Company Registration No. 09910883
Belluscura plc
Annual report and financial statements
for the year 31 December 2021
Belluscura plc
Report and financial statements 2021
Contents
OFFICERS AND PROFESSIONAL ADVISORS
CHAIRMAN’S STATEMENT
CHIEF EXECUTIVE’S REVIEW
FINANCIAL REVIEW
GOVERNANCE
DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2021
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
NOTES TO THE ACCOUNTS
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Belluscura plc
Report and financial statements for the year to 31 December 2021
OFFICERS AND PROFESSIONAL ADVISORS
Registered Office
Belluscura plc
15 Fetter Lane
Holborn
London
EC4A 1BW
Officers
Adam Reynolds
Bob Rauker
Tony Dyer
Dr Patrick Strollo
David Poutney
Ric Piper
Non-Executive Chairman
Chief Executive Officer
Chief Financial Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director
Auditor
Jeffreys Henry Audit Limited
Finsgate
5-7 Cranwood Street
London
EC1B 9EE
Banks
Barclays Bank Plc
1 Churchill Place
Canary Wharf
London
E14 5HP
Solicitor
DWF PLC
20 Fenchurch Street
London
EC3M 3AG
Comerica Bank
PO Box 650282
Dallas
Texas
TX 75265-0282
JPMorganChase
2200 Ross Ave, Floor 8
Dallas
Texas
TX 75201
Nominated Advisor
Spark Advisory Partners Limited
5 St John's Ln
London
EC1M 4BH
Broker
Dowgate Capital Ltd
15 Fetter Ln
London
EC4A 1BW
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Belluscura plc
Report and financial statements for the year to 31 December 2021
CHAIRMAN’S STATEMENT
I am pleased to report on the performance of Belluscura as my first year as Chairman after listing on AIM in May 2021.
Belluscura is a business 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 Group entered into a co-exclusive licence and development agreement with Separation Design
Group IP Holdings LLC (“SDG”) to complete the development of the X-PLOR, 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-PLOR licence. X-PLOR
received 510(k) clearance from the Food and Drug Administration (“FDA”) on 2 March 2021.
Our products are currently manufactured in the US and the Group is delighted to have commercially launched the
X-PLOR in September 2021.
The Group has also developed follow-on products which will target the same oxygen markets and continues to work
on other oxygen enrichment technologies in complementary markets
We believe that the X-PLOR range of products will provide significant growth for the Group. The global demand for
medical oxygen continues to grow with an estimated 300m people suffering from Chronic Obstructive Pulmonary
Disease (“COPD”) and the disease expecting to become the leading cause of death worldwide in 15 years. Additionally,
even though the COVID-19 pandemic appears to be easing, recent studies reveal that nearly one in five people that
contracted COVID-19 showed lung abnormalities, potentially resulting in a future need for supplemental oxygen1.
The Company looks forward with optimism and will be updating shareholders on a regular basis.
Adam Reynolds
Non-Executive Chairman
28 March 2022
1 The unmet global burden of COPD - UCL Respiratory, University College London, London, UK - https://discovery.ucl.ac.uk/id/eprint/10052604/
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Belluscura plc
Report and financial statements for the year to 31 December 2021
CHIEF EXECUTIVE’S REVIEW
2021 has been a transformational year for Belluscura. On 2 March 2021 we received 510(k) clearance from the US FDA
for the X-PLOR Portable Oxygen Concentrator. This underpinned our successful £17.5 million ($24.5 million) fundraise
and IPO listing on AIM on 28 May 2021.
Whilst we had many distributor enquiries, both in the US and internationally, in order to manage the launch and
ensure we would have continuity of supply to our customers, we limited the number of initial distributor agreements.
We signed our first distribution agreement in June 2021 and now have more than ten in place.
Following a successful Pre-Market Evaluation, where the units were tested with 17 volunteer oxygen users, we
launched the X-PLOR in early September and in the four months to 31 December 2021 we sold 377 X-PLOR units,
significantly exceeding our initial forecasts. Our device is priced competitively for the B2B market and during 2022
we will expand into the B2C marketplace which allows the Company to retain higher gross margins.
Recognising the current global supply chain challenges, the Company has significantly increased inventory levels of
key components and other raw materials to pre-empt any potential disruption on production levels allowing them
to be maintained in the current financial year and beyond. Inevitably, whilst these shortages remain, costs are higher,
but as we increase volume and the shortages ease, we will start to benefit from economies of scale along with the
potential benefits of reducing costs in 2023.
The Group’s manufacturing capability has been scaled up significantly to ensure that the Company can continue to
meet the increased demand from US distributors, with the Company continuing to broaden its sales network with
both online and brick & mortar distributors. The Company also continues to move forward toward launching the
product outside the US, having received multiple enquiries from distributors globally.
We continue to strengthen the Belluscura team, increasing headcount (excluding non-executive Directors) from 9
at the time of IPO to 16 at the end of the year. We will continue to invest in our engineering and manufacturing
capability along with sales and marketing to build out our B2B sales, B2C sales and the brand. We will also invest in
our quality and compliance infrastructure that any fast-growing business requires.
Forecasts of the supplementary oxygen market now expect it to grow from $3.14bn in 2021 to $5.64bn by 2027,
representing a Compound Annual Growth Rate (CAGR) of 10.17%2. The longer-term impact on oxygen requirements
for recovering COVID-19 patients is yet unknown; however, there has been increased demand for oxygen related
devices globally. In addition, supply chain disruption has caused a shortage of devices across the industry, which
opens up opportunities for Belluscura.
Outlook
Trading in the beginning of 2022 has continued to accelerate. In the first six weeks of 2022 we increased the number
of distributors to more than 10 and had combined sales and orders for more X-PLOR units than the total number of
X-PLOR units we sold in 2021.
We will increase production commensurate with market demand and manufacturing capabilities which we expect
to grow significantly. The Group also continues to satisfactorily progress regulatory clearances in territories outside
the US.
Development of the follow-on products, the X-PLOR CX and X-PLOR DX, continues to progress well with the expected
launch of these next generation products to be in Q2 2022 and Q3 2022 respectively.
The Company has a strong balance sheet and is well positioned to deliver substantial growth in 2022. We look
forward to the future with confidence.
Robert Rauker
Chief Executive Officer
28 March 2022
2 Medical Oxygen Concentrators & Oxygen Cylinders Market Research Report by Product, by Technology, by End-user, by Region - Global Forecast to
2027 - Cumulative Impact of COVID-19 (yahoo.com)
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Belluscura plc
Report and financial statements for the year to 31 December 2021
FINANCIAL REVIEW
Income statement
Revenue for the year to 31 December 2021 was $420,316 (2020: $nil). This revenue was generated in the final four
months of the year following the launch of the X-PLOR. All revenue was generated in the US.
There was a small Product Gross Loss in the year of $52,171 (2020: $nil). With X-PLOR being the Group’s first product
to be launched, pricing was deliberately competitive to establish early B2B sales, with cost of goods sold reflecting
the initial small volumes.
Other income of $209,690 (2020: $11,493) was from COVID-19 related grants and forgiven loans.
Operating Loss for the year was $5.19m (2020: $1.95m) and Total Comprehensive Loss was $6.37m (2020: $1.59m).
Adjusted Operating Loss of $4.21m (2020: $1.30m) is calculated before IFRS2 Share Based Payment Charge and
Surrendered Share Options (Note 6.2), Depreciation, Amortisation, Interest, Exchange Differences and IPO Costs. Note
26 Alternative Performance Measure reconciles the Total Comprehensive Loss to the Adjusted Operating Loss.
Loss per share
The basic and diluted loss per share was $0.055 (2020: $0.036).
Financial position
The Group net assets at 31 December 2021 were $24.67m (2020: $4.67m). This comprised total assets of $26.00m (2020:
$5.24m) and total liabilities of $1.33m (2020: $0.57m). The total assets included intangible assets (capitalised research
and development costs), property, plant and equipment and right-of-use assets of $7.05m (2020: $4.52m).
