Oncimmune Holdings Plc
Clinical Sciences Building
Nottingham City Hospital
Hucknall Road
Nottingham
NG5 1PB
Email: contact@oncimmune.co.uk
Phone: +44 (0)115 8231869
Fax: +44 (0)115 8231958
Oncimmune (USA) LLC
8960 Commerce Drive, Building #6
De Soto
KS 66018
USA
Email: clientservices@oncimmune.com
Phone: +1 913 583 9000
Fax: +1 913 583 9001
Contents
Strategic Report
02 Highlights
04 Business Overview
10 Board of Directors
12 Chairman and Chief Executive’s Review
15 Chief Financial Officer’s Review
16 Principal Risks And Uncertainties
Directors’ Report
18 Directors’ Report
21 Statement of Directors’ Responsibilities
12
Chairman and
Chief Executive’s Review
18
Directors’ Report
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Financial Statements
23 Independent Auditor’s Report
24 Consolidated Financial Statements
28 Notes to the Consolidated Financial Statements
51 Independent Auditor’s Report on Parent
Company Financial Statements
52 Parent Company Financial Statements
54 Notes to the Parent Company Financial
Statements
60 Company Information
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Financial Statements
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STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
Financial Highlights
£5.0m
raised by means of a
conditional placing with
new and existing investors
Revenues for the year
£0.22m
(2016: £0.43m)
Cash balance at the
year end was
£5.08m
(2016: £10.2m)
excluding monies raised in
September 2017
Operating costs before
share based charges and
exceptional items were
£4.88m
(2016: £3.8m)
Net loss for the
year was
£5.0m
(2016: £4.6m)
before any
exceptional items
Corporate and operational highlights
(including post-period end)
EarlyCDT®-Lung commercial progress
R&D and Trials
• CE Mark for the EarlyCDT®-Lung kit received
in May 2017, with first commercial batches
expected to be shipped by no later than the
end of October 2017
• First distribution agreements signed by
Oncimmune’s Asian (including Israel) business
which provide minimum payment guarantees
of over £6.1m over the next five years
• First distribution agreements for the
EarlyCDT®-Lung kit in Europe for Denmark,
Norway, Sweden and Poland with an
aggregate minimum sales commitment of
approximately £1.4m over the next four years
• In September 2017, the Company entered
into a four-month preliminary distribution
partnership with a major US pulmonary
sales force for the use of EarlyCDT®-Lung in
assessing indeterminate lung nodules which,
if successful, should lead to a distribution
agreement for US pulmonologists
• Foundations for the commercial panel for
the EarlyCDT®-Liver test have been laid with
validation due for completion by the end of
2017 and commercial sales on track to begin
in H1 2018. EarlyCDT®-Ovarian is expected
thereafter
• NHS Lung Cancer Screening Trial is fully
recruited: 12,210 patients with final study
results in 2019; latest interim data presented
at the European 27th International Congress
of the European Respiratory Society (ERS) in
Milan in September 2017
Personalised Medicine & Companion
Diagnostics
• Presentation of data on the use of
Oncimmune’s autoantibody technology to
successfully predict disease recurrence in
subjects undergoing immunotherapy with
Scancell Holding plc’s SCIB1 immunotherapy
for malignant melanoma
• Autoantibody “fingerprint” technology
development progressing well with data
expected to be presented in Q4 2017
3
Business Overview
Mission: To improve significantly the outcomes of cancer patients
through early detection of the disease and by enhancing treatment
pathways
Early detection of cancer saves lives and money
Oncimmune’s EarlyCDT® platform technology can detect cancer up to four years earlier than
other methods
Core Scientific Principle
Early cancer detection based on autoantibodies
• Produced early in tumour formation – years ahead of clinical symptoms
• Absent or low concentrations in healthy & benign groups
• One abnormal (cancer) antigen will lead to many 1,000s of autoantibodies = early measurable signal
Extensively validated, highly regarded science
• 92% accuracy with high specificity at 93%
• Substantial history of academic collaboration and peer-reviewed publication
Normal
cell
Tumour
cell
Normal host protein
Abnormal ‘tumour
associated’ antigen
Autoantibodies
specific for TAA
4
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017
A Pioneer in Early Cancer Detection
Platform technology with multiple revenue streams in multiple geographies
• First product on the market in the US and in Europe – EarlyCDT®-Lung
• Kit version of EarlyCDT®-Lung CE Marked and with distribution partners – key to global growth
strategy
• Tests for additional cancers in development
• Second generation products provide significant upside potential through platform innovation
• Complementary to other technologies - for example imaging (CT scan), therapeutics
• Strong IP in 50 territories (incl. US and China)
• NHS using EarlyCDT®-Lung in largest randomised trial for the early detection of lung cancer
using biomarkers ever conducted
Scientific, Operational & Commercial Objectives and KPIs
Scientific
• Maintain scientific leadership in early cancer detection
• Demonstrate ongoing clinical validation of the EarlyCDT® platform
• Validate commercial tests for other solid tumour cancers
• Establish further companion diagnostic studies
• Validate and develop fingerprint technology
• Continue to maximise value of our extensive IP
Operational
• Delivery of EarlyCDT®-Lung test “kit” to existing and new distribution partners
• Develop platform to allow move into new indications and personalised medicine
• Extend footprint and skills in Asia Pacific
Commercial
• Demonstrate sales traction of EarlyCDT®-Lung test in the US with existing distribution partners
•
Initial sales of EarlyCDT®-Lung test into European and Asian markets through distribution
partners
• Complete major commercial deals for EarlyCDT®-Lung test in the US and China
• Work with partners to build commercial case for companion diagnostics
5
Early Cancer Diagnostics
Early cancer detection – saves lives and money
Lung cancer generally detected late – 5-year survival 18%1
• Almost 80% of lung cancer diagnosed after spread
• 52% of patients die in the 1st year after diagnosis
• If still localised, the 5-year survival rate for lung cancer more than triples to 56%
EarlyCDT®-Lung – addresses the #1 need for cancer detection
• Lung cancer remains the #1 killer in the USA of both men and women1
• Lung cancer kills more people than the 5 other most common forms of cancer combined1
• The only well-validated blood test available – EarlyCDT®-Lung
Lung Cancer 5-Year Survival Rates1
SEER Cancer Statistics Review 1975 - 2014
All stages
Distant Tumors
Localised
1 Source: Howlader N, et al. SEER Cancer Statistics Review, 1975-2014, National Cancer Institute. Bethesda, MD, https://seer.cancer.gov/csr/1975_2014/, based on
November 2016 SEER data submission, posted to the SEER web site, April 2017.
6
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017 Platform To Drive Multiple Revenue Streams
• On market
• Opportunity to expand use
alongside CT
• Major opportunity in screening
• Developing pulmonologist
focused test for assessing
indeterminate lung nodules
Kit
Other
indications
Companion
diagnostics
Fingerprinting
•
•
•
•
•
•
Launch H2 2017
Expand global commercial
opportunity
Major opportunity in screening
Expand global commercial
opportunity
Partnering agreements with
large pharma
Truly personalised medicine
7
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS Lead Product - EarlyCDT®-Lung
First product from Oncimmune platform - EarlyCDT®-Lung
• 120,000 patient samples run before commercial launch
• Well established Central Laboratory Test in US (CLIA)
• Gaining US traction with distribution and product development
• Complementary to other technologies (eg: CT scan)
Potential step change through development of EarlyCDT®-Lung “kit”
• Transform margins
• CE mark certified - kit meets the strict EU standards of manufacturing and quality control
• Hospital lab friendly (platform neutral, well established and standard 96-well plate ELISA)
• Open new markets, in particular Asia
Second use of EarlyCDT®-Lung test - Indeterminate Nodules
Growing number of pulmonary nodules detected
Adoption of CT screening will lead to a growing number of detected pulmonary nodules and diagnostic
challenges
> 1.5 million
patients with incidental pulmonary
nodule expected each year in US
Diagnostic and intervention steps rely heavily on clinician judgement
Nodule Size
Age
Smoking hx
Appearance
Intervention
candidate
Incidental
finding
The EarlyCDT®-Lung blood test provides clear results to aid pulmonologists in the risk
assessment of indeterminate nodules beyond current recommended risk calculators allowing
earlier intervention and better outcomes.
