directors’ report confirm that, so far as they are each aware, there is
no relevant audit information of which the company’s auditor is unaware; and each director has taken all the steps that he ought
to have taken as a director to make himself aware of any relevant audit information and to establish that the company’s auditor
is aware of that information.
Other information
An indication of likely future developments in the business and particulars of significant events which have occurred since the
end of the financial year have been included in the Strategic Report on page 2.
Auditor
In accordance with Section 489 of the Companies Act 2006, a resolution for the re-appointment of KPMG LLP as auditor of the
company is to be proposed at the forthcoming Annual General Meeting.
By order of the Board of Directors and signed on behalf of the Board
Robert Rauker
Chief Executive Officer
27 April 2021
5
Belluscura plc
Statement of directors’ responsibilities in respect of the Strategic Report, the Directors’ Report and
the Financial Statements
The directors are responsible for preparing the Strategic Report, the Directors’ Report and the group and parent company
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare group and parent company financial statements for each financial year. Under
that law they have elected to prepare the group financial statements in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRSs as adopted by the EU) and applicable law and have elected to prepare the
parent company financial statements in accordance with UK accounting standards and applicable law (UK Generally Accepted
Accounting Practice), including FRS 101 Reduced Disclosure Framework.
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 group and parent company and of their profit or loss for that period. In preparing each of the
group and parent company financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
•
• make judgements and estimates that are reasonable, relevant, reliable and prudent;
•
•
for the group financial statements, state whether they have been prepared in accordance with IFRSs as adopted by the EU;
for the parent company financial statements, state whether applicable UK accounting standards have been followed, subject
to any material departures disclosed and explained in the financial statements;
assess the group and parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern; and
use the going concern basis of accounting unless they either intend to liquidate the group or the parent company or to cease
operations or have no realistic alternative but to do so.
•
•
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent
company’s transactions and disclose with reasonable accuracy at any time the financial position of the parent company and
enable them to ensure that its financial statements comply with the Companies Act 2006. They are responsible for such internal
control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard
the assets of the group and to prevent and detect fraud and other irregularities.
6
Independent auditor’s report to the members of Belluscura plc
Opinion
We have audited the financial statements of Belluscura plc (“the company”) for the year ended 31 December 2020 which
comprise the Consolidated Statement of Profit and Loss and Other Comprehensive Income, Consolidated Balance Sheet,
Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated
Statement of Cashflows and related notes, including the accounting policies in note 2.
In our opinion:
•
the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31
December 2020 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006;
the parent company financial statements have been properly prepared in accordance with UK accounting standards,
including FRS 101 Reduced Disclosure Framework; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
•
•
•
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the group in
accordance with, UK ethical requirements including the FRC Ethical Standard. We believe that the audit evidence we have
obtained is a sufficient and appropriate basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 2.1.2 to the financial statements, which indicates that the group and company’s ability to continue as
a going concern is dependent on a further equity fundraise in 2021. These events and conditions, along with the other matters
explained in note 2.1.2, constitute a material uncertainty that may cast significant doubt on the group’s and the parent company’s
ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
Going concern
The directors have prepared the financial statements on the going concern basis. As stated above, they have concluded that a
material uncertainty related to going concern exists.
Based on our financial statements audit work, we consider that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
In our evaluation of the directors’ conclusions, we considered the inherent risks to the group’s business model and analysed how
those risks might affect the group and company’s financial resources or ability to continue operations over the going concern
period.
Our conclusions based on this work:
• we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is
appropriate;
• we have identified, and concur with the directors’ assessment that there is, a material uncertainty related to events or
conditions that, individually or collectively, may cast significant doubt on the group or the company's ability to continue as
a going concern for the going concern period.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are
inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that
the group or the company will continue in operation
7
Independent auditor’s report to the members of Belluscura plc (continued)
Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
• Enquiring of directors and inspection of policy documentation as to the Group’s/Company’s high-level policies and
procedures to prevent and detect fraud, as well as whether they have knowledge of any actual, suspected or alleged fraud.
• Reading Board/ general meeting minutes.
• Considering remuneration incentive schemes for management/ directors.
• Using analytical procedures to identify any unusual or unexpected relationships.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the
audit
As required by auditing standards, and our overall knowledge of the control environment, we perform procedures to address the
risk of management override of controls, in particular the risk that Group/ Company management may be in a position to make
inappropriate accounting entries and the risk of bias in accounting estimates and judgements such as provision for impairment
of intangibles and provision of intercompany receivables in the parent’s Company books. On this audit we do not believe there
is a fraud risk related to revenue recognition because of Nil revenue.
We did not identify any additional fraud risks.
In determining the audit procedures we took into account the results of our evaluation and testing of the operating effectiveness
of some of the Group/Company-wide fraud risk management controls.
We also performed procedures including:
•
Identifying journal entries to test based on risk criteria and comparing the identified entries to supporting documentation.
These included those posted to unusual accounts.
Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements
from our general commercial and sector experience and through discussion with the directors (as required by auditing standards),
and discussed with the directors the policies and procedures regarding compliance with laws and regulations.
As the Group/Company is regulated, our assessment of risks involved gaining an understanding of the control environment
including the entity’s procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance
throughout the audit.
The potential effect of these laws and regulations on the financial statements varies considerably.
The Group/Company is subject to laws and regulations that directly affect the financial statements including financial reporting
legislation (including related companies legislation), distributable profits legislation, and taxation legislation and we assessed
the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Whilst the Group/Company is subject to many other laws and regulations, we did not identify any others where the consequences
of non-compliance alone could have a material effect on amounts or disclosures in the financial statement
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with
auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and
transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards
would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect
material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-
compliance with all laws and regulations.
8
Independent auditor’s report to the members of Belluscura plc (continued)
Strategic report and directors’ report
The directors are responsible for the strategic report and the directors’ report. Our opinion on the financial statements does not
cover those reports and we do not express an audit opinion thereon.
Our responsibility is to read the strategic report and the directors’ report and, in doing so, consider whether, based on our financial
statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit
knowledge. Based solely on that work:
• we have not identified material misstatements in the strategic report and the directors’ report;
•
•
in our opinion the information given in those reports for the financial period is consistent with the financial statements; and
in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Matters on which we are required to report by exception
Under the Companies Act 2006, we are required to report to you if, in our opinion:
•
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been
received from branches not visited by us; or
•
the parent company financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
Directors’ responsibilities
As explained more fully in their statement set out on page 6, the directors are responsible for: the preparation of the financial
statements and for being satisfied that they give a true and fair view; such internal control as they determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing
the group and parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern;
and using the going concern basis of accounting unless they either intend to liquidate the group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level
of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial
statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company’s members, as a body, for our audit work, for this report, or
for the opinions we have formed.