Cashflow
The Group had net cash of $15.59m (2020: $0.52m) as at 31 December 2021. Net cash inflow of funds raised in the year
was $25.47m (2020: $2.25m). During the year the net cash outflow from operating activities was $7.29m (2020: $1.47m).
The Group raised £17.5 million ($24.5 million) from investors in May when its shares were admitted to trading on AIM,
before expenses of £1.4 million ($1.9 million); of which £0.5 million ($0.6 million) were charged to the Income
Statement and £0.9 million ($1.3 million) were charged to the Share Premium Account. These funds are being applied
in pursuing the Group’s strategic objectives.
Dividends
No dividend is recommended (2020: £nil) due to the early stage of the development of the Group.
Events after the reporting period
At the date of these Final Results, there were no events after the reporting period.
Change of auditors
At the Annual General Meeting on 7 May 2021 the shareholders approved the re-appointment of KPMG LLP as the
Group’s independent auditor. Subsequent to this, as requested by the Board, the Audit Committee considered the
appointment of a new independent auditor for the year ending 31 December 2021. The Board accepted the
Committee’s recommendation that Jeffreys Henry Audit Limited be appointed as the Group’s independent auditor.
The Board wishes to thank KPMG for their work as the Group’s independent auditor since 2017.
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’s primary source of revenue is from sales of its X-PLOR product. Management
performs regular reviews of the sector to ensure it is targeting large markets.
•
Successful product development. The Group received FDA 510(k) clearance for X-PLOR on 2 March 2021. The
Group’s follow-on products are in advanced development and are based upon shared technology with X-PLOR.
The Board regularly monitors the carrying value of capitalised product development in the light of plans for future
revenue and margin.
• 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 four 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 (excluding leases
capitalised under IFRS16).
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Belluscura plc
Report and financial statements for the year to 31 December 2021
•
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.
Companies Act S.172
The Directors acknowledge their duty under s.172 of the Companies Act 2006 and consider that they have, both
individually and together, acted in the way that, in good faith, would be most likely to promote the success of the
Company for the benefit of its members as a whole. In doing so, they have had regard (amongst other matters) to:
•
•
•
•
•
the likely consequences of any decision in the long term. The Group’s long-term strategic objectives, including
progress made during the year and principal risks to these objectives, are shown in the Chairman Statement,
Chief Executive’s Review and Financial Review.
the interests of the Company’s employees. Our employees are fundamental to us achieving our long-term
strategic objectives. We aim to be a responsible employer in our approach to the pay and benefits our employees
receive. Further details can be found in the Remuneration Report.
the impact of the Company’s operations on the community and the environment. The Group operates honestly
and transparently. We consider the impact on the environment, the people who work for us and the wider
community and how we can minimise this.
the desirability of the Company maintaining a reputation for high standards of business conduct. Our intention is
to behave in a responsible manner, operating high standard of business conduct and good corporate governance.
the need to act fairly as between members of the Company. Our intention is to behave responsibly towards our
shareholders and treat them fairly and equally so that they may benefit from the successful delivery of our
strategic objectives.
Contingent Liabilities
On 24 February 2017, the Company entered into a co-exclusive licence and development agreement with Separation
Design Group, LLC and SDG (together the “SDG Parties”) (“SDG Licence”) which was subsequently amended by an
amendment agreement dated 19 March 2021. Pursuant to the SDG Licence: if by 3 September 2025, cumulative sales
of the X-PLOR have not exceeded $20 million dollars, Belluscura must make a one-time payment of $3 million to the
SDG Parties to maintain the exclusive SDG licence.
COVID-19
The Board have reviewed and assessed the impact of the COVID-19 pandemic on the Group. This did result in an
elongated FDA clearance process, however clearance was received on 2 March 2021. We face similar challenges to
businesses due to disruption caused by COVID-19, however, we believe that we are in a strong position to progress.
Russia/Ukraine
The Board have reviewed and assessed the impact of the current Russia/Ukraine conflict on the Group. The Group
believe that based upon our current structure and plans that there will be minimal impact on the Group.
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, expenditure (both current and
investment) control against budget and cash used and remaining.
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.
Tony Dyer
Chief Financial Officer
28 March 2022
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Belluscura plc
Report and financial statements for the year to 31 December 2021
GOVERNANCE
Board of Directors
Adam Reynolds - Non-Executive Chairman
Adam began his career in the City in 1980 and in 2000 established his own PR/IR/Corporate finance firm which listed
on AIM in November 2000 and was then later sold in 2004 via a reverse takeover. He was approached in 2005 to
become non-executive Chairman of International Brand Licensing Plc (“IBL”). The company at this time had
substantial debt and the remit was to turn it around, and following the sale of a number global sports IP assets, IBL
became a cash shell. In 2009 Adam introduced David Evans and Julian Baines, two leading diagnostic specialists in
the UK, to the company and the Plc changed direction. That business is today called EKF Diagnostic Holdings Plc,
and Adam remains a non-executive director and shareholder. In November 2012 Adam launched a successful agreed
bid for the trading assets and business of Autoclenz Plc alongside its management team. Adam remains a director
and shareholder. In addition, Adam is currently non-executive Chairman of AIM-quoted Yourgene Health Plc and
MyHealthChecked Plc, and a non-executive director of Sosandar Plc. Adam joined the Board in April 2021.
Robert “Bob” Rauker - Chief Executive Officer
Bob is a senior management executive with a track record in the medical device sector. Over his career Bob has been
involved in the valuation, acquisition and sale of multiple medical devices. Bob has served as Head of Medical Device
& Life Sciences Group for Acacia Research Group (NASDAQ) in the role of SVP, where he built the medical device
business to $30 million in revenue. Previously he served as global chief IP counsel for Synthes Inc. (SIX) and the Boston
Scientific Corporation (NYSE) Endoscopy business, both multi-billion dollar companies, where he managed the
medical products acquisition and licensing transactions along with other senior management roles. Bob has a
bachelor’s degree in mechanical engineering and an MBA from the University of Massachusetts and a juris doctorate
from the New Hampshire School of Law. Additionally, he is a registered patent attorney, a named inventor on 13
patents and pending applications in the medical device sector and joint inventor of the X-PLO2R portable oxygen
concentrator. Bob joined the Board in August 2016.
Anthony “Tony” Dyer - Chief Financial Officer
Tony has over ten years’ experience in acting as a public company chief financial officer. Between 2004 and 2017 he
led the finance function and played a key strategic role in Gattaca plc becoming one of the UK’s leading engineering
and technology recruiters growing from one office, 40 staff and revenues of £30 million in 1996 to 14 offices in ten
countries, 800 staff and global revenues of £650 million in 2017, 30 per cent. of which was generated outside the UK.
Tony was a core member of the team that completed the over-subscribed fundraising and admission to trading on
AIM of Gattaca plc (then Matchtech Group plc). He also led the successful £60 million acquisition and integration of
AIM quoted Networkers International plc. Tony joined the Board in November 2017.
Dr. Patrick Strollo - Non-Executive Director
Dr. Strollo is Professor of Medicine and Clinical and Translational Science at the University of Pittsburgh. He has been
an active member of the American Thoracic Society and the American Academy of Sleep Medicine for over 25 years.
By profession, Dr. Strollo is a pulmonologist and has been in practice for over 20 years, he has over 100 publications
that include 81 papers in peer reviewed journals in Sleep and Pulmonary Medicine, and 67 book chapters and invited
papers. Dr. Strollo also served the United States Air Force for 31 sixteen years and ultimately rose to the rank of
Lieutenant colonel. Patrick joined the Board in April 2021.
David Poutney – Non-Executive Director
David is Chief Executive of Dowgate Capital Limited. Previously he was Head of Corporate Broking at Numis Securities
Limited and Numis Corporation Plc, where he was an Executive Director until he stood down in February 2016. He
started his career in commercial banking before becoming a number one ranked financials analyst at a number of
leading firms including BZW, James Capel and UBS. In his 20 years as a corporate broker, David worked directly on
the listings of over 30 companies. He is currently a Non-Executive Director of AIM quoted Franchise Brands plc. David
joined the Board in May 2021.