8
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017
EarlyCDT®-Lung for other cancers
In Development - Product pipeline broadening cancer coverage
HCC (Liver) – expected launch H1 2018
• Clear clinical need for this test
• Highly cost effective screening tool, complements AFP
Ovarian – expected launch H2 2018
• Clear clinical need for this test
• Highly cost effective screening tool, complements CA125
Other solid tumours
Future opportunities
Next generation tests provide long term opportunities
EarlyCDT® for companion diagnostics – patient targeting & monitoring responses to therapy
EarlyCDT® for “fingerprinting” - next generation tests provide long term opportunities
Board of Directors
MEINHARD SCHMIDT
Non-Executive Chairman
Meinhard is a MedTech industry executive and entrepreneur with more than 20 years broad international experience in the
healthcare, diagnostics and medical devices industries. He is currently active as the founder at Austin Life Science Partners
AG, an established Swiss-based company providing business and financial services to the Diagnostics and Life Sciences
industry. Prior to this, for more than ten years Meinhard was at Roche Diagnostics where he held various global senior
leadership roles in Diabetes Care, Decentralized Solutions and was global Senior VP at Lab Diagnostics, which achieved
the leading global position in the laboratory industry. He has also held executive positions with Philips (NL) and Institute
Straumann (CH). Meinhard has strong board-level experience, he has worked across M&A, global operations, sales and
marketing, innovation management, and he has held executive management positions in Germany, The Netherlands, USA,
Canada, Sweden, UK and Switzerland. He currently serves as Board Director at several healthcare/diagnostics companies in
UK, USA and Switzerland.
GEOFFREY HAMILTON-FAIRLEY
Chief Executive Officer
Geoffrey has an entrepreneurial career that started in 1982 when he founded a number of companies in the media sector
backed by The Abingdon Management Company Limited (Abingdon) which he became sole owner of having acquired
the Company from its institutional shareholders. Abingdon had a number of quoted and unquoted investments including
Fortronic, which developed the first magnetic strip plastic card swipe technology. In 1998 he launched Premium TV (PTV)
securing a contractual joint venture with Eurosport to create “British Eurosport”. PTV was acquired by NTL (now Virgin
Media). Over the past ten years Geoffrey has increasingly focused his time and energies on the health sector and has
dedicated almost all of his time in the past 8 years to the development of Oncimmune Limited, serving as its Executive
Chairman and now CEO. Geoffrey is also a senior research fellow at the International Prevention Research Institute. His
personal commitment to cancer detection can be traced to his father, the first professor of medical oncology in the United
Kingdom.
ANDREW MILLET
Chief Financial Officer
Andrew is a Chartered Accountant and registered auditor. Andrew qualified as a chartered accountant with Stoy Hayward
(now BDO), following which he gained an MBA from Henley Management College. Andrew has spent many years at
executive level involved with the growth and success of early stage technology businesses. Andrew is a director of Wisteria
Chartered Accountants, a firm he founded in 2002 and he has, since 2003, been involved in a variety of capacities with
Oncimmune including as accountant, company secretary, shareholder and now CFO.
TIM BUNTING
Deputy Chairman & Non-Executive Director
Tim is general partner at Balderton Capital (UK) LLP which he joined in 2007. Balderton Capital (UK) LLP is the investment
advisor to Balderton Capital Partners III, L.P. He was previously a partner of Goldman Sachs where he spent 18 years. At
Goldman, Tim held various roles including Global Head of Equity Capital Markets (2002 to 2005) and Vice-Chairman of
Goldman Sachs International (2005 to 2006). Tim is also a Governor of Wellington College and the Wellington Academy;
a Trustee of the Rainbow Trust Children’s Charity and the Paul Hamlyn Foundation. Tim is a graduate of the University of
Cambridge.
10
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017 JULIAN HIRST
Non-Executive Director
Julian is a seasoned finance executive with experience across a broad range of corporate finance transactions including
equity private placements, initial public offerings, public debt and equity issues, mergers and acquisitions, trade sales,
strategic partnerships and restructurings. Julian is currently Corporate Finance Director of Immunocore Limited, a leading
UK biotechnology company specialising in immune-oncology. On a part-time basis, he also runs a single family office which
represents a high profile hedge fund manager and is the Joint Head of Technikos, a partnership which manages stakes in
spin-out companies from Oxford University’s Institute on Bio-Medical Engineering. Prior to this, Julian held senior positions
at several of the leading global investment banks including Panmure Gordon, UBS Warburg, Morgan Stanley and Lehman
Brothers.
CARSTEN SCHROEDER
Non-Executive Director
Carsten has over 20 years of senior leadership experience in the medical diagnostics sector. Since 2014 he has been
President of the Diagnostic Division at Grifols, S.A. where he is responsible for global commercial operations and overall
strategy, including leading its growth and innovation in Transfusion Medicine and Specialty Diagnostics. Prior to that, and
before its acquisition by Grifols, Carsten was President of Novartis Diagnostics. Carsten joined Novartis Diagnostics in 2010
as Vice President of Commercial Operations for the EMEA region where he oversaw expansion into new markets. During
his time at Novartis he was a member of the Vaccines & Diagnostic Division Executive Committee and served as Site Head
for its Emeryville campus in California. Carsten has also held executive positions with Boston Scientific, Mallinckrodt (now
Covidien) and Boehringer Ingelheim. Mr. Schroeder holds an MBA from the European School of Management in Paris (ESCP)
and a Bachelor of Arts in Economics from the University of Cologne in Germany.
RICHARD SHARP
Non-Executive Director
Richard graduated from Oxford University and began his professional career in 1978 working for JPMorgan in UK Banking,
then in Investment Banking and Derivatives. In 1985, Richard joined Goldman Sachs in London and variously served as Head
of Capital Markets, Head of UK investment Banking and Head of European Private Equity and Mezzanine Investing. Richard
left Goldman in 2007 to found and run DII Capital LLP. Richard has been separately a trustee of the Royal Marsden Capital
Fund and a trustee of the Institute of Cancer Research. In the summer of 2013, Richard became an External Appointee of HM
Treasury on the Financial Policy Committee of the Bank of England which is responsible for Macro-Prudential Supervision in
the UK.
ANDREW UNITT
Non-Executive Director
Andrew was Chief Financial Officer at the University of Nottingham, a major shareholder in Oncimmune, until July 2016. Prior
to working in higher education at the university, Andrew was a finance director for 20 years in a wide range of industries.
His more recent background includes 11 years at Boots plc, where he was Finance Director for 4 years of Boots Healthcare
International, its over the counter medicines business. He has also held a number of non executive directorships in the NHS
and private sector.
11
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS Chairman and Chief Executive’s Review
Oncimmune’s goal is to be a leader in early cancer detection and its
mission is to significantly improve the outcomes of cancer patients
through early detection of the disease and enhanced treatment pathways.
Detecting early stage disease has two key benefits: better survival for the
patients and significantly lower cost of treatment as most of these early
stage patients do not need expensive therapies and treatments.
12
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017 In May 2016, the Company completed an IPO listing on AIM. At
that time, the Company laid out its strategy to deliver both its
mission and value to shareholders. On behalf of the Board, we
are pleased to present the Annual Report & Accounts for year
ended 31 May 2017 and to provide an update on progress since
the Company’s IPO, as we seek to deliver our three-year plan.
Business Update
The Company can confirm that it has been a successful
start to the commercialisation plans outlined at the IPO. Our
mission is to develop and commercialise accurate early cancer
detection tests for multiple cancer types including our lead
product, EarlyCDT®-Lung, which is already on the market. Our
three-year commercialisation plan has to date focused on the
recruitment of new senior staff to lead our activities in Asia; the
UK and Europe; and in the US for Reimbursement and Sales,
which we have now successfully completed. Our R&D plan
has made good progress and with the EarlyCDT®-Lung kit test
now CE marked and in production, a key element in delivering
our global commercialisation plan has become a reality. The
Company can now start to execute on its portfolio revenue
proposition with multiple products, generating revenues
in different regions and with different partners. In addition,
we have an emerging companion diagnostics business
and a second generation of the platform, the autoantibody
“fingerprint”, that we believe could bring new levels of
performance and could lead to a pan-cancer test.