William Smith (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
Gateway House, Tollgate, Chandler's Ford,
Eastleigh, Southampton. SO53 3TG
27 April 2021
9
Belluscura plc
Consolidated Statement of Profit and Loss and Other Comprehensive Income
For the year ended 31 December 2020
Group
Continuing Operations
Revenue
Cost of sales
Gross Profit/(Loss)
Other operating income
Administrative expenses
Operating Loss
Finance costs
Finance costs - net
Loss before income tax
Income tax expense
Note
5
6.1a
6.1b
8
9
Loss after tax for the period
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss:
Foreign currency translation differences – foreign operations
Total other comprehensive income
Total comprehensive loss for the period
attributable to the equity holders
Year ended
31 December
2020
US $
Year ended 31
December
2019
US $
-
-
-
128,701
(114,385)
14,316
11,493
(1,956,682)
(1,945,189)
44,368
(1,573,479)
(1,514,795)
(32,956)
(37,201)
(32,956)
(37,201)
(1,978,145)
(1,551,996)
-
-
(1,978,145)
(1,551,996)
391,737
391,737
373,742
373,742
(1,586,408)
(1,178,254)
The Group has used the exemption under S408 CA 2006 not to disclose the company income statement.
Items in the statement above are disclosed net of tax.
The notes on pages 16 to 38 are an integral part of these consolidated financial statements.
10
Belluscura plc
Consolidated Balance Sheet
At 31 December 2020
Group
Note
Assets
Non-current assets
Tangible assets
Intangible assets
Product development
Right to use asset
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Non-current liabilities
Trade and other payables
Total liabilities
Net assets
Equity attributable to the owners of the
parent
Share capital
Share premium
Capital contribution
Retained earnings
Translation reserve
Total equity
11
12
12
11
14
15
19
19
17
17
18
18
18
As at
31 December
2020
US $
As at
31 December
2019
US $
13,818
-
4,129,660
375,852
4,519,330
22,361
-
2,935,228
473,901
3,431,490
197,653
520,070
717,723
64,575
1,033,512
1,098,087
5,237,053
4,529,577
(230,136)
(230,136)
(385,325)
(385,325)
(338,053)
(338,053)
(416,323)
(416,323)
(568,189)
(801,648)
4,668,864
3,727,929
823,201
556,683
165,000
2,687,361
436,619
648,298
5,714,678
165,000
(2,844,929)
44,882
4,668,864
3,727,929
The notes on pages 16 to 38 are an integral part of these financial statements.
The financial statements on pages 10 to 38 were authorised for issue by the Board of Directors on 27 April 2021 and were signed
on its behalf.
Robert Rauker
Chief Executive Officer
A S Dyer
Chief Financial Officer
Belluscura plc
registered number 09910883
11
Belluscura plc
Company Balance Sheet
At 31 December 2020
Company
Note
Assets
Non-current assets
Intangible assets
Investment in subsidiaries
Trade and other receivables
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Total liabilities
Net assets
Equity attributable to the owners of the
parent
Share capital
Share premium
Capital contribution
Retained earnings
Translation reserve
Total equity
12
10
14
14
15
19
17
17
18
18
18
As at
31 December
2020
US $
As at
31 December
2019
US $
-
10
6,245,745
6,245,755
-
10
4,678,768
4,678,778
187,681
317,606
505,287
8,955
814,424
823,379
6,751,042
5,502,157
(62,907)
(62,907)
(84,004)
(84,004)
(62,907)
(84,004)
6,688,135
5,418,153
823,201
556,683
165,000
4,706,632
436,619
648,298
5,714,678
165,000
(1,154,705)
44,882
6,688,135
5,418,153
The notes on pages 16 to 38 are an integral part of these financial statements.
The financial statements on pages 10 to 38 were authorised for issue by the Board of Directors on 27 April 2021 and were signed
on its behalf.
Robert Rauker
Chief Executive Officer
Belluscura plc
registered number 09910883
A S Dyer
Chief Financial Officer
12
Belluscura plc
Consolidated Statement of Changes in Equity
For the year ended 31 December 2020
Attributable to equity holders of the parent company
Group
Balance at 31 December 2018
Issue of ordinary shares
Reduction in capital
Loss for the period
Other comprehensive income
Total comprehensive income
Share based payments
Note
17
18
18
18
Ordinary
Shares
US $
456,107
192,191
-
Share Premium
US $
3,304,432
2,410,246
-
-
-
-
-
-
-
-
-
Translation
Reserve
US $
(328,860)
-
-
-
373,742
373,742
-
Capital
Contribution
US $
165,000
-
-
-
-
-
-
Retained
earnings
US $
(1,298,819)
-
-
(1,551,996)
-
(1,551,996)
Total
US $
2,297,860
2,602,437
-
(1,551,996)
373,742
(1,178,254)
5,886
5,886
Balance at 31 December 2019
648,298
5,714,678
44,882
165,000
(2,844,929)
3,727,929
Balance at 31 December 2019
Issue of ordinary shares
Reduction in capital
Loss for the period
Other comprehensive income
Total comprehensive income
Share based payments
17
18
18
18
648,298
174,903
-
5,714,678
2,233,896
(7,391,891)
-
-
-
-
-
-
-
-
44,882
-
-
-
391,737
391,737
-
165,000
-
-
(2,844,929)
-
7,391,891
3,727,929
2,408,799
-
-
-
-
-
(1,978,145)
-
(1,978,145)
(1,978,145)
391,737
(1,586,408)
118,544
118,544
Balance at 31 December 2020
823,201
556,683
436,619
165,000
2,687,361
4,668,864
There is no impact to the reserves of the Group through adoption of IFRS16.
The notes on pages 16 to 38 are an integral part of these financial statements.
13
Belluscura plc
Company Statement of Changes in Equity
For the period ended 31 December 2020
Company
Balance at 31 December 2018
Issue of ordinary shares
Reduction in capital
Loss for the period
Other comprehensive income
Total comprehensive income
Share based payments
Note
17
18
18
18
Attributable to owners of the parent company
Ordinary
Shares
US $
456,107
192,191
-
Share Premium
US $
Translation
Reserve
US $
3,304,432
2,410,246
-
(328,828)
-
-
Capital
Contributio
n
US $
165,000
-
-
Retained
earnings
US $
31,485
-
-
Total Equity
US $
3,628,196
2,602,437
-
-
-
-
-
-
-
-
-
-
373,710
373,710
-
-
-
-
-
(1,192,076)
-
(1,192,076)
(1,192,076)
373,710
(818,366)
5,886
5,886
Balance at 31 December 2019
648,298
5,714,678
44,882
165,000
(1,154,705)
5,418,153
Balance at 31 December 2019
Issue of ordinary shares
Reduction in capital
Loss for the period
Other comprehensive income
Total comprehensive income
Share based payments
17
18
18
18
648,298
174,903
-
5,714,678
2,233,896
(7,391,891)
44,882
-
-
165,000
-
-
(1,154,705)
-
7,391,891
5,418,153
2,408,799
-
-
-
-
-
-
-
-
-
-
391,737
391,737
-
-
-
-
-
(1,649,098)
-
(1,649,098)
(1,649,098)
391,737
(1,257,361)
118,544
118,544
Balance at 31 December 2020
823,201
556,683
436,619
165,000
4,706,632
6,688,135
The notes on pages 16 to 38 are an integral part of these financial statements.