Richard (“Ric”) Piper - Non-Executive Director
Ric read Economics at Cambridge University and qualified as a Chartered Accountant in 1977. He held senior finance
roles in ICI, Citicorp, Logica and WS Atkins, where he was Group Finance Director from 1993 to 2002. He is currently a
non-executive director of AIM-quoted GRCI plc and a partner at Restoration Partners. A former member of the
Financial Reporting Review Panel, in the last five years he has also been chairman of Main-Listed Lakehouse plc and
AIM-quoted Checkit plc and Turbo Power Systems, Inc plc and a non-executive director of Main-Listed Waterman
Group plc and AIM-quoted Gattaca plc. Ric joined the Board in May 2021.
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Belluscura plc
Report and financial statements for the year to 31 December 2021
Board Governance
The Directors acknowledge the importance of high standards of corporate governance and intend, given the
Company’s size and the constitution of the Board, to comply with the principles set out by the Quoted Companies
Alliance (“QCA”) in the QCA Code.
AIM-quoted companies are required to adopt a recognised corporate governance code with effect from their
admission to trading on AIM however, there is no prescribed corporate governance regime for AIM companies. The
QCA has published the QCA Code, a set of corporate governance guidelines, which include a code of best practice,
comprising principles intended as a minimum standard, and recommendations for reporting corporate governance
matters. The Directors acknowledge the importance of high standards of corporate governance and intend, given
the Company’s size and the constitution of the Board, to comply with the principles set out in the QCA Code.
Since Admission, the Board has comprise of six Directors, two executive and four non-executive directors, reflecting
a blend of different experiences and backgrounds. The Board believes that the composition of the Board brings a
desirable range of skills and experience in light of the Company’s challenges and opportunities following Admission,
while at the same time ensuring that no individual (or a small group of individuals) can dominate the Board’s decision
making. The Board meets regularly (typically monthy) to review, formulate and approve the Group’s strategy,
budgets, corporate actions and oversee the Group’s progress towards its goals.
The Company has established an Audit Committee, a Remuneration Committee and a Nomination Committee, each
with formally delegated duties and responsibilities and with written terms of reference. From time to time, separate
committees may be set up by the Board to consider specific issues when the need arises.
Audit committee
The Audit Committee has primary responsibility for monitoring the quality of internal controls and ensuring that the
financial performance of the Company is properly measured and reported on. It will receive and review reports from
the Company’s management and auditors relating to the interim and annual accounts and the accounting and
internal control systems in use throughout the Company. The Audit Committee meets regularly in each financial
year, including ahead of the publication of the interim and annual accounts. It has unrestricted access to the
Company’s auditors, including for agreeing the audit plan. Members of the Audit Committee are Adam Reynolds,
David Poutney and Ric Piper, with Ric Piper acting as chairman.
Remuneration committee
The Remuneration Committee will review the performance of the executive Directors and make recommendations
to the Board on matters relating to their remuneration and terms of employment. It will also make recommendations
to the Board on proposals for the granting of share options and other equity incentives pursuant to any share option
scheme or equity incentive scheme in operation from time to time. In exercising this role, the Directors shall have
regard to the recommendations put forward in the QCA Code. No director is permitted to participate in discussions
or decisions concerning his own remuneration. The Remuneration Committee will meet not less than twice in each
financial year. Members of the Remuneration Committee are Adam Reynolds, David Poutney and Ric Piper, with
Adam Reynolds acting as chairman.
Nomination committee
The Nomination Committee will lead the process for board appointments and make recommendations to the Board.
The Nomination Committee shall evaluate the balance of skills, experience, independence and knowledge on the
board and, in the light of this evaluation, prepare a description of the role and capabilities required for a particular
appointment. The Nomination Committee will meet as and when necessary, but at least once each year. Members
of the Nomination Committee are Adam Reynolds, David Poutney and Ric Piper, with Adam Reynolds acting as
chairman.
Board Independence
In line with the QCA Code the Board has considers that Adam Reynolds, Dr Patrick Strollo and Ric Piper are
independent directors. David Poutney is a substantial shareholder in the Company and is not considered
independent. Mr Reynolds has assisted the Company by introducing investors since 2019. The Board does not
consider Mr Reynolds’ involvement in this capacity adversely impacts the assessment of his independence.
By order of the Board of Directors and signed on behalf of the Board
Tony Dyer
Chief Financial Officer
28 March 2022
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Belluscura plc
Report and financial statements for the year to 31 December 2021
DIRECTORS’ REPORT FOR THE YEAR ENDED 31 DECEMBER 2021
The Directors present their annual report and the audited financial statements for the year ended 31 December 2021.
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 public English company limited by shares 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 licence and development agreement with Separation
Design Group (“SDG”) to complete the development of the X-PLOR, 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-PLOR licence. X-PLOR received 510k clearance from the FDA on 2 March 2021.
Further information about the business (including an indication of likely future developments in the business and
particulars of significant events which have occurred since the end of the financial year) is provided in the Group’s
Strategic Report, being together the Chairman’s Statement on page 3, the Chief Executive’s Review on page 3 and
the Financial Review on page 4.
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 2021.
Directors
The following Directors held office during the period, and to the date of this report.
Adam Reynolds
Robert (“Bob”) Rauker
Anthony (“Tony”) Stephen Dyer
Dr Patrick Strollo
David Poutney
Richard (“Ric”) John Piper
Appointed
21 April 2021
18 August 2016
13 November 2017
12 April 2021
28 May 2021
28 May 2021
Going concern
US FDA 510(k) clearance of the Group’s X-PLOR was received on 2 March 2021. The subsequent successful IPO on the
AIM market of the London Stock Exchange on 28 May 2021, raised £17.5m ($24.5m) before expenses. The Group has
commenced manufacturing of the X-PLOR, launched in September 2021, and the follow-on products, the X-PLOR CX
and X-PLOR DX, are expected to be commercialised within the next 12 months. The Group had $15.6 million cash at
the period end and the Directors have produced budgets and cashflow forecasts which show sufficient cash
resources for the next 12 months. On this basis, the Directors have concluded that the Group will have adequate
resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt
the going concern basis in preparing these Financial Results.
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
Directors’ emoluments are detailed in note 7.1.
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Belluscura plc
Report and financial statements for the year to 31 December 2021
Directors’ beneficial interests in shares
Adam Reynolds
Robert Rauker
Anthony Dyer
Dr Patrick Strollo
David Poutney
Ric Piper
As at 10 March 2021
No of Shares
1,634,471
955,684
778,345
-
11,605,731
80,000
As at 31 December 2021
No of Shares
1,634,471
955,684
778,345
-
11,605,731
80,000
Disclosure of information to auditor
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.
Auditor
In accordance with Section 489 of the Companies Act 2006, a resolution for the re-appointment of Jeffries Henry 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
28 March 2022
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Belluscura plc
Report and financial statements for the year to 31 December 2021
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 UK as adopted IFRS 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 UK;
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.
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Belluscura plc
Report and financial statements for the year to 31 December 2021
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BELLUSCURA PLC
Opinion
We have audited the financial statements of Belluscura Plc (the ‘parent company’) and its subsidiaries (‘the group’)
for the year ended 31 December 2021 which comprise 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 to the financial statements, including significant accounting policies. The financial reporting framework that
has been applied in the preparation of the group financial statements is applicable law and UK adopted
international accounting standards. The financial reporting framework that has been applied in the preparation of
the parent company financial statements is applicable law and United Kingdom Accounting Standards, including
Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted
Accounting Practice).
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 2021 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with UK adopted international
accounting standards;
the parent company financial statements have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice;
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 under those standards are further described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We are independent of the group an the parent company in
accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director’s use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’
assessment of the group’s and parent company’s ability to continue to adopt the going concern basis of
accounting included review of current cash reserves and critical review of forecasts for a period of at least 12
months from when the financial statements are authorised for issue.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the group’s ability to continue as a going
concern for a period of at least 12 months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements. In particular, we looked at where the directors made subjective judgments, for example in
respect of significant accounting estimates that involved making assumptions and considering future events that
are inherently uncertain. As in all of our audits we also addressed the risk of management override of internal
controls, including evaluating whether there was evidence of bias by the directors that represented a risk of
material misstatement due to fraud.