EarlyCDT®-Lung
In the US, we are proceeding with our previously outlined
process of supporting our distributors to test the efficiency
of our marketing approach and ensure that our partners
deliver high quality and long-term sales. We appointed a new
sales director at the end of last year and we have worked
diligently testing a number of approaches to ensure an optimal
sales and marketing cycle where a physician re-orders the
EarlyCDT®-Lung test without the need (and expense) of a
repeat sales visit. The investment programme related to
this – initially scheduled to be started by the end of the first
quarter of 2017 – was deferred until we were confident that
our approach was gaining traction. In light of this, and the
Company’s general prudent approach to expenditure and
cash management, the Company’s year end cash balance
was better than expected at £5 million. The Company will
invest further in sales support and marketing to support its
distributors whilst ensuring that its partners deliver high quality
and long-term sales as the Company gains confidence in this
approach. The Company remains cautious, however, in terms
of near term revenue growth from this channel as positioning
of the test is key to long-term success.
Oncimmune currently has 14 distributors for EarlyCDT®-Lung
in the US. It also has ongoing discussions with a number of
pulmonology distributors including one where a preliminary
distribution agreement has been signed with a focus on
the second use of the EarlyCDT®-Lung test, namely risk
stratification of CT identified nodules.
This preliminary agreement followed a detailed research
study which verified the clinical attractiveness of using the
EarlyCDT®-Lung test in aiding in the risk assessment of
indeterminate pulmonary nodules. The initial partnership
is expected to run until the end of February 2018 and if
successful should lead to a distribution agreement covering
a significant proportion of the pulmonologists in the US. The
Company is also exploring further pulmonology distribution
channels in the US with other parties.
Indeterminate nodules - growths in the lung which may or may
not be malignant - are a major concern for pulmonologists.
There are currently more than 1.5m patients with pulmonary
nodules per annum in the US and the number is expected
to grow rapidly with the expected increased adoption of CT
screening for high risk patients in the US. 96% of positive CT
scans (nodules identified) are not cancer, so finding the correct
ones to follow up is a large unmet need which our test can
address effectively. Data published in the Journal of Thoracic
Oncology from Vanderbilt University showed that a positive
EarlyCDT®-Lung test indicates that a nodule is two to three
times more likely to be cancer. Sales of EarlyCDT®-Lung to
pulmonologists have been forecast to be greater than $400m
by 20211.
Outside of the US, Oncimmune is progressing well. The
Company’s Asian (including Israel) business has five
distribution agreements in place for EarlyCDT®-Lung kits in
Israel, South Korea, Taiwan, Hong Kong and Singapore, which
provide over £6.1m in minimum payment guarantees over the
next five years.
The Company has also announced its first distribution
agreements for its EarlyCDT®-Lung kit in Europe with exclusive
agreements for Denmark, Norway, Sweden and Poland with an
aggregate minimum sales commitment of approximately £1.4m.
We expect to sign more distribution contracts in Asia
and Europe during 2017 / 2018, with a number of these
arrangements also likely to include guaranteed minimum
payments that add to our confidence in our chosen distributors
and enhance revenue visibility/predictability.
Oncimmune’s particular focus for the Asian market has
been set on China, where lung cancer remains the number
one killer of both men and women, with over 700,000 new
cases of lung cancer diagnosed annually. The Company has
entered into discussions with several diagnostic companies
for collaboration opportunities including licensing and
registration, marketing commercialisation, distribution and local
manufacturing.
R&D and Trials
The development and completion of a kit version of the
EarlyCDT®-Lung test was a key part of the Company’s
commercial growth strategy and R&D plan laid out at the
time of its IPO. The CE Mark for EarlyCDT®-Lung test in an
ELISA kit format was received in May 2017. The kit has the
advantage of running on already well established ELISA-96
1 Health Advances, Boston 2014
13
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
well-microplate-instruments that hospitals worldwide have as
standard equipment in their laboratories. This milestone made
possible the Asian and European distribution agreements
described above with the potential for further expansion into
other markets.
The Company believes this autoantibody “fingerprint” could
bring new levels of performance and could lead to a pan-
cancer test which could complement the global vision of some
major companies currently investing heavily in developing
personalised medicine platforms and services.
Beyond the kit, the R&D programme continues to progress.
The Company has laid the foundations for the commercial
panel for the EarlyCDT®-Liver test with validation due for
completion by the end of 2017 and commercial sales on track
to begin in H1 2018. EarlyCDT®-Ovarian is expected thereafter.
Data relating to the EarlyCDT®-Liver panel was published at
the International Liver Cancer Association showing that a panel
of 10 autoantibodies could detect hepatocellular carcinoma
with high sensitivity and specificity.
Interim data from the NHS Lung Cancer Screening Trial was
also recently presented at the European 27th International
Congress of the European Respiratory Society (ERS) in Milan.
The results remain encouraging, most notably that over 75%
of the patients being diagnosed have early stage cancers
(stage 1 & 2) as opposed to the vast majority in normal
practice presenting with late stage cancer - which is generally
incurable. Now fully recruited, with 12,210 patients, this is
the largest randomised control trial using biomarkers ever
conducted in lung cancer. The final study results, including the
control arm, will be published after all patients have completed
two years of follow up CT scans and these are expected in
2019.
Fundraising
In September, the Company announced it had raised £5.0m,
before expenses, by means of a conditional placing with new
and existing investors. Of this, £1.0m remains outstanding
and conditional on receipt from HM Revenues & Customs of
confirmation that this investment will be a qualifying holding for
the purposes of Part 6 of the Income Tax Act 2007. This further
financing had been anticipated at IPO in order to fully underpin
our three-year commercialisation strategy.
The Placing will allow the Company to strengthen its balance
sheet to complete major distribution deals in the following
areas:
• USA for EarlyCDT®-Lung;
• China for EarlyCDT®-Lung; and
• “Fingerprint” -a personalised autoantibody profiling
approach
Following completion of the major distribution deals the cash
is to be used for:
Personalised Medicine & Companion Diagnostics
In companion diagnostics, the Company recently announced
the presentation of data on the use of Oncimmune’s
autoantibody technology to successfully predict disease
recurrence in subjects undergoing immunotherapy with
Scancell Holding plc’s SCIB1 immunotherapy for malignant
melanoma.
• R&D:
• Additional NHS studies to accelerate adoption
• Additional markers for lung test in the US to enhance
its “pulmonology test”
• Validation and launch of liver test
• Further validation of fingerprinting
• Marketing to general practices in the US
The collaborative study, which also included a team at the
University of Nottingham, developed a method using a panel
of seven tumour associated autoantibodies to predict disease
recurrence in patients with resected Stage III/IV melanoma
treated with SCIB1. Whilst Phase I/II trials with SCIB1 have been
highly encouraging, this additional information potentially
enables the identification of patients prior to commencement
of therapy who are most likely to respond to treatment in
future clinical trials with SCIB1.
Oncimmune is running a number of further studies alongside
drug development programs and expects to be able to
announce results from these in the next 12 months. The
Company expects that this will support the development of this
area as a separate business unit.
Finally, in the second half of 2017 Oncimmune expects to
announce results relating to the second generation of tests
from its autoantibody platform where patients can be their
own control and thus testing is significantly more accurate.
In addition, the Board intends to progress development of its
other products (ovarian tests) through to commercial launch,
which it considers to be another key step for the Company.
Outlook
Oncimmune continues to deliver on its plan to create
value from its core autoantibody platform and the board is
increasingly confident that the Company is well placed to
execute that plan and deliver value in the medium and long
term.
Geoffrey Hamilton-Fairley
Chief Executive Officer
Meinhard Schmidt
Chairman
18 October 2017
14
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017
Chief Financial Officer’s Review
Revenue in the year ended 31 May 2017 was £215k (2016:
£430k). In the current year, this revenue represented the
sale of commercial tests that were performed from our own
CLIA laboratory in Kansas, USA. Focus has now been on
developing the kit version of the test and finding potential
new distributors. The kit is now developed and goes on sale
in the autumn of 2017; exclusive distribution deals have been
entered into for a number of countries, and therefore we are
now anticipating an increase of revenue from autumn 2017.
In addition to this the Company is working on closing a
number of strategic deals in the US and China. The timing
of these and the exact nature is not definite, however when
and if they do happen they are expected to have a material
impact on revenue.
Financial Outlook
The Company’s cash position is now strong. The cash burn
continues to be managed carefully. In the meantime, we are
excited about the numerous commercial opportunities open
in the forthcoming year, notably:
• the sale of EarlyCDT®-Lung kit; and
• closing distribution deals in the US and China; and
• closing a commercial deal relating to our “fingerprint”
technology
At the same time, we will continue to invest in R&D.
As such, the management are confident that its cash
resources are sufficient for the foreseeable future.