14
Belluscura plc
Consolidated Statement of cash flows
For the period ended 31 December 2020
Group
Note
Cash flows from operating activities
Cash generated from operations
Taxation paid
Net cash used in operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Intangible assets under development
Sale of product licence
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issuance of ordinary shares (net)
Lease Payments
Net cash generated from financing activities
Net (decrease)/increase in cash and cash
equivalents
Cash and cash equivalents at beginning of period
Exchange loss on cash and cash equivalents
23
11
12
17
21
For the
period ended
31 December
2020
US $
For the period
ended
31 December
2019
US $
(1,470,773)
-
-
(1,470,773)
(1,002,377)
-
(1,002,377)
-
(1,194,432)
-
(1,194,432)
(2,547)
(1,120,285)
44,368
(1,078,464)
2,251,774
(118,859)
2,132,915
2,655,751
(105,348)
2,550,403
(532,290)
1,033,512
18,848
469,562
532,248
31,702
Cash and cash equivalents at end of period
520,070
1,033,512
The notes on pages 16 to 38 are an integral part of these financial statements.
15
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
1.
General Information
Belluscura plc is a company incorporated in England and Wales and domiciled in the UK. Company Registration No.
09910883. On 28 November 2017 the company changed its name from Belluscura Limited to Belluscura plc. The address
of the registered office is detailed on page 1 of these financial statements.
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied, unless otherwise stated.
2.
Accounting Policies
2.1 Statement of compliance
The group financial statements consolidate those of the Company and its subsidiaries (together referred to as the “Group”).
The parent company financial statements present information about the Company as a separate entity and not about its
group.
The group financial statements have been prepared and approved by the directors in accordance with international
accounting standards in conformity with the requirements of the Companies Act 2006 (‘‘Adopted IFRSs’’). The
Company has elected to prepare its parent company financial statements in accordance with FRS 101.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates.
Critical accounting estimates and judgements made by the directors, in the application of these accounting policies that
have significant effect on the financial statements are disclosed in note 4 (a)-(c) applicable for the whole Group and 4 (d)
applicable for the Company only.
The Company financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced
Disclosure Framework (“FRS 101”). The amendments to FRS 101 (2014/15 Cycle) issued in July 2015 have been
applied.
In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements
of international accounting standards in conformity with the requirements of the Companies Act 2006 (“Adopted IFRSs”)
but makes amendments where necessary in order to comply with Companies Act 2006 and has set out below where
advantage of the FRS 101 disclosure exemptions has been taken.
Under section s408 of the Companies Act 2006 the company is exempt from the requirement to present its own profit and
loss account.
In these financial statements, the company has applied the exemptions available under FRS 101 in respect of the following
disclosures:
a Cash Flow Statement and related notes;
•
• Disclosures in respect of transactions with wholly owned subsidiaries;
• Disclosures in respect of capital management;
• The effects of new but not yet effective IFRSs; and
• Disclosures in respect of the compensation of Key Management Personnel;
As the consolidated financial statements include the equivalent disclosures, the Company has also taken the exemptions
under FRS 101 available in respect of the following disclosures
• Certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial
Instrument Disclosures.
•
IFRS 2 Share Based Payments in respect of group settled share based payments
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in
these financial statements
2.1.1 Measurement convention
The financial statements are prepared on the historical cost basis except that assets and liabilities are stated at their fair
value.
16
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
2.1.2 Going concern
In adopting the going concern basis for preparing the financial statements, the directors have considered the principal
activities as well as the business risks as set out on pages 2 to 3.
The Group made a loss of US $1,978,145 in the period to 31 December 2020 (2019: loss of US $1,551,996). At the
balance sheet date the Group had net assets of US $4,668,864 (2019: US $3,727,929) and utilised net operating cash
outflows of $1,470,773 (2019: US $1,002,377).
The Company raises the funds required for the Group’s activities and has successfully undertaken several Private Funding
rounds raising over $13,500,000 to date to support the Group. During the reporting period, funding rounds raised
approximately $2.7m. This cash has allowed the Group to continue to trade, complete FDA 510k clearance of the X-
PLORTM portable oxygen concentrator and continue the development of its follow-on products, the X-PLORTM CX and
the X-PLORTM DX portable oxygen concentrators. The Company is targeting commercial launch of X-PLORTM in H1
2021.
Since the period end the Group has raised $2.7m equity from new and existing shareholders which will allow the business
to continue to trade. Further equity fundraising is planned in 2021 to support the commercial launch of X-PLORTM. The
Group has a number of private shareholders who have been supportive during all fundraisings to date and believe that,
given FDA clearance of X-PLORTM, they will continue to be supportive. As with any company placing reliance on
shareholders for financial support, the directors acknowledge that there can be no certainty that this support will continue
although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.
The Group expects that due to the close link of the COVID-19 virus to Oxygen Therapy requirements the prospects for
the Group going forward to be enhanced by an increase in the requirement for Oxygen related products.
The Group’s forecasts and projections, including the intention to raise further funds on the public markets to
commercialise the X-PLORTM, indicate that the Group has sufficient cash reserves to operate within the level of its current
facilities for a period of 12 months from the date of approval of the financial statements. The Group's forecasts and
projections, taking account of reasonably possible downsides in trading performance and development costs/timelines,
and the risks to these projections (set out in the Principal Risks and Uncertainties section of the Group Strategic Report
on Page 3) have been considered in the assessment of these forecasts.
Whilst the directors expect that further equity raising will be successful, to the extent it is not, the directors believe that
the most likely alternative will be to curtail its operations, halt development and delay commercialisation whilst looking
for alternative source of funding. In the unlikely situation where this is also unsuccessful, the Group may cease further
development of the X-PLORTM range and seek potential purchasers of the company or the IP intrinsically linked to the
X-PLORTM, in which case the application of the going concern basis of preparation may be inappropriate.
Based on the above, the directors believe it remains appropriate to prepare the financial statements on a going concern
basis. However, these circumstances represent a material uncertainty that may cast significant doubt upon the group and
company’s ability to continue as a going concern and, therefore to continue realising its assets and discharging its
liabilities in the normal course of business. The financial statements do not include any adjustments that would result
from the basis of preparation being inappropriate.
2.1.3 Changes in accounting policy
In these financial statements, where the Group has adopted new or updated standards, there is not a material impact on
the financial information and on the Company’s future financial statements.
2.2 Basis of Consolidation
Belluscura plc was incorporated on 10 December 2015. On 16 May 2016, a US incorporated company, Belluscura LLC,
was formed as a 100% owned subsidiary. On 25 April 2017 the company acquired the entire share capital of Nanotether
Discovery Science Limited. Nanotether is a dormant subsidiary.
The consolidated financial statements comprise the financial statements of Belluscura plc, Belluscura LLC, and
Nanotether Discovery Science Limited. Nanotether Discovery Science Limited was dissolved during the year.
17
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over the
entity. In assessing control, the Group takes into consideration potential voting rights. The acquisition date is the date on
which control is transferred to the acquirer. The financial statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the date that control ceases. Losses applicable to the non-
controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-
controlling interests to have a deficit balance.
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are
eliminated. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no
evidence of impairment.
IFRS 13 did not affect any fair value measurements of the Group’s assets or liabilities and therefore had no effect on the
Group’s financial position or performance.
2.3
Foreign currencies
Functional and presentation currency
(a)
These consolidated financial statements are presented in US Dollars which is the presentation currency of the Group. This
is because the majority of the Group’s transactions are undertaken in US Dollars. Each entity within the Group has its
own functional currency which is dependent on the primary economic environment in which that subsidiary operates.
(b) Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the dates of
the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement
of such transactions and from the translation at the period-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income statement. Foreign exchange gains and losses that relate
to borrowings and cash and cash equivalents are presented in the income statement within ‘finance income or costs’.