How we tailored the audit scope:
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the
financial statements as a whole, taking into account the Company, the accounting processes and controls, and
the industry in which they operate.
We performed audits of the complete financial information of Belluscura Plc and Belluscura LLC.
11
Belluscura plc
Report and financial statements for the year to 31 December 2021
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all
risks identified by our audit.
Key audit matter How our audit addressed the key audit
matter
Carrying value of intangible assets and capitalisation of
development costs
The Group undertakes research and development activity, in
respect of the licences it holds. As at the year end the Group
holds intangible assets of $6,535,385 (2020: $4,129,660).
The development costs are amortized in a straight line over
10 years, a period that the directors consider reasonable
based on the life of the patents behind the development.
Carrying value of intangible assets and capitalisation of
development costs
Under IAS 38 there are strict capitalisation criteria, being that
the intangible asset can be measured reliably and there is
probable economic future benefit attributable to the asset.
We have evaluated the capitalised development costs
against these criteria for reasonableness.
We have assessed the useful economic life of eth assets and
found it to be reasonable.
We have reviewed the assets for any indicators of impairment
given the Group is loss making. No impairment was required
following a critical review of discounted cashflow forecasts.
Our application of materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures
and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a
whole.
Based on our professional judgment, we determined materiality for the financial statements as a whole as follows:
Overall materiality
How we determined it
Rationale for
benchmark applied
Company financial statements
£183,000 or $247,000
Based on 1% of gross assets limited by group
materiality
We believe that gross assets is a primary
measure used by shareholders in assessing
the performance of the Company and is a
generally accepted auditing benchmarks.
Group financial statements
$260,000
Based on 1% of gross assets
We believe that gross assets
is a primary
measure used by shareholders in assessing the
performance of the Company and is a generally
accepted auditing benchmarks.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit
above $13,000 as well as misstatements below those amounts that, in our view, warranted reporting for qualitative
reasons.
Other information
The other information comprises the information included in the annual report, other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information contained
within the annual report. Our opinion on the financial statements does not cover the other information and, except
to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
12
Belluscura plc
Report and financial statements for the year to 31 December 2021
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
•
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or the
directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:
•
adequate accounting records have not been kept by the parent company, or returns adequate for our audit
have not been received from branches not visited by us; or
•
the parent company financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement (page 10), the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent
company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is
detailed below:
The extent to which the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including
fraud and non-compliance with laws and regulations, was as follows:
•
the senior statutory auditor ensured the engagement team collectively had the appropriate competence,
capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
• we focused on specific laws and regulations which we considered may have a direct material effect on the
financial statements or the operations of the company.
• we assessed the extent of compliance with the laws and regulations identified above through making
•
enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained
alert to instances of non-compliance throughout the audit.
13
Belluscura plc
Report and financial statements for the year to 31 December 2021
We assessed the susceptibility of the company’s financial statements to material misstatement, including
obtaining an understanding of how fraud might occur, by:
• making enquiries of management as to where they considered there was susceptibility to fraud, their
•
knowledge of actual, suspected and alleged fraud;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and
regulations.
To address the risk of fraud through management bias and override of controls, we:
• performed analytical procedures to identify any unusual or unexpected relationships;
•
•
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates set out in
Note 3 were indicative of potential bias;
investigated the rationale behind significant or unusual transactions.
•
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures
which included, but were not limited to:
•
agreeing financial statement disclosures to underlying supporting documentation;
•
reading the minutes of meetings of those charged with governance;
•
enquiring of management as to actual and potential litigation and claims;
• Obtaining confirmation of compliance from the company’s legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and
regulations are from financial transactions, the less likely it is that we would become aware of non-compliance.
Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations
to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if
any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they
may involve deliberate concealment or collusion.
A further description of our responsibilities for the audit of financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
Our audit opinion is consistent with the additional report to the audit committee.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members
those matters we are required to state to them in an auditor’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.
Sanjay Parmar
Senior Statutory Auditor
For and on behalf of
Jeffreys Henry Audit Limited
Finsgate 5-7 Cranwood Street
London EC1V 9EE
28 March 2022
14
Belluscura plc
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER
COMPREHENSIVE INCOME
For the year ended 31 December 2021
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
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
Note
5
6.1
6.2
8
9
2021
US $
420,316
(472,487)
(52,171)
209,690
(5,344,176)
(5,186,657)
2020
US $
-
-
-
11,493
(1,956,682)
(1,945,189)
(26,837)
(32,956)
(26,837)
(32,956)
(5,213,494)
(1,978,145)
-
-
(5,213,494)
(1,978,145)
(1,153,148)
(1,153,148)
391,737
391,737
Total comprehensive loss for the year attributable to the equity holders
(6,366,642)
(1,586,408)
Earnings per share
Basic: Loss per share
Diluted: Loss per share
10
10
(0.055)
(0.055)
(0.036)
(0.036)
Items in the statement above are disclosed net of tax.
The notes on pages 21 to 41 are an integral part of these consolidated financial statements.
15
Belluscura plc
CONSOLIDATED BALANCE SHEET
As at 31 December 2021
Group
Assets
Non-current assets
Tangible assets
Intangible assets
Product development
Right of use asset
Non-current assets
Current assets
Inventory
Trade and other receivables
Cash and cash equivalents
Current assets
Total assets
Current liabilities
Trade and other payables
Current liabilities
Non-current liabilities
Trade and other payables
Non-current liabilities
Total liabilities
Net assets
Equity attributable to the owners of the parent
Share capital
Share premium
Capital contribution
Retained earnings
Translation reserve
Total equity
Note
2021
US $
2020
US $
12
13
13
12
14
15
16
20
20
18
18
19
19
19
47,156
-
6,723,883
277,803
7,048,842
309,159
3,059,363
15,587,552
18,956,074
13,818
-
4,129,660
375,852
4,519,330
-
197,653
520,070
717,723
26,004,916
5,237,053
(1,084,601)
(1,084,601)
(230,136)
(230,136)
(247,823)
(247,823)
(338,053)
(338,053)
(1,332,424)
(568,189)
24,672,492
4,668,864
1,548,227
26,025,760
165,000
(2,349,966)
(716,529)
24,672,492
823,201
556,683
165,000
2,687,361
436,619
4,668,864
The notes on pages 21 to 41 are an integral part of these financial statements.
The financial statements on pages 15 to 41 were authorised for issue by the Board of Directors on 28 March 2022
and were signed on its behalf.
Robert Rauker
Chief Executive Officer
Tony Dyer
Chief Financial Officer
Belluscura plc
registered number 09910883
16
Belluscura plc
COMPANY BALANCE SHEET
At 31 December 2021
Company
Assets
Non-current assets
Tangible assets
Intangible assets
Loans to subsidiaries
Non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Current assets
Total assets
Current liabilities
Trade and other payables
Current liabilities
Non-current liabilities
Trade and other payables
Non-current liabilities
Total liabilities
Net assets
Equity attributable to the owners of the parent
Share capital
Share premium
Capital contribution
Retained earnings
Translation reserve
Total equity
Note
2021
US $
2020
US $
12
13
15
15
16
20
20
18
18
19
19
19
5,077
-
14,570,635
14,575,712
-
-
6,245,745
6,245,755
707,230
13,063,238
13,770,468
187,681
317,606
505,287
28,346,180
6,751,042
(86,677)
(86,677)
(62,907)
(62,907)
(23,026)
(23,026)
-
-
(109,703)
(62,907)
(28,236,477)
6,688,135
1,548,227
26,025,760
165,000
1,214,019
(716,529)
28,236,477
823,201
556,683
165,000
4,706,632
436,619
6,688,135
The Parent Company’s loss before tax for the period 31 December 2021 was $3,668,779 (2020: $1,649,098).
The Group has used the exemption under S408 CA 2006 not to disclose the company income statement.
The notes on pages 21 to 41 are an integral part of these financial statements.
The financial statements on pages 15 to 41 were authorised for issue by the Board of Directors on 28 March 2022.