Andrew Millet
Chief Financial Officer
18 October 2017
Operating expenses before share based charges and
exceptional items in the year ended 31 May 2017 were
£4.88m (2016: £3.83m). The increase of costs reflects
the additional running cost of operating the research
and development laboratory in Nottingham, UK and the
commercial laboratory in Kansas, USA.
Net loss for the year was £5.0m (2016: £4.6m) before any
exceptional items.
There were no exceptional items in the current year.
After exceptional items the Company incurred a net loss of
£5.0m (2016: £8.4m).
£415k (2016: £108k) of research and development costs have
been capitalised in the year. The decision to capitalise these
costs was made on the basis that these were the direct costs
relating to the work that went in to the development of the
EarlyCDT®-Lung kit, which is now in production and will be
ready for sale in the autumn of 2017.
The Company raised a further £5m (£4.78m net of expenses)
via a placement in September 2017 issuing up to 4.167 million
shares. Of this, the issuance of 833,333 Ordinary Shares
representing £1.0m remain conditional on receipt from HM
Revenues & Customs of confirmation that this investment
will be a qualifying holding for the purposes of Part 6 of the
Income Tax Act 2007.
The cash balance at the end of the year was £5.075m (2016:
£10.2m).
15
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
Principal Risks and Uncertainties
Reliance on the retention of key employees
The future success of the business is dependent on its
senior management and key personnel and there is always a
challenge to maintain back-up support in respect of key roles
or replace key staff should they leave our organisation. The
Group seeks to provide a positive work environment with
opportunities for career growth coupled with appropriate
remuneration and share option incentives.
New markets
The Group has entered into a number of distribution
agreements in new geographical markets and expects
to continue to do so, for the foreseeable future. These
distribution agreements typically give the distributor the
exclusive rights of distribution of the EarlyCDT®-Lung CLIA
test and the kit within certain geographical boundaries
for a period of time, in consideration for minimum order
requirements. Failure from any one distributor will not be
material, however, failure from many distributors could be
material, though. The group will do what it can to support the
distributors, as best it can, to optimise success.
Risks from competitors
The Group operates in a competitive market and faces
competitors who may develop more advanced or alternative
tests for early detection of cancer. The group mitigates
this through investing significantly heavily in research and
development.
Legislation and Regulatory Change
Any change in legislation, and in particular the regulations
relating to the testing of human blood or serum as part of
a diagnostic test of disease, may have an adverse effect
on the Group’s operations and the returns available on an
investment in the Group. The Group mitigates this as far
as possible by ensuring a continuous awareness of the
legislative environment.
Foreign exchange
The Group conducts its operations principally in US Dollars
and Sterling and is consequently subject to currency risk
due to fluctuations in exchange rates. As well as direct risk
arising from transaction or translation risks, foreign exchange
movements may make products or materials more expensive
which may adversely affect the Group’s revenues and
expenditure and as a result could have a material adverse
effect on the Group’s business, results of operations and
financial condition. The Group continue to monitor potential
foreign exchange exposure.
Key Performance Indicators
The Group measures its performance according to a
wide range of key performance indicators. The main key
performance indicators for the Group are as follows and the
Group’s performance against these indicators have been
discussed in the Chairman and Chief Executive’s report and
the Chief Financial Officer’s report:
• Development milestones
• Revenue and profit indicators
• Management of cash resources
Andrew Millet
Chief Financial Officer
18 October 2017
16
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017
17
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS Directors
The Directors of the Company who served during the year
and up to the date of this report were:
Meinhard Folkert Schmidt
Non-Executive Chairman
(appointed 9 October 2015)
Geoffrey Neil Hamilton-Fairley
Chief Executive Officer
(appointed 9 October 2015)
Andrew Millet
Chief Financial Officer
(appointed 26 August 2016)
Timothy Brian Bunting
Non-Executive Director (Deputy Chairman)
(appointed 9 October 2015)
Richard Simon Sharp
Non-Executive Director
(appointed 9 October 2015)
Andrew Vaughan Unitt
Non-Executive Director
(appointed 9 October 2015)
Julian Clement Hirst
Non-Executive Director
(appointed 23 June 2016)
Carsten Schroeder
Non-Executive Director
(appointed 11 October 2016)
Directors’ Reports
The Directors present their report and audited consolidated
financial statements for the year ended 31 May 2017.
Results and dividends
The consolidated statement of comprehensive income is set
out on page 12 and shows the loss for the year. The loss for
the year ended 31 May 2017 was £5.4m (2016: loss of £8.4m).
No dividend will be paid in respect of the year.
Corporate governance
The Directors comply with the requirements of the UK
Corporate Governance Code of the Quoted Companies
Alliance (QCA) to the extent that they consider it appropriate
and having regard to the Company’s size, board structure,
stage of development and resources. The Board considers
that all non-executive Directors exercise independent
judgement. The Board currently consists of seven directors,
two of which are independent non-executive Directors under
the QCA guidelines
The Audit Committee is comprised of Julian Hirst, Tim
Bunting and chaired by Andrew Unitt. The Audit Committee
determine and examine matters relating to the financial
affairs of the Company including the terms of engagement of
the Company’s auditors and, in consultation with the auditors,
the scope of the audit. It receives and reviews reports from
management and the Company’s auditors relating to the
half yearly (if subject to audit) and annual accounts and the
accounting and internal control systems in use throughout
the Company. The Audit Committee meet at least twice a
year.
The Remuneration Committee is comprised of Andrew Unitt,
Meinhard Schmidt, Carsten Schroeder and chaired by Tim
Bunting. The Remuneration Committee review and make
recommendations in respect of the Directors’ remuneration
and benefits packages, including share options and the
terms of their appointment. The remuneration committee
also make recommendations to the Board concerning the
allocation of share options to employees. The Remuneration
Committee meet at least once a year and otherwise as and
when necessary.
The AIM Compliance Committee comprise of Meinhard
Schmidt, Andrew Unitt and chaired by Richard Sharp.
The AIM Compliance Committee ensures, inter alia, that
procedures, resources and controls are in place to ensure
AIM Rules for Companies compliance within the Company
are operating effectively from time to time. The AIM
Compliance Committee meet at least twice a year and at
such other times as the members of the committee shall
agree.
18
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017
Directors’ interests
At 31 May 2017, the Directors and family had the following interests in the Company’s ordinary shares and options to subscribe
for shares:
31 May 2017
31 May 2016
Meinhard Folkert Schmidt
Geoffrey Neil Hamilton-Fairley
Andrew Millet
Timothy Brian Bunting
Richard Simon Sharp
Andrew Vaughan Unitt
Julian Clement Hirst
Carsten Schroeder
Shares
-
3,238,070
109,954
2,806,717
4,515,302
-
-
-
Options
120,370
798,148
92,593
-
-
-
-
-
Shares
Options
-
3,238,070
109,954
2,806,717
3,746,072
-
-
-
-
150,000
-
-
-
-
-
-
The company also issued warrants on 26 November 2015 to Geoffrey Hamilton-Fairley to subscribe for 762,500 Ordinary
Shares at a subscription price of 1p per Ordinary Shares and to Meinhard Schmidt to subscribe for 226,250 Ordinary Shares at
1p. These warrants had not been exercised at the year end.
Directors’ remuneration
The remuneration paid to or receivable by each person from who served as a Director during the year to 31 May 2017 was as
follows:
Salary/
fees
Other
Bonus
Pension
Benefits
£’000
£’000
£’000
£’000
£’000
Meinhard Folkert Schmidt
Geoffrey Neil Hamilton-Fairley
Robert Page
Andrew Millet
Timothy Brian Bunting
Richard Simon Sharp
Andrew Vaughan Unitt
Julian Clement Hirst
Carsten Schroeder
Total
63
200
-
97
-
-
15
34
-
409
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31 May
2017
Total
£’000
63
200
-
97
-
-
15
34
-
31 May
2016
Total
£’000
29
598
43
-
-
-
-
-
-
409
670
Geoffrey Neil Hamilton-Fairley’s remuneration in the prior year reflected £398,200 in respect of a company waiver of an
outstanding amount on 11,000 partly paid shares and Mr Hamilton-Fairley undertook to settle any tax payable as set out in the
Admission Document.