(c) Group companies
The results and financial position of all Group entities (none of which has the currency of a hyper-inflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency as
follows:
(i)
assets and liabilities for each balance sheet presented are translated at the closing exchange rates at the date of that
balance sheet
income and expense for each income statement are translated at the average rates of exchange during the period
(unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions)
(ii)
(iii) all resulting exchange differences are recognised in other comprehensive income.
2.4 Business combinations
All business combinations are accounted for by applying the acquisition method. Business combinations are accounted
for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group.
Acquisitions on or after 1 January 2010
For acquisitions on or after 1 January 2010, the Group measures goodwill at the acquisition date as:
•
•
•
•
the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in the acquiree; plus
the fair value of the existing equity interest in the acquiree; less
the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. Costs related to the
acquisition, other than those associated with the issue of debt or equity securities, are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is
classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to
the fair value of the contingent consideration are recognised in profit or loss.
On a transaction-by-transaction basis, the Group elects to measure non-controlling interests, which have both present
ownership interests and are entitled to a proportionate share of net assets of the acquiree in the event of liquidation, either
at its fair value or at its proportionate interest in the recognised amount of the identifiable net assets of the acquiree at the
acquisition date. All other non-controlling interests are measured at their fair value at the acquisition date.
18
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
2.5
Employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service
is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing
plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by
the employee and the obligation can be estimated reliably.
Share-based payment transactions
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.
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.
2.6
Expenses
Operating lease payments
Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of
the lease. Lease incentives received are recognised in the income statement as an integral part of the total lease expense.
Interest income and interest payable is recognised in profit or loss as it accrues, using the effective interest method.
2.7
Property, plant and equipment
Property, plant and equipment are stated at historical cost less depreciation and accumulated impairment losses. Historical
cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can
be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period
in which they are incurred.
Depreciation of assets is calculated is provided to write off the cost less the estimated residual value of tangible fixed
assets by equal instalments over the estimated useful economic lives as follows:
5 years
Furniture
Computer equipment
3 years
Leasehold improvements - 5 years
-
-
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the assets carrying value is greater
than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount and are recognised within
administrative expenses in the income statement. When re-valued assets are sold, the amounts are included in other
reserves are transferred to retained earnings.
2.8
Intangible assets
Licenses
Costs associated with the acquisition of Licenses for technologies and distribution rights are recognised as an intangible
asset when they meet the criteria for capitalisation. That is, they are separately identifiable, measurable and it is probable
that economic benefit will flow to the entity.
19
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
Further development costs attributable to the licensed technology and recognised as an intangible asset when the following
criteria are met:
it is technically feasible to complete the technology for commercialisation so that it will be available for use;
(i)
(ii) management intends to complete the technology and use or sell it;
(iii) there is an ability to use or sell the technology;
(iv) it can be demonstrated how the technology will generate probable future economic benefits;
(v) adequate technical, financial and other resources to complete the development and to use or sell the technology are
available; and
(vi) the expenditure attributable to the technology during its development can be reliable measured.
Licenses and their associated development costs are amortised over the life of the license or the underlying patents,
whichever is shorter. The estimated useful life of the licences is 10-15 years.
2.9
Impairment of non-financial assets
The carrying amounts of the non-financial assets, other than inventories and deferred tax 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. For goodwill, and intangible assets that have indefinite useful lives or that are not yet
available for use, the recoverable amount is estimated each year at the same time.
The recoverable amount of an asset or cash-generating unit 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 CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs 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.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, 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.
2.10 Financial assets
2.10.1 Classification
The Group classifies its financial assets depending on the purpose for which the asset was acquired. Management
determines the classification of its financial assets at initial recognition. During the financial period the Group held loans
and receivables that are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They are included in current assets, except for maturities that are greater than 12 months after the end of
the reporting year. These are classified as noncurrent assets. The Group’s loans and receivables comprise ‘trade and other
receivables’ in the balance sheet. The Group also has cash and cash equivalents.
2.10.2 Recognition and measurement
Loans and receivables are recognised on the trade date in which the transaction took place, and are recognised at their fair
value with transaction costs expensed in the income statement. Financial assets are derecognised when the rights to receive
cash flows from the loans or receivables have been collected, expired or transferred and the Group has subsequently
transferred substantially all risks and rewards of ownership.
2.11 Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally
enforceable right to offset the recognised amounts and there is the intention to settle on a net basis or realise the asset and
settle the liability simultaneously.
20
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
2.12
Impairment of financial assets
Assets carried at amortised cost
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
profit or loss.
Evidence of impairment may include indications of that the debtors or a group of debtors is experiencing significant
financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy
or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated
future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
For loans and receivables category, the amount of the loss is measured as the difference between the assets carrying
amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred)
discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the
amount of the loss is recognised in the consolidated income statement. If a loan or held-to maturity investment has a
variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined
under the contract. As a practical expedient, the Group may measure impairment on the basis of an instrument’s fair value
using an observable market price.
If, in a subsequent year, the amount of the impairment loss decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised (such as the improvement in the debtor’s credit rating), the reversal
of the previously recognised impairment loss is recognised in the consolidated income statement.
2.13 Leases (policy applicable from 1 January 2019)
The Group has applied IFRS 16 using the modified retrospective approach.
At the inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
As a lessee
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made
at or before the commencement date, plus any initial direct costs incurred, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end
of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or
the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset
will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property
and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for
certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's
incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise the following:
-
-
-
-
fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the
commencement date
amounts expected to be payable under a residual value guarantee; and
the exercise price under a purchase option that the Group is reasonably certain to exercise,
21
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
-
-
lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option,
and
penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a
change in future lease payments arising from a change in an index or rate, there is a change in the Group's estimate of the
amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will
exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the
right-of-use asset, to the extent that the right-of-use asset is reduced to nil, with any further adjustment required from the
remeasurement being recorded in profit or loss.
The Group presents right-of-use assets that do not meet the definition of investment property in 'property, plant and
equipment' and lease liabilities in 'loans and borrowings' in the statement of financial position.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for lease of low-value assets and short-
term leases. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis
over the lease term.
2.14
Inventory
Inventory comprises goods held for resale and are stated at the lower of cost or net realisable value. Cost is based on FIFO
principle and includes all direct expenditure and other appropriate attributable costs incurred in bringing the inventory to
its present location and condition.
2.15 Trade receivables
Trade receivables are amounts due from customers for the sale of goods in the ordinary course of business. Collection is
normally expected within three months or less (in the normal operating cycle of the business) and is classified as current
assets. In the rare circumstances that they exceed a period of greater than one year they are presented as non-current
assets.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less any provision for impairment.
2.16 Cash and cash equivalents
In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with
other banks, other short term highly liquid investments with maturities of three months or less and bank overdrafts.
2.17 Share capital
Share premium
The share premium account has been established to represent the excess of proceeds over the nominal value for all share
issues, including the excess of the exercise share price over the nominal value of the shares on the exercise of share
options as and when they occur. Incremental costs directly attributable to the issue of new ordinary shares and new shares
options are shown in equity as a deduction, net of tax, from the proceeds.
Capital contribution
Capital contributions are contributions made by the ultimate parent company for which no consideration is given.
2.18 Trade payables
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business
from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the
normal operating cycle of business if longer). If not, they are presented as non-current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest rate method.