Robert Rauker
Chief Executive Officer
Belluscura plc
registered number 09910883
Tony Dyer
Chief Financial Officer
17
Belluscura plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2021
Attributable to equity holders of the parent company
Group
Balance at 31 December 2019
Note
Ordinary
Shares
US $
648,298
Share
Premium
US $
5,714,678
Translation
Reserve
US $
Capital
Contribution
US $
44,882
165,000
Retained
earnings
US $
(2,844,929)
Total
US $
3,727,929
Issue of ordinary shares
Reduction in capital
18
174,903
-
2,233,896
(7,391,891)
-
-
Loss for the year
19
Other comprehensive income 19
Total comprehensive income
-
-
-
-
-
-
-
391,737
391,737
-
-
-
-
-
-
7,391,891
2,408,799
-
(1,978,145)
-
(1,978,145)
(1,978,145)
391,737
(1,586,408)
Share based payments
Balance at 31 December 2020
19
-
823,201
-
556,683
-
436,619
-
165,000
118,544
2,687,361
118,544
4,668,864
Balance at 31 December 2020
823,201
556,683
436,619
165,000
2,687,361
4,668,864
Issue of ordinary shares
18
725,026
25,469,077
Loss for the year
19
Other comprehensive income 19
Total comprehensive income
Share based payments
Balance at 31 December 2021
19
(1,153,148)
(1,153,148)
(5,213,494)
(5,213,494)
26,194,103
(5,213,494)
(1,153,148)
(6,366,642)
1,548,227
26,025,760
(716,529)
165,000
176,167
(2,349,966)
176,167
24,672,492
The notes on pages 21 to 41 are an integral part of these financial statements.
18
Belluscura plc
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2021
Attributable to equity holders of the parent company
Group
Balance at 31 December 2019
Note
Ordinary
Shares
US $
648,298
Share
Premium
US $
5,714,678
Translation
Reserve
US $
Capital
Contribution
US $
44,882
165,000
Retained
earnings
US $
(1,154,705)
Total
US $
5,418,153
Issue of ordinary shares
Reduction in capital
18
174,903
-
2,233,896
(7,391,891)
-
-
-
-
-
7,391,891
2,408,799
-
Loss for the year
19
Other comprehensive income 19
Total comprehensive income
-
-
-
-
-
-
-
391,737
391,737
- (1,649,098)
-
-
(1,649,098)
-
(1,649,098)
391,737
(818,366)
Share based payments
Balance at 31 December 2020
19
-
823,201
-
556,683
-
436,619
-
165,000
118,544
4,706,632
118,544
6,688,135
Balance at 31 December 2020
823,201
556,683
436,619
165,000
4,706,632
6,688,135
Issue of ordinary shares
18
725,026
25,469,077
Loss for the year
19
Other comprehensive income 19
Total comprehensive income
Share based payments
Balance at 31 December 2021
19
(1,153,148)
(1,153,148)
(3,668,780)
(3,668,780)
26,194,103
(3,668,780)
(1,153,148)
(4,821,928)
1,548,227
26,025,760
(716,529)
165,000
176,167
1,214,019
176,167
28,236,477
The notes on pages 21 to 41 are an integral part of these financial statements.
19
Belluscura plc
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2021
Group
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
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 year
Exchange loss on cash and cash equivalents
Cash and cash equivalents at end of year
Note
2021
US $
2020
US $
24
12
13
18
22
(7,289,072)
-
(7,289,072)
(1,470,773)
-
(1,470,773)
(45,461)
(2,750,997)
(2,796,458)
-
(1,194,432)
(1,194,432)
25,469,077
(108,392)
25,360,685
15,275,155
520,070
(207,673)
15,587,552
2,251,774
(118,859)
2,132,915
(532,290)
1,033,512
18,848
520,070
The notes on pages 21 to 41 are an integral part of these financial statements.
20
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
1.
General Information
Belluscura plc is a public company limited by shares 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 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.
2.1
Accounting Policies
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.
These consolidated financial statements are prepared in accordance with United Kingdom adopted
International Financial Reporting Standards (IFRS) and issued by the International Accounting Standards
Board (IASB). The consolidated financial statements are presented in US Dollars, the Group’s functional
currency.
The financial statements for the Company have been prepared in accordance with Financial Reporting
Standard 101 by applying the recognition and measurement requirements of United Kingdom adopted
International Financial Reporting Standards (“IFRS”), amended where necessary in order to comply with
Companies Act 2006. The Company has notified shareholders of this disclosure.
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.
a Cash Flow Statement and related notes;
In these financial statements, the company has applied the exemptions available under FRS 101 in respect
of the following disclosures:
•
• Disclosures in respect of transactions with wholly owned subsidiaries;
• Disclosures in respect of capital management;
•
• Disclosures in respect of the compensation of Key Management Personnel;
• Related party transactions with wholly owned members of the group
The effects of new but not yet effective IFRSs; and
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 Going concern
US FDA 510(k) clearance of the Group’s X-PLOR was received on 2 March 2021. The subsequent successful
IPO on the AIM market of the London Stock Exchange on 28 May 2021, raised £17.5m ($24.5m). The Group
has commenced manufacturing of the X-PLOR, launched in September 2021, and the follow-on products,
the X-PLOR CX and X-PLOR DX, are expected to be commercialised within the next 12 months. The Group
had $15.6 million cash at the year end and the Directors have produced budgets and cashflow forecasts
which show sufficient cash resources for the next 12 months. On this basis, the Directors have concluded
that the Group will have adequate resources to continue in operational existence for the foreseeable future.
For these reasons, they continue to adopt the going concern basis in preparing these Financial Results.
2.1.2 Measurement convention
The financial statements are prepared on the historical cost basis except that assets and liabilities are stated
at their fair value.
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.
21
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
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. 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
(a) Functional and presentation currency
These consolidated financial statements are presented in US Dollars which is the presentation currency
of the Group, 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 year-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 year (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)
all resulting exchange differences are recognised in other comprehensive income.
(ii)
(iii)
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.
22
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
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.
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.
2.6
2.7
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.
Interest income and expenses
Interest income and interest payable is recognised in profit or loss as it accrues, using the effective interest
method.
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: Furniture - 5
years; 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.
23
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
2.8
Intangible assets
Licences and development costs
Costs associated with the acquisition of Licences 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.
Further development costs attributable to the licenced technology and recognised as an intangible asset
when the following criteria are met:
(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)
(v) adequate technical, financial and other resources to complete the development and to use or sell the
it is technically feasible to complete the technology for commercialisation so it will be available for use;
it can be demonstrated how the technology will generate probable future economic benefits;
technology are available; and
(vi) the expenditure attributable to the technology during its development can be reliable measured.
Licences and their associated development costs are amortised over the life of the licence or the underlying
patents, whichever is shorter. The estimated useful life of the licences and development costs 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.
24
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
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.
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
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.
is subsequently depreciated using the straight-line method
The right-of-use asset
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.
25
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
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,
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
(liabilities under $5,000 per annum) and short-term leases (less than 12 months). 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 First In, First Out (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 Equity
Share capital and share premium
The share capital account has been established to represent the nominal value for all share issues. 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 for which no consideration is given.
Retained earnings
Retained earnings are the consolidated retained earnings and share based payments reserve for the group
or company.
Translation reserve
The translation reserve is the accumulated reserves created by Foreign Exchange Differences on the
consolidation of group balances into the reporting currency of US$.
26
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
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.
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.
27
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
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.
Income is derived from the sale of goods when the goods have been shipped to the customer.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective
interest rate applicable.
2.22 Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is
reasonable assurance that the grant conditions will be met and the grants will be received. A grant that
specifies performance conditions is recognised in income when the performance conditions are met. Where
a grant does not specify performance conditions it is recognised in income when the proceeds are received
or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability
3.
3.1
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.
Financial risk factors
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 $15,587,552. The contractual maturities of financial liabilities are shown in
note 17.
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 2021
5,579,784
20,945,635
(109,704)
26,415,715
31 December 2020
317,606
10,380,745
(62,908)
10,635,443
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 2021 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.
28
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
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 2020.