19
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
Significant shareholdings
As at the 31 May 2017, the Company has been notified (or is otherwise aware) of the following interests in 3% or more of the
issued Ordinary Share capital of the Company:
No. of Ordinary Shares
Percentage of share capital
Balderton Capital III, LP
University of Nottingham
Richard Sharp
Geoffrey Neil Hamilton-Fairley
Professor John Robertson
Timothy Brian Bunting
Andrew Black
Aviva Investors Global Services Limited
David Royds
Andrew Scott
6,813,196
6,561,814
4,515,302
3,238,070
3,063,636
2,806,717
2,379,310
2,103,223
1,895,637
1,750,001
13.35
12.86
8.85
6.35
6.00
5.50
4.66
4.12
3.72
3.43
Going concern
Having regard to the available cash resources, tight financial control, budgets and forecasts for 2018 and beyond, the
Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for
the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the Group financial
statements.
Risk management
Details of the Group’s financial risk management objectives and policies, and exposure to price risk, credit risk and liquidity
risk are set out in Note 25.
20
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017 Statement of Directors’ Responsibilities
Provision of information to the auditor
The Directors confirm that:
• so far as each Director is aware, there is no relevant
audit information of which the Company’s auditor is
unaware; and
• the Directors have taken all the steps that they ought
to have taken as Directors in order to make themselves
aware of any relevant audit information and to establish
that the auditor is aware of that information.
Auditor
The auditor, Grant Thornton UK LLP, has expressed
willingness to continue in office. In accordance with section
489(4) of the Companies Act 2006, a resolution to reappoint
Grant Thornton UK LLP will be proposed at the Annual
General Meeting.
On behalf of the Board
Andrew Millet
Director
18 October 2017
Company registration number:
09818395 (England and Wales)
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors have elected to prepare the Group consolidated
financial statements in accordance with International
Financial Reporting Standards as adopted by the European
Union (IFRSs) and elected to prepare the parent company
financial statements under United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting
Standards and applicable laws 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 and of the profit or loss of the Group and the parent
company 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 accounting estimates that are
reasonable and prudent;
• state whether applicable IFRSs or UK Accounting
Standards have been followed, subject to any material
departures disclosed and explained; and
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Group and the parent company will continue in
business.
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 the Group and enable them to ensure that
the financial statements comply with the Companies Act
2006. They are also generally responsible for taking steps
as are reasonably open to them to (i) safeguard the assets
of the Group and (ii) prevent and detect fraud and other
irregularities.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Information published on the
website is accessible in many countries and legislation
in the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
21
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
22
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017 Independent Auditor’s Report
INDEPENDENT AUDITOR’S REPORT TO THE
MEMBERS OF ONCIMMUNE HOLDINGS PLC
We have audited the consolidated financial statements
of Oncimmune Holdings Plc for the year ended 31 May
2017 which comprise the Consolidated Statement of
Comprehensive Income, the Consolidated Statement of
Financial Position, the Consolidated Statement of Changes
in Equity, the Consolidated Statement of Cashflows and
the related notes. The financial reporting framework that
has been applied in their preparation is applicable law
and International Financial Reporting Standards (IFRSs) as
adopted by the European Union.
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.
Respective responsibilities of directors and auditor
As explained more fully in the Statement of Directors’
Responsibilities, the Directors are responsible for the
preparation of the consolidated financial statements and
for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the
consolidated financial statements in accordance with
applicable law and International Standards on Auditing (UK
and Ireland). Those standards require us to comply with
the Auditing Practices Board’s (APB’s) Ethical Standards for
Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements
is provided on the Financial Reporting Council’s website at
www.frc.org.uk/auditscopeukprivate.
Opinion on other matter 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
Directors’ Report for the financial year for which the
consolidated financial statements are prepared is
consistent with the consolidated financial statements.
• The Strategic Report and Directors’ Report has
been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report under
the Companies Act 2006
In the light of the knowledge and understanding of the Group
and its environment obtained in the course of the audit, we
have not identified any material misstatements in the Strategic
Report or Directors’ Report.
Matters on which we are required to report by
exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to
you if, in our opinion:
• 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.
Other matter
We have reported separately on the parent company
financial statements of Oncimmune Holdings plc for the year
ended 31 May 2017.
Opinion on financial statements
In our opinion the consolidated financial statements:
Giles Mullins
• give a true and fair view of the state of the Group’s
affairs as at 31 May 2017 and of its loss for the year then
ended;
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Milton Keynes
• have been properly prepared in accordance with IFRS
as adopted by the European Union; and
19 October 2017
• have been prepared in accordance with the
requirements of the Companies Act 2006.
23
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income
Notes
Year to
31 May 2017
£’000
Year to
31 May 2016
£’000
Revenue
Cost of sales
Gross profit
Administrative expenses
Research and development expenses
Share based payment charges
Operating loss
Gain arising on debt settlement
Finance costs on derivative liabilities
Finance income
Finance expense
Loss before income tax
Income tax
Loss for the financial year
5
5
5
9
9
10
Other comprehensive income
Items that may be subsequently reclassified to
profit or loss, net of tax
Currency translation differences
Loss after tax and total comprehensive income
for the year attributable to equity holders
Basic and diluted loss per share
24
Total
215
(532)
(317)
(3,857)
(1,025)
(74)
(4,956)
(5,273)
-
-
26
(69)
(5,316)
293
(5,023)
222
(4,801)
(9.84p)
Total
430
(147)
283
(4,269)
(789)
(939)
(5,997)
(5,714)
1,564
(4,126)
5
(737)
(9,008)
566
(8,442)
24
(8,418)
(23.54p)
The accompanying notes form an integral part of these consolidated financial statements.
24
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017
Consolidated Statement of Financial Position
31 May 2017
31 May 2016
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Current assets
Inventories
Trade and other receivables
Current tax assets
Cash and cash equivalents
Total assets
EQUITY AND LIABILITIES
Equity
Capital and reserves attributable to the equity holders
Share capital
Share premium
Merger reserve
Other reserves
Own shares
Foreign currency translation reserve
Retained earnings
Total equity
Non-current liabilities
Other Loans
Current liabilities
Trade and other payables
Current tax liabilities
Other loans
Total liabilities
Total equity and liabilities
Notes
12
11
14
13
15
19
17
16
17
£’000
518
230
748
323
261
-
5,075
5,659
6,407
510
16,273
30,787
2,187
(1,926)
169
(42,996)
5,004
-
-
847
54
502
1,403
1,403
6,407
The accompanying notes form an integral part of the consolidated financial statements.
The financial statements were approved by the board om 18 October 2017.
Andrew Millet
Director
£’000
131
253
384
188
339
100
10,197
10,824
11,208
510
16,273
30,787
2,113
(1,926)
(53)
(37,973)
9,731
395
395
529
57
496
1,082
1,477
11,208
25
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
Consolidated Statement of Changes in Equity
Share
capital
Share
premium
Other
reserves
Merger
reserve
Foreign
currency
translation
reserve
Own
Shares
Retained
earnings
Total
£’000
7
£’000
30,729
£’000
1,103
£’000
-
£’000
(77)
£’000
(1,926)
£’000
(33,656)
£’000
(3,820)
-
-
-
348
(7)
162
-
503
-
-
-
(348)
7
(30,787)
20,798
(4,126)
(14,456)
-
-
-
-
-
-
-
-
30,787
-
30,787
-
939
71
1,010
-
-
-
-
-
(8,442)
(8,442)
-
(8,442)
24
(8,418)
-
-
4,126
4,126
-
-
-
20,959
939
71
21,969
24
24
-
-
-
As at 31 May 2015
Loss for the year
Other comprehensive income:
Currency translation differences
Total comprehensive income
Transactions with owners:
Shares issued in group reconstruction
Reorganisation of share capital
Creation of merger reserve
Issue of equity shares
Share option charge
Exercise of conversion option
Total transactions with owners
As at 31 May 2016
510
16,273
2,113
30,787
(53)
(1,926)
(37,973)
9,731
Loss for the year
Other comprehensive income:
Currency translation differences
Total comprehensive income
Transactions with owners:
Share option charge
-
-
-
-
-
-
-
-
-
-
-
74
-
-
-
-
-
222
-
-
-
-
-
-
(5,023)
(5,023)
-
-
-
222
-
74
As at 31 May 2017
510
16,273
2,187
30,787
169
(1,926)
(42,996)
5,004
The accompanying notes form an integral part of the consolidated financial statements.