22
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
2.19 Current and deferred tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the consolidated income statement,
except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case,
the tax is also recognised in other comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of tax laws enacted or substantively enacted at the balance sheet
date in the countries where the Company and its subsidiaries operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject
to interpretation and establishes provisions where appropriate on amounts expected to be paid to the tax authorities.
Deferred income tax is recognised on temporary timing differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised
if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the
balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income
tax liability is settled. Deferred income tax assets are recognised only to the extent that it is probable that future taxable
profit will be available against which the temporary differences can be utilised.
Deferred income tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries
except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the
group and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries
only to the extent that it is probable the temporary difference will reverse in full in the future and there is sufficient taxable
profit available against which the temporary difference can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the
same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle
balances on a net basis.
2.20 Provisions
Provisions and any other anticipated foreseen liabilities are recognised: when the Group has a present legal or constructive
obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation;
and the amount has been reliably estimated. Restructuring provisions comprise lease termination penalties, and employee
termination payments. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined
by considering a class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with
respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a
pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation.
The increase in the provision due to the passage of time is recognised as an interest expense.
2.21 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for
the goods supplied, stated net of discounts, and value added taxes. The Group recognises revenue when the amount of
revenue can reliably be measured; when it is probable that future economic benefits will flow to the Group; and when
specific criteria have been met for each of the Group’s activities, described below. The Group bases its estimate of return
on historical results taking into consideration type of customer, type of transaction and specifics of each arrangement.
Sales of goods
Income is derived from the sale of goods when the goods have been shipped to the customer.
Interest income
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate
applicable.
23
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
3.
Financial Risk Management
The Company’s Directors review the financial risk of the Group. Due to the early stage of its operations the Group has
not entered into any form of hedging instruments to assist in the management of risk during the period under review.
3.1
Financial risk factors
(a) Liquidity Risk
Cash flow forecasting is performed on a Group basis. The Directors monitor rolling forecasts of the Group’s liquidity
requirements to ensure it has sufficient cash to meet operational needs.
At the reporting date the Group held bank balances of US $520,070.
The contractual maturities of financial liabilities is shown in note 16.
(b) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the Group’s income or the value of its holdings of financial instruments.
Foreign exchange risk arises when individual Group entities enter into transactions denominated in a currency other than
their functional currency. The Group’s policy is, where possible, to allow Group entities to settle liabilities denominated
in their functional currency, with the cash generated from their own operations in that currency. Where Group entities
have liabilities denominated in a currency other than their functional currency (and have insufficient reserves of that
currency to settle them), cash already denominated in that currency will, where possible, be transferred from elsewhere
within the Group.
Due to low value and number of financial transactions that involve foreign currency and the fact that the Group has no
borrowings to manage, the Directors have not entered into any arrangements, adopted or approved the use of derivative
financial instruments to assist in the management of the exposure of these risks.
The Group’s exposure to foreign currency risk is based on the carrying amount for monetary financial instruments.
The gross foreign currency exposure below is with respect of pound Sterling to US Dollars.
Cash and cash equivalents
Trade receivables (gross)
Trade payables
Net exposure
31 December 2020
317,606
10,380,745
(62,908)
10,635,443
31 December 2019
814,424
7,762,723
(84,004)
8,493,143
The trade receivables shown above relates to the UK entity’s intercompany balance with the US entity, which will be
repaid in Sterling.
A 10% percent strengthening of the pound sterling against the US Dollar at 31 December 2020 would have increased
(decreased) equity and profit or loss by the amounts shown below. This calculation assumes that the change occurred at
the balance sheet date and had been applied to risk exposures existing at that date.
This analysis assumes that all other variables, in particular other exchange rates and interest rates, remain constant. The
analysis is performed on the same basis for 31 December 2019.
2020
US $
(1,063,544)
Equity
2019
US $
(849,314)
2020
US $
(1,063,544)
Profit or loss
2019
US $
(849,314)
A 10% percent weakening of the above currencies against the pound sterling at 31 December 2020 would have had the
equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain
constant.
Translation exposures
The Group’s results, as presented in US Dollars, are subject to fluctuations as a result of exchange rate movements. The
Group does not hedge this translation exposure to its earnings.
24
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
Gains or losses arise on the retranslation of the net assets of foreign operations at different reporting dates and are
recognised within the consolidated statement of comprehensive income. They will predominantly relate to the
retranslation of opening net assets at closing foreign exchange rates, together with the retranslation of retained foreign
profits for the year (that have been accounted for in the consolidated income statement at average rates) at closing rates.
Exchange rates for major currencies are set out below
The following exchange rates have been used in the translation of the results of foreign operations:
Closing rate
for 2018
Weighted
average rate
for 2019
Closing rate
for 2019
Weighted
average rate
for 2020
Closing rate
for 2020
US Dollar
1.2769
1.2769
1.3270
1.2841
1.3652
3.2 Capital management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in
order to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital.
In order to adjust or maintain the capital structure, the Group may adjust the level of dividends paid to its shareholders,
return capital to shareholders, issue new shares or sell assets to reduce borrowings. This policy is periodically reviewed
by the Directors, and the Group’s strategy remains unchanged for the foreseeable future.
The capital structure of the Group consists of cash and bank balances and equity consisting of issued share capital, reserves
and retained earnings of the Group.
3.3
Fair value
Financial instruments are measured at fair value including cash and cash equivalents trade and other payables, and
borrowings.
Due to their short term nature, the carrying value of cash and cash equivalents, trade and other receivables, and trade and
other payables approximate their fair value.
4.
Critical accounting estimates and judgements
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.
Key judgement
The following judgement (apart from those involving estimates) have had the most significant effect on amounts
recognised in the financial statements.
(a) Tangible fixed assets (see note 11)
Tangible fixed assets, are depreciated over their useful lives taking into account residual values, where appropriate.
The actual lives of the assets and residual values are assessed annually and may vary depending on the number of
factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance
programmes are taken into account. Residual value assessments consider issues such as future market conditions,
the remaining life of the asset and projected disposal values.
(b) Intangible fixed assets (see note 12)
Intangible fixed assets, are depreciated over their useful lives taking into account residual values, where appropriate.
The actual lives of the assets and residual values are assessed annually and may vary depending on the number of
factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance
programmes are taken into account. Residual value assessments consider issues such as future market conditions,
the remaining life of the asset and projected disposal values.
Development costs attributable to the licensed technology and recognised as an intangible asset when the criteria in
note 2.9 are met.
(c) Deferred taxes
Deferred tax liabilities are always provided for in full. Deferred tax assets are recognised to the extent that it is
probable that the underlying deductible temporary differences will be able to be offset against future taxable income.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their
25
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
respective period of realisation, provided they are enacted or substantively enacted at the balance sheet date.
Deferred tax is recognised as a component of the tax expense in the income statement, except where it relates to
items charged or credited to other comprehensive income or directly to equity.
(d) Recoverability of intercompany debt by the company from its subsidiaries.
The directors assess the recoverability of amounts owed by the subsidiary to the parent company, which requires
judgement to be made. This involves forecasting sales revenues to be earned by the subsidiary which will enable it
to repay the parent company.
5.
Revenue
The entire revenue is generated from the Sale of Goods and from its geographical market in United States of America
US$ nil (2019: US $128,701).