2021
US $
(2,641,571)
Equity
2020
US $
(1,063,544)
Profit or Loss
2021
US $
(2,641,571)
2020
US $
(1,063,544)
A 10% percent weakening of the above currencies against the pound sterling at 31 December 2021 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.
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:
Weighted
average rate
for 2020
1.2841
Weighted
average rate
for 2021
1.3751
Closing rate
for 2020
1.3652
Closing rate
for 2019
1.3270
US Dollar
Closing rate
for 2021
1.3534
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) Intangible fixed assets (see note 13)
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 licenced technology and recognised
as an intangible asset when the criteria in note 2.8 are met.
29
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
(b) Impairment reviews
The Group undertakes an impairment review annually, or more frequently if events or changes in
circumstances indicate that the carrying value may not be recoverable. In respect of impairment
reviews, the key assumptions are as follows:
• Growth rates. The value in use of the intangible assets is calculated from cash flow projections for
the relevant business activities based on the latest financial projections covering the anticipated
useful economic life of the intangible assets.
• Discount rates. The pre-tax discount rate used to calculate value is determined in relation to the
relevant business activities and their geographic location, using external benchmarks where
possible to arrive at a relevant weighted average cost of capital.
(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 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.
Segmental reporting
The chief operating decision makers consider that in the year to 31 December 2021 there is only one
operating segment, being the sale of oxygen concentrators in the United States. The Group generated
revenue of $420,316 in the year (2020: $nil). All sales were in the United States.
6.
Other operating income and administrative expenses
6.1 Other operating income
Group
Grants
Purchase of option right
SBA Loan forgiveness
Total
6.2 Expenses by nature
Group
Depreciation of property plant and equipment
Depreciation of right of use asset
Amortisation of product development
Costs related to fundraising activities
Realised and Unrealised foreign exchange movements
Employee benefit expense
IFRS2 Share Based Payment Charge
Surrendered Share Options
Sales & Marketing
Other administration expenses
Administration expenses
2021
US$
6,876
-
202,814
209,690
2021
US $
14,531
98,049
156,774
646,042
(734,678)
1,838,779
180,091
611,947
1,118,472
1,414,169
5,344,176
2020
US$
6,421
5,072
-
11,493
2020
US $
8,544
98,049
-
78,911
405,370
911,327
111,350
-
-
343,131
1,956,682
P&L foreign exchange movements in Other Comprehensive Income
Total expenses
1,153,148
6,497,324
(391,737)
1,564,945
As disclosed in the Admission Document, published ahead of admission to trading on AIM in May 2021,
Robert Rauker agreed to surrender part of the options over 439,373 ordinary shares granted on 29 October
2019 and over 815,496 ordinary shares granted on 7 May 2020 in exchange for a cash payment. The
consideration paid by the Company to Mr Rauker in relation to the surrender of the respective parts of Mr
Rauker’s options was calculated based on the difference between the Placing Price of 45p per share and the
exercise price per Share payable by the Option Holder for the respective option multiplied by the number
of Shares that are being surrendered. This amount is included within Employee Benefit Expense.
30
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
6.3 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 for other services
-
Total
Tax advisory services
2021
US$
2020
US$
35,753
37,098
1,375
37,128
7,705
44,803
7.
Employees
7.1 Directors’ emoluments
Adam Reynolds
Robert Rauker
Anthony Dyer
Dr Patrick Strollo
David Poutney
Ric Piper
Total
Salary & fees
US $
47,414
314,172
283,329
28,333
24,285
28,333
715,866
Benefits in kind
US $
-
39,713
11,539
-
-
-
51,252
Pension
US $
-
21,454
15,381
-
-
-
36,835
2021
US $
47,414
375,339
310,249
28,333
24,285
28,333
813,953
2020
US $
-
231,105
173,230
-
-
-
404,335
No Directors received or exercised share options during the year. On 7 December 2021 Robert Rauker
exercised 179,537 Warrant Shares at an average price of 13.45 pence per share and Tony Dyer exercised
141,404 Warrant Shares at a price of 13.00 pence per share.
7.2
Employee benefit expense
Group
Wages and salaries
Social security costs
Medical Insurance
Pension and other benefits
Share based payments
Surrendered Share Options
Total employee benefit expense
7.3
Average number of people employed
Group
Average number of people (including executive directors) employed
Directors
Operations
Administration
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
2021
US$
1,536,707
122,759
130,961
48,352
1,838,779
180,091
611,947
2,630,817
2020
US$
765,854
61,396
84,077
-
911,327
111,350
-
1,022,677
2021
US$
2020
US$
2
7
2
11
2021
US$
26,837
-
26,837
2
4
-
6
2020
US$
32,443
513
32,956
31
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
9.
Income tax expense
Group
Current tax on profits for the year
Adjustments in respect of prior year
Total current tax
Income tax expense
2021
US$
-
-
-
-
2020
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
2021
US$
(5,213,493)
2020
US$
(1,978,145)
(1,042,493)
(403,628)
(129,212)
(9,431)
1,181,342
-
36,150
(2,760)
370,238
-
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
Earnings/(Loss) per share
Group
Profit/(Loss) for the year US$
Weighted Average Shares in Issue
Basic Loss per Share US$
Weighted Average Shares, Warrants and Options in Issue
Diluted Loss per Share US$
2021
US$
(5,213,494)
2020
US$
(1,978,145)
94,724,153
(0.055)
109,794,921
(0.055)
55,598,175
(0.036)
75,534,490
(0.036)
All potentially dilutive items are disregarded for the purpose of the diluted earnings per share as they are
considered antidilutive.
11.
Investment in subsidiaries
Company
Cost and net book value
Balance at 31 December 2020
Balance at 31 December 2021
Shares in
subsidiaries
10
-
Total
US $
10
-
Principal
subsidiaries
name
Belluscura LLC
Country of
Incorporation &
place of business
USA
Class of
share
held
Ordinary
% of ordinary shares
directly held
2021 2020
100% 100%
Nature of business
Sale of medical devices
Registered office of Belluscura LLC is 160 Greentree Drive, Suite 101, Dover, Delaware 19904, County of Kent
32
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
12.
Property, plant and equipment
Group
Cost
At 1 January 2020
Additions during the year
Disposals during the year
At 31 December 2020
At 1 January 2021
Additions during the year
Disposals during the year
At 31 December 2021
Accumulated depreciation
At 1 January 2020
Depreciation charge for the year
Depreciation charge on disposals
At 31 December 2020
At 1 January 2021
Depreciation charge for the year
Depreciation charge on disposals
At 31 December 2021
Net book value
At 31 December 2020
At 31 December 2021
Land & buildings
(Right of Use Asset)
US$
571,950
-
-
571,950
Furniture and
Equipment
US $
35,880
-
-
35,880
Computer
Equipment
US $
7,034
-
-
9,581
571,950
-
-
571,950
(98,049)
(98,049)
-
(196,098)
(196,098)
(98,049)
-
(294,147)
35,880
16,162
-
52,042
(16,224)
(7,176)
-
(23,400)
(23,400)
(8,629)
-
(32,029)
9,581
31,706
(7,034)
34,253
(6,876)
(1,367)
-
(8,243)
(8,243)
(5,902)
7,035
(7,110)
Total
US $
614,864
-
-
617,411
617,411
47,868
(7,034)
658,245
(121,149)
(106,592)
-
(227,741)
(227,741)
(112,580)
7,035
(333,286)
375,852
277,803
12,480
20,013
1,338
27,143
389,670
324,959
Right-of-use assets related to lease properties that do not meet the definition of investment properties are
presented as Land & Building (see note 22).
Company
Cost
At 1 January 2020
Additions during the year
Disposals during the year
At 31 December 2020
At 1 January 2021
Additions during the year
Disposals during the year
At 31 December 2021
Accumulated depreciation
At 1 January 2020
Depreciation charge for the year
Depreciation charge on disposals
At 31 December 2020
At 1 January 2021
Depreciation charge for the year
Depreciation charge on disposals
At 31 December 2021
Net book value
At 31 December 2020
At 31 December 2021
Furniture and
Equipment
US $
-
-
-
-
Computer
Equipment
US $
-
-
-
-
-
2,103
-
2,103
-
-
-
-
(297)
-
-
(297)
-
1,806
-
3,909
-
3,909
-
-
-
-
(638)
-
-
(638)
-
3,271
Total
US $
-
-
-
-
-
6,011
-
6,011
-
-
-
-
(935)
-
-
(935)
-
5,077
33
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
13.