26
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017
Consolidated Statement of Cash Flows
Year to 31 May 2017
Year to 31 May 2016
Notes
Cash flows from operating activities
Loss after income tax
Adjusted by:
Depreciation and amortisation
Share based payment charge
Gain arising on debt settlement
Loss on derivative financial instrument
Settlement of IPO costs via equity shares
Interest received
Interest expense
Inventory
Trade and other receivables
Trade and other payables
Taxes received
Exchange movement
Cash generated from operations
Interest paid
Interest received
Income tax received
Net cash generated from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Development expenditure capitalised
Interest received
Net cash used in investing activities
Cash flows from financing activities
Proceeds from share issue
Repayment of long term borrowings
New other loans
Net cash (used in)/generated from financing activities
Movement in cash attributable to foreign exchange
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
15
The accompanying notes form an integral part of the consolidated financial statements.
£’000
(5,023)
91
74
-
-
-
26
(69)
(135)
177
315
(293)
222
(4,615)
69
(26)
293
(4,279)
(7)
(415)
-
(422)
-
(388)
-
(388)
(33)
(5,089)
10,197
5,075
£’000
(8,442)
78
939
(1,564)
4,126
1,142
(5)
737
(8)
(304)
133
(566)
(11)
(3,745)
-
566
(3,179)
(64)
(108)
5
(167)
11,448
(423)
1,250
12,275
(76)
8,929
1,344
10,197
27
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
1. General information
Oncimmune Holdings Plc (the ‘Company’) is a limited company incorporated and domiciled in England and Wales. The
registered office of the company is Clinical Sciences Building, City Hospital, Hucknall Road, Nottingham, NG5 1PB. The
registered company number is 09818395.
The Group’s principal activity is that of cancer diagnosis.
The Directors of Oncimmune Holdings Plc are responsible for the financial information and contents of the financial
information.
2. Accounting policies
The principal accounting policies applied in the preparation of the consolidated financial information are set out below. These
policies have been consistently applied to all years presented, unless otherwise stated.
Basis of preparation
The Group has prepared its consolidated financial statements in accordance with International Financial Reporting Standards
(“IFRSs”) as adopted in the European Union, IFRIC Interpretations and the Companies Act 2006 applicable to companies
reporting under IFRS.
The Company was incorporated on 9 October 2015 and was re-registered as a public limited company on 14 December 2015.
On 23 November 2015, a group re-organisation was completed, by means of a share for share exchange, as result of which
the newly incorporated company, Oncimmune Holdings Plc, became the parent company of the Group.
The companies involved in the above share for share exchange have not previously been presented in the consolidated
financial statements of a single legal entity. However, the underlying business was ultimately controlled and managed by the
same parties before and after the share for share exchange and that control was not transitory. The transactions outlined
above, therefore, meet the definition of a common control transaction in accordance with IFRS 3 Business Combinations.
IFRS does not provide any specific guidance on accounting for common control transactions and IFRS 3 excludes common
control transactions from its scope; therefore the Directors have selected an accounting policy in accordance with paragraphs
10-12 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. The consolidated entity meets the definition
of a group reconstruction under FRS 102 19,27 and has therefore been accounted for under the principals of merger
accounting as outlined in FRS 102, paragraphs 19.29 – 19.33, merger accounting. The consolidated financial statements have
therefore been prepared as if Oncimmune Limited and its subsidiaries had been held by Oncimmune Holdings Plc from
inception and therefore the results and position of Oncimmune Limited have been reflected in the comparatives.
The preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The
areas involving a high degree of judgement or complexity, or areas where assumptions and estimates are significant to the
consolidated financial statements, are disclosed in note 3.
The consolidated financial statements have been prepared on a going concern basis and under the historical cost convention.
After considering the year end cash position, making appropriate enquiries and reviewing budgets and profit and cash flow
forecasts for the foreseeable future (and in any event for a period of at least 12 months from the approval date of these
financial statements), the Directors have formed a judgement at the time of approving the financial statements that there is
a reasonable expectation that the Group has sufficient resources to continue in operational existence for the foreseeable
future. For this reason the Directors consider the adoption of the going concern basis in preparing the Consolidated financial
statements is appropriate. The future prospects of the business has been further detailed in the Strategic Report.
The consolidated financial statements presented in sterling and has been rounded to the nearest thousand (£’000).
28
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017Notes to the Consolidated Financial Statementsfor the Year Ended 31 May 2017
Standards, amendments and interpretations to existing standards
Standards, amendments and interpretations to existing standards that are not yet effective and have not been early
adopted by the Group in these financial statements.
At the date of authorisation of the financial statements, certain new standards, amendments and interpretations to existing
standards have been published but are not yet effective. The Group has not early adopted any of these pronouncements. The
new standards, amendments and interpretations that are expected to be relevant to the Group’s financial statements in the
future are as follows:
Standard/
interpretation
Content
Applicable for financial
years beginning on/after
IFRS 9
IFRS 15
IFRS 16
IFRS 1
IFRS 2
IFRS 4
IFRS 12
IAS 7
IAS 12
IAS 28
IAS 39
IAS 40
Financial Instruments
Revenue from Contracts with Customers
Leases
First time adoption (amendments)
Share based payments (amendments)
Insurance contracts (amendments)
Disclosure of interest in other entities (amendments)
Statement of Cash flows (amendments)
Income Taxes (amendments)
Investments in Associates and Joint Ventures (amendments)
Financial Instruments: Recognition and measurement (amendments)
Investment Property (amendments)
IFRIC 22
Foreign Currency transactions and advance consideration (amendments)
*Not yet adopted by the EU.
1 January 2018*
1 January 2018*
1 January 2019*
1 January 2018*
1 January 2018*
1 January 2018*
1 January 2017*
1 January 2017*
1 January 2017*
1 January 2018*
1 January 2018*
1 January 2018*
1 January 2019*
The effective dates stated above are those given in the original IASB/IFRIC standards and interpretations. As the Group
prepares its financial statements in accordance with IFRS as adopted by the European Union (EU), the application of new
standards and interpretations will be subject to their having been endorsed for use in the EU via the EU endorsement
mechanism.
The Directors are in the process of assessing the potential impact of IFRS 15 on the financial statements. The Directors do
not expect the adoption of the other standards and interpretations to have a material impact on the consolidated financial
statements in the period of initial adoption.
Revenue
The amount shown as revenue in the statement of comprehensive income comprises royalties received and receivable and, in
addition, amounts received and receivable in respect of the provision of medical testing services, in the US and other markets,
including the UK.
Revenue is recognised at the fair value of the consideration received or receivable and excludes intra-group sales, value
added tax and trade discounts.
29
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
Revenue is recognised when the amount can be reliably measured and it is probable that future economic benefits associated
with the transaction will flow to the entity.
Royalty income is recognised when the tests to which the royalty licences relate are completed by third parties. Amounts
receivable in respect of the provision of medical testing services are recognised when these services are delivered.
Research and development
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
Development expenditure, where it meets certain criteria (given below), is capitalised and amortised on a straight-line basis
over its useful life which is currently five years. Asset lives are subject to regular review and an impairment exercise carried out
at least once a year. Where no internally-generated intangible asset can be recognised, development expenditure is written-
off in the period in which it is incurred.
An intangible asset arising from development is recognised if, and only if, the group can demonstrate the following:
• the technical feasibility of completing the intangible asset so that it will be available for use or sale;
• the intention to complete the intangible asset and use or sell it;
• the ability to sell or use the intangible asset
• how the intangible asset will generate probable future economic benefits. Among other things, the group can
demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be
used internally, the usefulness of the intangible asset.
• the availability of adequate technical, financial and other resources to complete the development and to use of sell the
intangible asset.
• the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The Group has reviewed research and development expenditure, to determine whether any of that spend could qualify
as development expenditure which satisfies the requirements for capitalisation set out above. As a result, £415,000 (2016:
£108,000) of development expenditure has been capitalised.
Property, plant and equipment
Property, plant and equipment is stated at historic cost, including expenditure that is directly attributable to the acquired item,
less accumulated depreciation and impairment losses.
Depreciation is calculated on a straight line basis over the deemed useful life of an asset and is applied to the cost less any
residual value. The asset classes are depreciated on a straight line basis over the following periods:
Laboratory equipment
Office equipment
Computer equipment
3 - 7 years
3 - 7 years
3 - 4 years
The carrying value of the property, plant and equipment is compared to the higher of value in use and the fair value less costs
to sell. If the carrying value exceeds the higher of the value in use and fair value less the costs to sell the asset then the asset
is impaired and its value reduced by recognising an impairment in profit or loss.
Impairment testing of non-current assets
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash flows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-
generating unit level. Those intangible assets not yet available for use and goodwill are tested for impairment at least annually.
All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable.