Gross profit in the period was US$ nil (2019: US$ 14,316). Gross profit in 2019 was reduced by $39,675 for the inventory
write off of discontinued products and increased by $16,488 for the release of unused royalty provision.
6.
Other operating income and administrative expenses
6.1 (a) Other operating income
Group
Net gain on disposal of SlydeTM licence
Grants
Purchase of option right
Total
6.1 (b) Expenses by nature
Group
Depreciation of property plant and equipment
Costs related to fundraising activities
Foreign exchange movements
Employee benefit expense
Other administration expenses
2020
US$
-
6,421
5,072
11,493
2020
US$
8,544
78,911
391,737
1,022,677
63,079
2019
US$
44,368
-
-
44,368
2019
US$
9,403
(2,237)
373,742
808,524
24,556
6.2 Auditor remuneration
During the period, the Group (including its subsidiaries) obtained the following services provided by the auditor and its
associates:
Group
Fees payable to the Group’s auditor and its associated for the audit of the
Group and Company financial statements
Fees payable to the Company’s auditor and its associates for other services
- Tax advisory services
2020
US$
37,098
7,705
44,803
2019
US$
37,157
5,175
42,332
7.
Employees
7.1 Directors’ emoluments
Group
Directors emoluments
Total
2020
US$
404,355
2019
US$
401,817
404,355
401,817
26
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
Two Directors served during the year (2019: 2). The highest paid Director received a salary of $200,000 (2019:
$185,000) and benefits of $31,105 (2019: $33,666). Two Directors received share options in the year (2019: 2) and
no Directors exercised share options in the year (2019: nil)
7.2
Employee benefit expense
Group
Wages and salaries
Social security costs
Medical Insurance
Share based payments
Total
7.3 Average number of people employed
Group
Average number of people (including executive directors) employed
Management
Sales
Finance
Total average headcount
8.
Finance income and costs
Group
Finance Cost:
-
-
Finance Cost
Interest cost on Right of Use Asset
Interest on COVID-19 Small Business Association Loan
2020
US$
765,854
61,396
84,077
111,350
1,022,677
2019
US$
679,281
53,767
69,813
5,663
808,524
2020
2019
2
4
-
6
2020
US$
32,443
513
32,956
2
3
-
5
2019
US$
37,201
-
37,201
27
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
9.
Income tax expense
Group
Current tax on profits for the period
Adjustments in respect of prior period
Total current tax
Income tax expense
2020
US$
-
-
-
-
2019
US $
-
-
-
-
The charge for the year can be reconciled to the loss per the Income Statement as follows:
Group
(Loss) before tax
Tax calculated at domestic tax rates applicable to profits in
the respective countries
Tax effects of:
- Expenses not deductible for tax purposes
- Capital allowances in excess of depreciation
- Unrelieved tax losses and other deductions
Total income tax charge
2020
US$
(1,978,145)
2019
US$
(1,551,996)
(403,628)
(294,879)
36,150
(2,760)
370,238
-
(425)
(4,472)
299,776
-
The tax on the Group’s loss before tax differs from the theoretical amount that would arise using the weighted average
tax rate applicable to losses. The weighted average applicable UK tax rate was 19%.
Unused tax losses for which no deferred tax assets have been recognised is attributable to the uncertainty over the
recoverability of those losses through future profits.
10.
Investment in subsidiaries
Company
Cost and net book value
Balance at 31 December 2018
Investment set off against Trade and Other Payables
Balance at 31 December 2019
Shares in
subsidiaries
355,940
(355,930)
10
Total
US $
355,940
(355,930)
10
Balance at 31 December 2020
10
10
In 2019 Nanotether Discovery Science Limited was dissolved. At the year end, the Company’s investment in
Nanotether Discovery Science Ltd amounted to $nil (2019: $nil).
The loss on the disposal of the investment in Nanotether at zero value was set off against the amount payable to
Nanotether in trade & other payables.
Principal subsidiaries name
Belluscura LLC
The registered office:
Belluscura LLC
Country of
Incorporation &
place of business
USA
Class of
share held
Ordinary
% of ordinary
shares directly held
2020 2019
Nature of business
100% 100% Sale of medical devices
160 Greentree Drive, Suite 101, Dover, Delaware 19904, County of Kent
The Parent Company’s loss before tax for the period 31 December 2020 was $1,640,014 (2019: $1,192,076).
28
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
11.
Property, plant and equipment
Group
Cost
At 1 January 2019
Additions during the period
Disposals during the period
At 31 December 2019
At 1 January 2020
Additions during the period
Disposals during the period
At 31 December 2020
Accumulated depreciation
At 1 January 2019
Depreciation charge for the period
Depreciation charge on disposals
At 31 December 2019
At 1 January 2020
Depreciation charge for the period
Depreciation charge on disposals
At 31 December 2020
Net book value
At 31 December 2019
At 31 December 2020
Land & buildings
(Right of Use Asset)
US$
Furniture and
Equipment
US $
Computer
Equipment
US $
571,950
-
-
571,950
571,950
-
-
571,950
-
(98,049)
-
(98,049)
(98,049)
(98,049)
-
(196,098)
35,880
-
-
35,880
35,880
-
-
35,880
(9,048)
(7,176)
-
(16,224)
(16,224)
(7,176)
-
(23,400)
7,034
2,547
-
9,581
9,581
-
-
9,581
(4,649)
(2,227)
-
(6,876)
(6,876)
(1,367)
-
(8,243)
Total
US $
614,864
2,547
-
617,411
617,411
-
-
617,411
(13,697)
(107,452)
-
(121,149)
(121,149)
(106,592)
-
(227,741)
473,901
375,852
19,656
12,480
2,705
1,338
496,262
389,670
Right-of-use assets related to lease properties that do not meet the definition of investment properties are presented as
Land & Building (see note 21).
29
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
12.
Intangible assets
Group
Cost
At 1 January 2019
Additions during the period
At 31 December 2019
At 31 December 2019
Additions during the period
At 31 December 2020
Accumulated amortisation and impairment
At 1 January 2019
At 31 December 2019
At 1 January 2020
At 31 December 2020
Net book value
At 31 December 2019
At 31 December 2020
Purchased intangible assets
Product
Development
US$
2,085,093
1,120,285
3,205,378
Licenses
US $
189,506
-
189,506
189,506
-
189,506
3,205,378
1,194,432
4,399,810
Total
US$
2,274,599
1,120,285
3,394,884
3,394,884
1,194,432
4,589,316
(189,506)
(189,506)
(270,150)
(270,150)
(459,656)
(459,656)
(189,506)
(189,506)
(270,150)
(270,150)
(459,656)
(459,656)
-
-
2,935,228
4,129,660
2,935,228
4,129,660
Note:
During the current year, the Group has capitalised $1,194,005 (2019: $1,009,617) of development costs related to the
X-PLORTM portable oxygen concentrator and capitalised $342,093 (2019: $110,669) of development costs related to
the X-PLOR DX portable continuous flow oxygen concentrator These assets are still under construction and on which
amortisation has not started yet.
Purchased intangible assets
Company
Cost
At 1 January 2019
Additions during the period
At 31 December 2019
At 31 December 2019
Additions during the period
At 31 December 2020
Accumulated amortisation and impairment
At 1 January 2019
Amortisation charge for the period
At 31 December 2019
At 31 December 2019
Amortisation charge for the period
At 31 December 2020
Net book value
At 31 December 2019
At 31 December 2020
13.