Intangible assets
Group
Cost
At 1 January 2020
Additions during the year
At 31 December 2020
At 1 January 2021
Additions during the year
Disposal during the year
At 31 December 2021
Accumulated amortisation and impairment
At 1 January 2020
At 31 December 2020
At 1 January 2021
Amortisation in the year
Disposal during the year
At 31 December 2021
Net book value
At 31 December 2020
At 31 December 2021
Company
Cost
At 1 January 2020
Additions during the year
At 31 December 2020
At 1 January 2021
Additions during the year
Disposal during the year
At 31 December 2021
Accumulated amortisation and impairment
At 1 January 2020
At 31 December 2020
At 1 January 2021
Amortisation in the year
Disposal during the year
At 31 December 2021
Net book value
At 31 December 2020
At 31 December 2021
14.
Inventory
Group
Finished goods
Total inventory
Company
The Company held no inventory.
Purchased intangible assets
Licences
US $
189,506
-
189,506
189,506
-
(189,506)
-
(189,506)
(189,506)
(189,506)
-
189,506
-
Product
Development
US$
3,205,378
1,194,432
4,399,810
4,399,810
2,750,997
-
7,150,807
Total
US$
3,394,884
1,194,432
4,589,316
4,589,316
2,750,997
(189,506)
7,150,807
(270,150)
(270,150)
(459,656)
(459,656)
(270,150)
(156,774)
-
(426,924)
(459,656)
(156,774)
189,506
426,924
-
-
4,129,660
6,723,883
4,129,660
6,723,883
Purchased intangible assets
Licences
US $
189,506
-
189,506
189,506
-
(189,506)
-
(189,506)
(189,506)
(189,506)
-
189,506
-
-
-
2021
US $
309,159
309,159
Total
US$
189,506
-
189,506
189,506
-
(189,506)
-
(189,506)
(189,506)
(189,506)
-
189,506
-
-
-
2020
US $
-
-
34
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
15.
Trade and other receivables
Group
Trade receivables
Less provision for impairment of trade receivables
Trade receivables – net
VAT
Deposits, prepayments and other debtors
Total trade and other receivables
2021
US $
224,918
-
224,918
216,136
2,618,309
3,059,363
2020
US $
-
-
-
16,146
9,972
197,653
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
29.
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
Ageing of trade receivables:
2021
US $
-
491,094
216,136
707,230
2020
US $
171,535
-
16,146
187,681
2021
US $
20,945,635
(6,375,000)
14,570,635
2020
US $
10,380,745
(4,135,000)
6,245,745
Group
2020
2021
0-30 days
US $
-
142,778
30-60 days
US $
-
78,920
60-90 days
US $
-
3,210
90+ days
US $
-
-
Total Gross
US $
-
224,918
ECL
US $
-
-
Total Net
US $
-
224,918
Company
The Company had no trade receivables.
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
5 years (2020: 7 years) so it is discounted over 5 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 become profitable
and cash positive within 2 years.
A 10% percent increase in the discount rate would increase the impairment by $540,000 (2020: $322,000)
and a 10% reduction in the discount rate would reduce impairment by $505,000 (2020: 337,000).
16.
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
2021
US $
15,587,552
15,587,552
2021
US $
13,036,238
13,036,238
The Groups exposure to foreign exchange risk is detailed in note 3 to the accounts on page 28.
2020
US $
520,070
520,070
2020
US $
317,606
317,606
35
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
17.
Categories of financial assets and financial liabilities
Group
Financial assets
Trade and other receivables at amortised cost
Receivables from shareholders
Cash and equivalents
Financial liabilities
Trade and other payables at amortised cost
Lease liability
COVID-19 Loan
Company
Financial assets
Loans and receivables at amortised cost
Provision
Net loans and receivables at amortised cost
Other receivables at amortised cost
Cash and equivalents
2021
US $
2020
US $
2,385,689
-
15,587,552
17,973,241
768,314
335,830
33,834
1,137,978
2021
US $
20,945,635
(6,375,000)
14,570,635
338,343
13,063,239
27,972,217
-
171,535
520,070
691,605
73,391
417,384
77,314
568,089
2020
US $
10,380,745
(4,135,000)
6,245,745
171,535
317,606
6,734,886
Financial liabilities
Trade and other payables at amortised cost
1,983
62,797
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:
Group
2020
Trade and other payables at amortised cost
Lease liability
COVID-19 Small Business Association Loan
2021
Trade and other payables at amortised cost
Lease Liability
COVID-19 Small Business Association Loan
Carrying
amount
US $
Contractual
cashflows
US $
1 year or
less
US $
1-5 years
US $
5 years
and over
US $
73,391
417,384
77,314
568,089
768,314
335,830
33,834
1,137,978
73,391
474,759
77,314
625,464
73,391
118,183
77,314
268,888
-
356,576
-
356,576
768,314
335,830
33,834
1,137,978
768,314
111,033
4,629
883,976
-
224,797
29,205
254,002
-
-
-
-
-
-
-
-
18.
Share capital and premium
Share capital
Group
Issued and fully paid up
At 1 January 2020
Shares issued for cash
Shares issued for cash received post year end
At 31 December 2020
At 1 January 2021
Shares issued for cash
At 31 December 2021
No of shares
of £0.01 each
Total
US $
49,132,482
12,887,361
885,918
62,905,761
62,905,761
50,929,683
113,835,444
648,298
163,653
11,250
823,201
823,201
725,026
1,548,227
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.
36
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
Share premium
Group
Allotted and fully paid up
At 1 January 2020
Premium on shares issued (net of cost of issue of shares)
Reduction in Capital
At 31 December 2020
At 1 January 2021
Premium on shares issued
Cost of issue of shares
At 31 December 2021
Ordinary Shares
US $
Total
US $
5,714,678
2,233,896
(7,391,891)
556,683
5,714,678
2,233,896
(7,391,891)
556,683
556,683
26,795,879
(1,326,802)
26,025,760
556,683
26,795,879
(1,326,802)
26,025,760
At the end of the year there were 1,666,665 share warrants in issue at an average subscription price of $0.50
(2020: 8,122,243 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 Grant Date.
Award
Unapproved
EMI
Unapproved
Unapproved
EMI
Unapproved
Unapproved
Unapproved
Unapproved
Unapproved
Unapproved
Unapproved
Unapproved
Total
2021
000’s
2020
000’s
4,893
1,882
100
60
10
100
100
40
20
40
20
20
20
530
6,775
Date of
Grant
07/05/2020
07/05/2020
07/04/2021
12/04/2021
28/05/2021
01/06/2021
14/06/2021
23/08/2021
13/09/2021
20/09/2021
25/10/2021
22/11/2021
01/12/2021
Exercise
Price
$0.195
$0.195
$0.195
$0.618
$0.639
$0.779
$0.699
$1.365
$1.287
$1.167
$1.390
$1.328
$1.285
Exercise Period
From To
07/05/2020
07/05/2020
07/04/2021
12/04/2021
28/05/2021
01/06/2021
14/06/2021
23/08/2021
13/09/2021
20/09/2021
25/10/2021
22/11/2021
01/12/2021
07/05/2030
07/05/2030
07/04/2031
12/04/2031
28/05/2031
01/06/2031
14/06/2031
23/08/2031
13/09/2031
20/09/2031
25/10/2031
22/11/2031
01/12/2031
Avg remaining
contractual life
8.6 years
8.6 years
9.3 years
9.3 years
9.4 years
9.5 years
9.5 years
9.7 years
9.7 years
9.7 years
9.8 years
9.9 years
9.9 years
Key assumptions used in the calculation of share option fair value
Date of
Grant
07/05/2020
07/05/2020
07/04/2021
12/04/2021
28/05/2021
01/06/2021
14/06/2021
23/08/2021
13/09/2021
20/09/2021
25/10/2021
22/11/2021
01/12/2021
Award
Unapproved
EMI
Unapproved
Unapproved
EMI
Unapproved
Unapproved
Unapproved
Unapproved
Unapproved
Unapproved
Unapproved
Unapproved
Share
price on
the date
of grant
$
0.195
0.195
0.195
0.618
0.639
0.779
0.699
1.365
1.287
1.167
1.390
1.328
1.285
Exercise
price
$
0.195
0.195
0.195
0.618
0.639
0.779
0.699
1.365
1.287
1.167
1.390
1.328
1.285
Volatility
%
28.5
28.5
28.5
28.5
28.5
28.5
28.5
28.5
28.5
28.5
28.5
28.5
28.5
Expected
Dividend
Yield
%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
(%)
Vesting
period
Years
2.50
2.50
3.17
3.17
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
Risk-free
rate of
interest
%
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.1
2.1
Fair
value
$
0.03
0.03
0.03
0.08
0.08
0.09
0.08
0.17
0.16
0.14
0.17
0.16
0.16
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 of return 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.