30
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017Notes to the Consolidated Financial Statementsfor the Year Ended 31 May 2017
An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and
value in use based on an internal discounted cash flow evaluation. All assets are subsequently reassessed for indications that
an impairment loss previously recognised may no longer exist.
Inventories
Inventory is carried at the lower of cost or net realisable value after making due allowance for obsolete and slow moving
stock. Net realisable value is calculated based on the revenue from sale in the normal course of business less any costs to
sell.
Leased assets
In accordance with IAS 17 Leases, the economic ownership of a leased asset is transferred to the lessee if the lessee bears
substantially all the risks and rewards related to the ownership of the leased asset. The related asset is then recognised at the
inception of the lease at the fair value of the leased asset or, if lower, the present value of the minimum lease payments plus
incidental payments, if any.
All other leases are treated as operating leases. Payments on operating lease agreements are recognised as an expense on a
straight-line basis. Associated costs, such as maintenance and insurance, are expensed as incurred. Lease incentives received
are recognised in the consolidated statement of comprehensive income on a straight-line basis over the lease term.
Taxation
Income tax on the profit or loss for the year comprises current and deferred tax.
Current tax is the expected tax payable on the taxable income for the year, using current rates, and any adjustments to the tax
payable in respect of previous years. In so far as group companies are entitled to UK tax credits on qualifying research and
development expenditure, such amounts are recognised when received.
Deferred taxation is provided on all temporary differences between the carrying amount of the assets and liabilities in the
financial statements and the tax base. Deferred tax assets are recognised only to the extent that it is probable that future
taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets and liabilities are
not discounted. Deferred tax is determined using the tax rates that have been enacted or substantially enacted by the balance
sheet date, and are expected to apply when the deferred tax liability is settled or the deferred tax asset is realised.
Deferred tax is provided on temporary differences arising on investments in subsidiaries except 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.
Tax is recognised in profit or loss, except where it relates to items recognised directly in equity, in which case it is recognised
in equity.
Share based compensation
Equity-settled share-based payments are recognised as an expense in profit or loss, based on the fair value of the option at
the date of grant. Such costs are spread over the vesting period, adjusted for the best available estimate of the number of
share options expected to vest, with a corresponding credit to equity, net of deferred tax where applicable. Such adjustments
are only made in respect of non-market performance vesting conditions. No adjustment is made to the expense recognised in
prior periods if fewer share options ultimately are exercised than originally estimated. Vesting conditions relate to continuing
employment.
On the re-organisation in November 2015 the existing Oncimmune Limited schemes were rolled over into the 2015
Oncimmune Holdings Plc scheme with Oncimmune Holdings Plc taking on the obligation for the exercise of the options.
Modification accounting was performed resulting in the incremental fair value at the date of the modification being calculated.
The incremental fair value is the excess of the fair value of the award immediately after the modification over the fair value
immediately before the modification. Where there was an incremental fair value this was charged over the remainder of the
vesting period, together with the original charge relating to the grant date of the original reward. Recognition of a cost of
investment in Oncimmune Holdings Plc and a corresponding reserve in respect of the fair value of the options rolled over was
considered, however no investment was recognised as the amount was not considered material.
31
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
Where the granting of share options has coincided with the issue of shares, for cash, to third party investors, the fair value of
such options is based on the issue price for those shares which is considered to be an arm’s length value.
Employee benefit trust
Assets, other than shares, held by the Oncimmune Limited’s Employee Benefit Trust (EBT) are included in the group’s balance
sheet under the appropriate heading. Shares in the company held by the EBT are disclosed as a deduction from shareholder’s
funds and dividend income is excluded in arriving at profit before tax and deducted from aggregate dividends paid and
proposed. Reflecting the substance of these arrangements any amounts which the trustees of the EBT may resolve, pursuant
to their discretionary powers, to pay to any beneficiaries of the EBT are charged to the profit or loss account only when paid,
subject to statutory deductions.
Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the main decision-making
body of the Group, which collectively comprises the Executive Directors. The Executive Directors are responsible for allocating
the resources and assessing the performance of the operating segments.
Exceptional items
Exceptional items are treated as such if the matters are non-recurring, material and fall outside of the operating activities of
the Group.
Government grants
Government grants receivable are recognised on receipts of cash. Related expenditure is recognised as it occurs.
Financial instruments
Financial instruments are assigned to their different categories by management on initial recognition, depending on the
contractual arrangements.
Financial assets
The Group’s financial assets fall within the heading of ‘Loans and receivables’. Loans and receivables comprise trade and
certain other receivables as well as cash and cash equivalents.
Loan and receivables are recognised when the Group becomes a party to the contractual provisions of the instrument and are
recognised at fair value and subsequently measured at amortised cost using the effective interest method less any provision
for impairment, based on the receivable ageing, previous experience with the debtor and known market intelligence. Any
change in their value is recognised in the income statement.
Derecognition of financial assets occurs when the rights to receive cash flows from the investments expire or are transferred
and substantially all of the risks and rewards of ownership have been transferred. An assessment for impairment is undertaken
at least at each balance sheet date whether or not there is objective evidence that a financial asset or a group of financial
assets is impaired.
Financial liabilities
The Group’s financial liabilities comprise borrowings, a convertible loan and trade and other payables.
Financial liabilities are initially recognised at the fair value of the consideration received net of issue costs. After initial
recognition borrowings are measured at amortised cost using the effective interest method. All interest-related charges are
included in the income statement line item “finance expense”. Financial liabilities are derecognised when the obligation to
settle the amount is removed.
32
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017Notes to the Consolidated Financial Statementsfor the Year Ended 31 May 2017
Convertible loan notes
Convertible loan notes where the conversion option does not meet the definition of equity are accounted for as financial
liabilities. The instruments are split between:
• the “host” debt instrument being a non-convertible debt. The host contract is recognised at fair value and subsequently
measured at amortised cost using the effective interest rate;
• an embedded derivative representing the conversion feature.
The valuation of the embedded derivative is performed at inception of the loan and at the end of each reporting period. The
residual value is then allocated to the host debt instrument.
Warrants to purchase shares
Warrants to purchase shares that do not meet the definition of equity instruments are accounted for as derivative liabilities.
The valuation is performed at inception and at each subsequent reporting with movements recognised in the profit or loss.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call, together with other short term highly liquid
investments which are not subject to significant changes in value and have original maturities of less than three months.
Equity
Equity comprises the following:
• Share capital: the nominal value of equity shares.
• Share premium: includes any premium received on the sale of shares. Any transaction costs associated with the issuing
of shares are deducted from share premium, net of any income tax benefits.
• Own shares and other reserves
• Profit and loss account: retained profits
• Foreign currency translation reserve: differences arising from translation of investments in overseas subsidiaries
• Merger reserve: The merger reserve represents the difference between the parent company’s cost of investment
and a subsidiary’s share capital and share premium. The merger reserve in these accounts has arisen from a group
reconstruction upon the incorporation and listing of the parent company that was accounted for as a common control
transaction. Common control transactions are accounted for using merger accounting rather than the acquisition
method.
Foreign currencies
Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement
of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the
date of the transaction. Exchange differences are taken into account in arriving at the operating profit. The functional currency
of the group and parent company is £’000.
The financial statements of foreign subsidiaries are translated at the rate of exchange ruling at the statement of financial
position date. The exchange differences arising from the retranslation of the opening net investment in subsidiaries are
taken directly to reserves. Where exchange differences result from the translation of foreign currency borrowings raised to
acquire foreign assets (including equity investments) they are taken to reserves and offset against differences arising from the
translation of those assets. All other exchange differences are dealt with through the statement of comprehensive income.
33
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
3. Accounting estimates and judgements
The preparation of financial statements under IFRS requires the Group to make estimates and judgements that affect the
application of policies and reported amounts. Estimates and judgements are based on historical experience and other factors
including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ
from these estimates.
The estimates and judgements which have a significant risk of causing a material adjustment to the carrying amount of assets
and liabilities are discussed below:
• Useful lives of depreciable assets
Management reviews the useful lives of depreciable assets at each reporting date. At the reporting date management
assesses that the useful lives represent the expected utility of the assets to the Group. Actual results, however, may vary
due to unforeseen events.
•
Inventory provision
Inventory provisions are based on an estimate of the realisable value of the inventory items.