Inventory
Due to the divestment of legacy products and new products not yet online, there is no current inventory.
Licenses
US $
189,506
-
189,506
189,506
-
189,506
(189,506)
-
(189,506)
(189,506)
-
(189,506)
-
-
30
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
14.
Trade and other receivables
Group
Trade receivables
Less provision for impairment of trade receivables
Trade receivables – net
VAT
Receivable from shareholders
Prepayments and other debtors
Total trade and other receivables
2020
US $
-
-
-
16,146
171,535
9,972
197,653
2019
US $
12,398
(6,750)
5,648
8,809
-
50,118
64,575
The fair value of trade and other receivables are not materially different to those disclosed above. The Groups
exposure to credit risk related to trade receivables is detailed in note 3 to the accounts on page 24.
Company – Current
Receivable from shareholders
Prepayments and other debtors
VAT
Total trade and other receivables
Company – Non-Current
Receivables from Group companies
Less provision for impairment of Intercompany receivables
Total trade and other receivables
2020
US $
171,535
-
16,146
187,681
2019
S $
-
146
8,809
8,955
2020
US $
10,380,745
(4,135,000)
6,245,745
2019
US $
7,753,768
(3,075,000)
4,678,768
Ageing of trade receivables:
Group
0-30 days
US $
30-60 days
US $
60-90 days
US $
90+ days
US $
Total Gross
US $
ECL
US $
Total Net
US $
2019
2020
3,152
-
936
-
1,560
6,750
12,398
(6,750)
5,648
-
-
-
-
-
Company
0-30 days
US $
30-60 days
US $
60-90 days
US $
90+ days
US $
Total Gross
US $
ECL
US $
Total Net
US $
2019
2020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The amount receivable from Group companies is an interest free loan given and is repayable on demand. Management
doesn’t intend to recall it in the next 12 months and hence same has been disclosed as Non-Current. The basis of the
impairment of Intercompany receivables is the management intends to recall it within 7 years so it is discounted over
7 years at 7%. The majority of investment has been used to develop and sell products initially in the US market. The
Group expects the US entity to be become profitable and cash positive within 3 years.
A 10% percent increase in the discount rate would increase the impairment by $322,000 (2019: $240,000) and a 10%
reduction in the discount rate would reduce impairment by $337,000 (2019: 251,000).
31
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
15. Cash and cash equivalents
Group
Cash and bank and in hand
Total cash and cash equivalents
Company
Cash at bank and in hand
Total cash and cash equivalents
2020
US $
520,070
520,070
2019
US $
1,033,512
1,033,512
2020
US $
317,606
317,606
2019
US $
814,424
814,424
The Groups exposure to foreign exchange risk is detailed in note 3 to the accounts on page 24.
16. Categories of financial assets and financial liabilities
Group
Financial assets
Loans and receivables at amortised cost
Receivables from shareholders
Cash and equivalents
Financial liabilities
Trade and other payables at amortised cost
Lease liability
COVID-19 Small Business Association Loan
Company
Financial assets
Loans and receivables at amortised cost
Provision
Net loans and receivables at amortised cost
Receivables from shareholders
Cash and equivalents
Financial liabilities
Trade and other payables at amortised cost
2020
US $
-
171,535
520,070
691,605
2019
US $
5,648
-
1,033,512
1,039,160
73,391
417,384
77,314
568,089
297,770
498,398
-
796,168
2020
US $
2019
US $
10,380,745
(4,135,000)
6,245,745
171,535
317,606
6,734,886
7,753,768
(3,075,000)
4,678,768
-
814,424
5,493,192
62,797
77,791
32
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
Maturity Analysis of financial liabilities
The following are the contractual maturities of financial liabilities at the reporting date. The amounts are gross and
undiscounted, and include estimated contractual interest payments and exclude the effect of netting agreements:
Carrying
amount
US $
Contractual
cashflows
US $
1 year or
less
US $
1-5 years
US $
5 years and
over US $
73,391
73,391
73,391
-
417,384
77,314
474,759
77,314
118,183
77,314
356,576
-
568,089
625,464
268,888
356,576
297,770
297,770
297,770
-
498,398
588,890
-
796,168
886,660
114,131
474,759
-
411,901
-
474,759
-
-
-
-
-
-
-
-
Group
2020
Trade and other payables at
amortised cost
Lease liability
COVID-19 Small Business
Association Loan
2019
Trade and other payables at
amortised cost
Lease Liability
COVID-19 Small Business
Association Loan
17.
Share capital and premium
Share capital
Group and Company
Issued and fully paid up
At 1 January 2019
Shares issued for cash
At 31 December 2019
No of shares of
£0.01 each
Ordinary
Shares US $
Total
US $
33,782,234
15,350,248
49,132,482
49,132,482
12,889,190
885,918
62,907,590
456,107
192,191
648,298
648,298
163,653
11,250
823,201
456,107
192,191
648,298
648,298
163,653
11,250
823,201
At 31 December 2019
Shares issued for cash
Shares issued for cash received post year end
At 31 December 2020
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at meetings of the Company.
Share premium
Group and Company
Allotted and fully paid up
At 1 January 2019
Premium on shares issued (net of cost of issue of shares)
At 31 December 2019
At 1 January 2020
Premium on shares issued (net of cost of issue of shares)
Reduction in Capital
At 31 December 2020
Ordinary
Shares US $
Total
US $
3,304,432
2,410,246
5,714,678
5,714,678
2,233,896
(7,391,891)
556,683
3,304,432
2,410,246
5,714,678
5,714,678
2,233,896
(7,391,891)
556,683
The cost of issue of shares relates to broker’s commissions on funds raised of $83,928 (2019: $183,156).
33
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
At the end of the period there were 8,122,243 share warrants in issue at an average subscription price of $0.18 (2019:
6,367,318 at $0.18 per share). There was no consideration paid for the warrants.
Share options
During the year staff were granted share options, vesting 100% on an exit or in equal annual thirds following a stock
market listing of the Company. As an exit is not predictable, the Company determined the best measurement period is a
potential listing-mid 2021
Award
Unapproved
EMI
Unapproved
EMI
Total
2020
000’s
-
-
4,893
1,882
6,775
2019
000’s
4,380
1,275
-
-
5,655
Date of
Grant
31/10/2019
05/11/2019
07/05/2020
07/05/2020
Exercise
Price
$0.085
$0.085
$0.195
$0.195
Exercise Period
From To
31/10/2019
05/11/2019
07/05/2020
07/05/2020
31/10/2029
05/11/2029
07/05/2030
07/05/2030
Avg remaining
contractual life
8.8 years
8.8 years
9.6 years
9.6 years
Movement in share options
Outstanding at 1 January 2019
Granted
Outstanding at 31 December 2019
Outstanding at 1 January 2020
Granted
Outstanding at 31 December 2020
Number
000’s
-
5,655
5,655
5,655
6,775
12,430
Weighted average
exercise price
$
-
0.085
0.085
Weighted average
share price
$
-
0.078
0.078
0.085
0.195
0.145
0.078
0.195
0.142
Key assumptions used in the calculation of share option fair value
Date of
Grant
Award
31/10/2019
05/11/2019
07/05/2020
07/05/2020
Unapproved
EMI
Unapproved
EMI
Share
price on
the date
of grant
$
0.078
0.078
0.195
0.195
Exercise
price
$
0.085
0.085
0.195
0.195
Volatility
%
28.5
28.5
28.5
28.5
Expected
Dividend
Yield
%
0%
0%
0%
0%
(%)
Vesting
period
Years
2.67
2.67
2.50
2.50
Risk-free
rate of
interest
%
2.1
2.1
2.1
2.1
Fair
value
$
0.01
0.01
0.03
0.03
The key assumptions used in calculating the share-based payments were as follows:
a. The Black-Scholes model is used to value both the options.
b. The expected volatility is based on a comparator set of similar stocks.
c. The risk-free rate is equal to the prevailing UK Gilts rate at grant date, which is commensurate with the expected term.
d. Expected forfeiture rates are based on recent experience of staff turnover levels.
e. The charge is spread over the vesting period on a straight-line basis.