37
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
Movement in share options
Outstanding at 1 January 2020
Granted
Outstanding at 31 December 2020
Outstanding at 1 January 2021
Granted
Lapsed/forgiven
Outstanding at 31 December 2021
Share based payments charge
Group
Charge in year
19.
Reserves
Retained earnings
At 1 January 2020
Loss for the year
Reduction in Capital
Share based payments charge
At 31 December 2020
Loss for the year
Share based payments charge
At 31 December 2021
Number
000’s
5,655
6,775
12,430
12,430
530
(1,460)
11,500
Weighted average
exercise price
$
0.085
0.195
0.145
Weighted average
share price
$
0.078
0.195
0.142
0.145
0.788
0.202
0.167
2021
US $
180,091
0.142
0.788
0.135
0.172
2020
US $
118,544
Group
US $
(2,844,929)
(1,978,145)
7,391,891
118,544
2,687,361
(5,213,494)
176,167
(2,349,966)
Company
US $
(1,154,705)
(1,649,098)
7,391,891
118,544
4,706,632
(3,668,780)
176,167
(1,214,019)
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 2019
Capital contribution received
At 31 December 2020
Capital contribution received
At 31 December 2021
Group
US $
165,000
-
165,000
-
165,000
The Capital Contribution relates to the acquisition of intangible product licences.
Translation reserve
At 1 January 2020
Foreign exchange (loss)/gain
At 31 December 2020
Foreign exchange (loss)/gain
At 31 December 2021
Group
US $
44,882
391,737
436,619
(1,153,148)
(716,529)
Company
US $
165,000
-
165,000
-
165,000
Company
US $
44,882
391,737
436,619
(1,153,148)
(716,529)
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.
38
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
20.
Trade and other payables
Group – Current
Trade creditors
Social security and other taxes
Lease liability
COVID-19 Loans
Accruals and other creditors
Total current trade and other payables
Group – Non-current
COVID-19 Loans
Lease liability
Total non-current trade and other payables
There are no amounts included with lease liability repayable after five years
Company – Current
Trade creditors
Social security and other taxes
COVID-19 Loans
Accruals and other creditors
Total trade and other payables
Company – Non-current
COVID-19 Loans
Total trade and other payables
2021
US $
768,314
20,269
111,033
10,808
174,177
1,084,601
2021
US $
23,026
224,797
247,823
2021
US $
1,983
20,269
10,808
53,617
86,677
2021
US $
23,026
23,026
2020
US $
-
100
92,217
64,428
73,391
230,136
2020
US $
12,886
325,167
338,053
2020
US $
-
100
-
62,807
62,907
2020
US $
-
-
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 is detailed in note 3 to the accounts on page 28.
21.
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
2021
US $
(9,431)
57,113
-
2,815,024
2,805,593
(2,805,593)
-
2020
US $
(2,760)
23,642
-
2,035,030
2,055,912
(2,055,912)
-
2021
US $
-
57,113
470,400
433,772
961,285
(961,285)
-
2020
US $
-
23,642
201,400
332,088
557,130
(557,130)
-
39
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
22.
Leases as a lessee
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 2020
Depreciation charge for the year
At 31 December 2020
Depreciation charge for the year
At 31 December 2021
Land and
buildings
US$
473,901
(98,049)
375,852
(98,049)
277,803
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 2020
Interest
Payment
At 31 December 2020
At 1 January 2021
Interest
Payment
At 31 December 2021
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
2021
US $
26,837
98,049
2021
US $
108,391
Land and
buildings
US$
498,398
32,443
(113,457)
417,384
417,384
26,837
(108,391)
335,830
2021
US$
122,235
234,340
-
356,575
Total
US $
473,901
(98,049)
375,852
(98,049)
277,803
2020
US $
32,443
98,049
2020
US $
118,859
Total
US $
498,398
32,443
(113,457)
417,384
417,384
26,837
(108,391)
335,830
2020
US $
118,183
356,576
-
474,759
23. Dividends
No dividend has been declared for the year ended 31 December 2021 and no dividend was paid during the
year.
40
Belluscura plc
NOTES TO THE ACCOUNTS
For the year ended 31 December 2021
24. Cash generated from operating activities
Group
Loss before income tax
Adjustments for
- Depreciation
- ROU Depreciation
- Amortisation and impairment
- 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
2021
US $
(5,213,494)
14,531
98,049
156,774
26,837
333,842
180,091
(2,179,894)
(309,159)
(396,649)
(7,289,072)
2020
US $
(1,978,145)
8,544
98,049
-
32,956
(68,056)
111,350
81,268
-
243,261
(1,470,773)
25.
Contingent Liability
On 24 February 2017, the Company entered into a co-exclusive licence and development agreement with
Separation Design Group, LLC and SDG (together the “SDG Parties”) (“SDG Licence”) which was
subsequently amended by an amendment agreement dated 19 March 2021. Pursuant to the SDG Licence: if
by 3 September 2025, cumulative sales of the X-PLOR have not exceeded $20 million dollars, Belluscura
must make a one-time payment of $3 million to the SDG Parties to maintain the exclusive SDG licence.
26. Alternative Performance Measures
Operating Loss is reconciled to Adjusted Operating Loss as follows:
Group
IFRS2 Share Based Payment Charge
Surrendered Share Options
Total Comprehensive Loss for the year
Adjustments for
-
-
- Depreciation
- Amortisation
- Non-cash interest expense
- Costs of raising funds charge to P&L
-
Total Adjustments
Exchange differences
2021
US $
(6,366,642)
2020
US $
(1,586,408)
180,091
611,947
112,580
156,774
26,837
646,062
418,470
2,152,761
111,350
-
106,593
-
32,956
-
33,633
284,532
Adjusted Operating Loss
(4,213,881)
(1,301,876)
27. Related party transactions
As disclosed in the Admission Document, prior to Robert Rauker joining the Company, he undertook
independent patent work for Separation Design Group IP Holdings LLC (“SDG”). Pursuant to a Patent Broker
Agreement dated 22 October 2015 SDG entered into an agreement with Medicinus IP LLC (“Medicinus”), of
which Robert Rauker is the sole shareholder, under which Medicinus has agreed to facilitate the sale and/or
licence of intellectual property owned by SDG which includes soliciting potential buyers and licencees of
such intellectual property. In consideration for the provision of these services, Medicinus receives a fee of 12.5
per cent. of the licence fees, sales price and/or royalties received by SDG which will include 12.5 per cent. of
the royalties the Company will pay to SDG in relation to sales of the X-PLOR, pursuant to the agreement
entered into between SDG and the Company. The agreement can be terminated by either party by written
notice.
The non-executive fees paid to Adam Reynolds were paid through his company Reyco Limited.
In the period the Company paid $1,065,781 to Dowgate Capital Limited in relation to brokerage fees, research
and fundraising activities. David Poutney is the Chief Executive Officer of Dowgate Capital Limited.
28.
Events after the reporting period
At the date of these Final Results there have been no events that require disclosure in accordance with IAS10,
'Events after the balance sheet date'.
41
Perivan 263151