Share based payments charge
Group
Charge in year
2020
US $
118,544
2019
US $
5,886
34
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
18. Reserves
Retained earnings
At 31 December 2018
Loss for the period
Share based payments charge
At 31 December 2019
Loss for the period
Reduction in Capital
Share based payments charge
At 31 December 2020
Group
US $
(1,298,819)
(1,551,996)
5,886
(2,844,929)
(1,978,145)
7,391,891
118,544
2,687,361
Company
US $
31,485
(1,192,076)
5,886
(1,154,705)
(1,649,098)
7,391,891
118,544
4,706,632
On 7 October 2020, the shareholders of the group passed a special resolution, pursuant to Chapter 2 of Part 13 of the
Companies Act 2006, to cancel the balance standing to the credit of the share premium account and transfer the same to
reserves.
Capital Contribution
At 31 December 2018
Capital contribution received
At 31 December 2019
Capital contribution received
At 31 December 2020
The Capital Contribution relates to the acquisition of intangible product licences.
Translation reserve
At 31 December 2018
Foreign exchange loss
At 31 December 2019
Foreign exchange loss/gain
At 31 December 2020
Group
US $
165,000
-
165,000
-
165,000
Group
US $
(328,860)
373,742
44,882
391,737
436,619
Company
US $
165,000
-
165,000
-
165,000
Company
US $
(328,828)
373,710
44,882
391,737
436,619
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements
of foreign operations, primarily relating to the statement of financial position at the reporting dates. The reporting date
foreign exchange rates by major currency are provided in note 3.
19.
Trade and other payables
Group – Current
Trade creditors
Social security and other taxes
Lease liability
COVID-19 Small Business Association Loan
Accruals and other creditors
Group – Non-Current
COVID-19 Small Business Association Loan
Lease liability
2020
US $
-
100
92,217
64,428
73,391
230,136
2020
US $
12,886
325,167
338,053
2019
US $
33,968
5,480
82,075
-
263,802
385,325
2019
US $
416,323
416,323
35
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
There are no amounts included with lease liability repayable after five years.
Company
Trade creditors
Social security and other taxes
Accruals and other creditors
2020
US $
-
100
62,807
62,907
2019
US $
-
6,213
77,791
84,004
The fair values of trade and other payables are not materially different to those disclosed above. The Group’s exposure to
currency and liquidity risk related to trade and other payables is detailed in note 3 to the accounts on page 24.
Included within trade and other payables is $338,053 (2019: $416,323) expected to be settled in more than 12 months.
On 4 May 2020 the Group secured a COVID-19 Small Business Association (SBA) Loan for $76,800 with an interest
rate of 1.00% per annum. The loan matures on 4 May 2022. Interest has been accrued on this loan to 31 December
2020. As at 31 December 2020, no repayments had been made. On 9 April 2021 the entire loan was forgiven.
20. Deferred income tax
Unused tax losses for which no deferred tax assets have been recognised are attributable to the uncertainty over the
recoverability of those losses through future profits. A blended tax rate of 20% has been used to calculate the potential
deferred tax.
Group
Deferred tax
Accelerated capital allowances
Share based payments
Short term timing differences
Tax losses
Unprovided deferred tax asset
Deferred Tax
Company
Deferred tax
Accelerated capital allowances
Share based payments
Short term timing difference
Tax losses
Unprovided deferred tax asset
2020
US $
(2,760)
23,642
-
2,035,030
2,055,912
(2,055,912)
-
2019
US $
(4,472)
1,118
425
1,547,630
1,544,701
(1,544,701)
-
2019
2020
US $
US $
-
-
1,118
23,642
152,425
201,400
264,242
332,088
417,785
557,130
(417,785)
(557,130)
-
-
In the 3 March 2021 Budget it was announced that the UK tax rate will increase to 25% from 1 April 2023. This will
have a consequential effect on the group’s future tax charge. If this rate change had been substantively enacted at the
current balance sheet date the unrecognised deferred tax asset would have increased by $135,198.
36
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
21.
Leases as a lessee (IFRS 16)
Right-of-use assets
Right-of-use assets related to lease properties that do not meet the definition of investment properties are presented as
property, plant and equipment (see note 11):
Group
At 1 January 2019
Addition to right of use asset
Depreciation charge for the period
At 31 December 2019
Depreciation charge for the period
At 31 December 2020
Land and
buildings
US$
-
571,950
(98,049)
473,901
Total
US $
-
571,950
(98,049)
473,901
(98,049)
375,852
(98,049)
375,852
Amounts recognised in profit or loss
The following amounts have been recognised in profit or loss for which the Group is a lessee
Interest expense on lease liability
Depreciation on right of use assets
Amounts recognised in statement of cash flows
Total cash outflow for leases
Lease Liabilities
Group
At 1 January 2019
Interest
Payment
At 31 December 2019
At 1 January 2020
Interest
Payment
At 31 December 2020
Maturity analysis of undiscounted cash flows due for leases
Within one year
After one year but not more than five years
After five years
Total
2020
US $
32,443
98,049
2019
US $
37,201
98,049
2020
US $
118,859
2019
US $
105,348
Land and
buildings
US$
571,950
37,201
(110,753)
498,398
498,398
32,443
(113,457)
417,384
2020
US$
118,183
356,576
-
474,759
Total
US $
571,950
37,201
(110,753)
498,398
498,398
32,443
(113,457)
417,384
2019
US $
114,131
474,759
-
588,890
37
Belluscura plc
Notes to the accounts
For the year ended 31 December 2020
22. Dividends
No dividend has been declared for the period ended 31 December 2020 and no dividend was paid during the period.
23. Cash generated from operating activities
Group
Loss before income tax
Adjustments for
- Depreciation
- Amortisation and impairment
-
Proceeds from sale of asset
- No cash interest expense
- Movement in foreign exchange
-
Movement in trade and other receivables
Inventory movement
Movement in trade and other payables
Cash generated from operating activities
Share based payments
2020
US $
(1,978,145)
2019
US $
(1,551,996)
8,544
98,049
-
32,956
(68,056)
111,350
81,268
-
243,261
(1,470,773)
9,403
98,049
(44,368)
37,202
(385,513)
5,663
(634,169)
128,094
1,335,258
(1,002,377)
24. Related party transactions
Details of Directors' remuneration are given in the Directors’ report.
As at the period end the Group does not have any controlling party.
25.
Events after the reporting period
Following the reporting date and at the date of signing the Group has raised approximately $2.7m from new and existing
shareholders.
38