•
Impairment
An impairment loss is recognised for the amount by which the asset’s or cash generating unit’s carrying amount exceeds
its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from
each cash-generating unit and determines a suitable discount rate in order to calculate the present value of those cash
flows. In the process of measuring expected future cash flows management makes assumptions about future operating
results. These assumptions relate to future events and circumstances. In most cases, determining the applicable
discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-
specific risk factors.
• Capitalisation of development costs
Development expenditure, where it meets certain criteria (given below), is capitalised and amortised on a straight-line
basis over its useful life. Asset lives are subject to regular review and an impairment exercise carried out at least once a
year. Where no internally-generated intangible asset can be recognised, development expenditure is written-off in the
period in which it is incurred. Development expenditure is only recognised when all of the criteria set out in IAS 38 are
met. Management applies judgement in making this assessment and in determining attributable costs for each project.
• Deferred tax
Judgement has been applied in respect of the non-recognition of deferred tax on losses as detailed in note 10 on the
basis of uncertainty over the timing of future reversal.
34
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017Notes to the Consolidated Financial Statementsfor the Year Ended 31 May 2017
4. Segmental information
Management has determined the operating segments based on the reports reviewed by the strategic decision maker
comprising the Board of Executive Directors. The segmental information is split on the basis of geographical analysis however,
management report only the contents of the income statement and therefore no statement of financial position information is
provided on a segmental basis in the following tables:
Revenue
Class of business
Distribution of testing products
Royalties
Total revenues
Geographical analysis by destination
United Kingdom
North America
Rest of the world
Total revenues
Geographical analysis by origin
United Kingdom
North America
Rest of the world
Total revenues
31 May 2017
31 May 2016
£’000
£’000
215
-
215
80
135
-
215
-
215
-
215
262
168
430
133
294
3
430
-
427
3
430
35
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS Operating segments
As at 31 May 2017
Revenue
Cost of sales
Gross margin
Operating loss
Net finance and other costs
Loss before tax
Taxation
As at 31 May 2016
Revenue
Cost of sales
Gross margin
Operating loss
Net finance and other costs
Loss before tax
Taxation
UK
£’000
80
(247)
(167)
(3,279)
UK
£’000
304
-
304
(2,748)
USA
£’000
135
(284)
(149)
(1,171)
USA
£’000
126
(147)
(21)
(801)
Holdings
Consolidated
£’000
£’000
-
-
-
(823)
215
(531)
(316)
(5,273)
(43)
(5,316)
293
(5,023)
Holdings
Consolidated
£’000
£’000
-
-
-
(2,165)
430
(147)
283
(5,714)
(3,294)
(9,008)
566
(8,442)
Assets are not reported by business segment to the Chief Operating Decision Maker.
Information about major customers
In the year to 31 May 2017, the group had three customers who contributed more than 10% of group revenue individually.
These three customers contributed approximately 83% of group revenue.
In the year to 31 May 2016, the group had three customers who contributed more than 10% of group revenue individually.
These three customers contributed approximately 80% of group revenue.
36
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017Notes to the Consolidated Financial Statementsfor the Year Ended 31 May 2017
5. Exceptional items
Exceptional items in the year comprise the following:
Costs associated with the IPO
Charged in profit or loss
Charged directly to equity
Gain on debt waiver
Fair value loss on derivatives (Note 23)
May 2017
May 2016
£’000
£’000
-
-
-
-
1,226
8
(1,564)
4,126
Costs directly attributable to the issuing of shares are charged to the share premium account.
6. Loss before income tax
Loss before taxation has been arrived at after charging:
Depreciation of owned property, plant and equipment
Amortisation of intangible assets
Research and development
Share based payments expense
Employee costs (Note 8)
Operating lease rentals
-
-
Other operating leases
Plant and machinery
Audit and non-audit services:
Fee payable to the company’s auditor:
Fee for the audit of the parent company
Fees payable to the company’s auditor and its associates for other services:
The audit of the company’s subsidiaries pursuant to legislation
Tax compliance services
Tax advisory services
Audit related assurance services
All other assurance services
Fees for other assurance services – accounting
Fees for other assurance services – reporting accountant
May 2017
May 2016
£’000
£;000
63
28
1,025
74
2,202
116
-
15
24
6
6
4
1
-
-
71
7
789
939
2,828
51
-
15
23
6
21
-
1
17
150
37
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
7. Remuneration of key personnel
The Group consider that the Directors are the key personnel:
Share based payments expense
Salary, fees, bonuses and other short term emoluments
Social security costs
Details of Director’s remuneration are disclosed in the Directors’ report.
8. Employees
The average number of employees (including Directors) during the period was as follows:
The cost of employees (including directors) during the period was made up as follows:
Wages and salaries
Social security costs
Pension cost
Share based payments
9. Net finance costs
Finance revenue
Fair value loss on embedded derivatives (note 23)
Finance costs (convertible loan and other loans)
38
May 2017
May 2016
£’000
74
409
44
527
£’000
850
670
87
1,607
May 2017
May 2016
£’000
£’000
47
33
May 2017
May 2016
£’000
£’000
2,021
106
1
74
2,202
1,739
150
-
939
2,828
May 2017
May 2016
£’000
26
-
(69)
(43)
£’000
5
(4,126)
(737)
(4,858)
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017Notes to the Consolidated Financial Statementsfor the Year Ended 31 May 2017
10. Income tax credit
Current tax:
UK corporation tax credit at rates: 2017 – 19.83% 2016 -20%
Prior period adjustment
May 2017
May 2016
£’000
(293)
-
(293)
£’000
(566)
-
(566)
Tax recoverable for the period
(293)
(566)
Factors affecting current tax charge:
The tax assessed on the profit for the period is different to the standard rate of corporation tax in the UK. The differences are
explained below:
May 2017
May 2016
Loss before income tax
Loss for the year multiplied by the standard rate of corporation tax
Expenses not deductible for tax purposes
Adjustment in respect of prior periods
Income not assessable for tax
Tax uplift in R&D expenditure
Losses surrendered for R&D claims
Losses carried forward
£’000
(5,316)
(1,054)
6
-
-
(295)
228
822
(293)
£’000
(9,008)
(1,801)
1,414
(1)
(313)
(281)
136
280
(566)
The group has unrelieved UK tax losses of £12,247,000 (2016: £9,882,000) and unrelieved overseas tax losses of £17,917,000
(2016: £14,007,000). Deferred tax of £5,118,000 has not been provided given the uncertainty over the timing of a future
reversal.
39
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
11. Property, plant and equipment
Cost
At 31 May 2016
Additions
Foreign exchange movement
At 31 May 2017
Depreciation
At 31 May 2016
Charge for the year
Foreign exchange movement
At 31 May 2017
Net book values
At 31 May 2017
At 31 May 2016
Laboratory
Equipment
£’000
Computer
Equipment
£’000
Office
Equipment
£’000
980
-
38
1,018
729
61
5
795
223
251
18
7
-
25
16
2
-
18
7
2
30
-
-
30
30
-
-
30
-
-
Total
£’000
1,028
7
38
1,073
775
63
5
843
230
253
There were no assets held under finance leases during 2017 or 2016. The amount of depreciation expense charged to the
income statement in respect of such assets was £nil in 2017 and 2016.
12. Intangible Assets
Cost
At 31 May 2016
Additions
Disposals
At 31 May 2017
Depreciation
At 31 May 2016
Charge for the year
At 31 May 2016
Net book values
At 31 May 2017
At 31 May 2016
All intangible assets are from internal development.
40
Intangible
Assets
£’000
143
415
558
12
28
40
518
131
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017Notes to the Consolidated Financial Statementsfor the Year Ended 31 May 2017
13. Trade and other receivables
Trade receivables
Other debtors
Prepayments and accrued income
May 2017
May 2016
£’000
£’000
50
191
20
261
116
142
81
339
At 31 May 2017 trade receivables were stated net of provisions of £nil (2016 - £nil). The remaining balances were considered
recoverable on normal trade terms. There is no material difference between the fair value and the varying value of these
assets. The maximum credit risk exposure at the reporting date equated to the fair value of trade receivables as stated net of
provisions. Standard payment terms are 30 days net.
14. Inventories
Diagnostic testing materials
Inventory is stated net of a £501,000 provision (2016: £509,000).
15. Cash and cash equivalents
Cash balances at the end of each year are as follows:
Cash and cash equivalents per statement of financial position
Cash per statement of cash flows
16. Trade and other payables
Trade payables
Other taxation and social security
Other creditors
Accruals and deferred income
May 2017
May 2016
£’000
323
323
£’000
188
188
May 2017
May 2016
£’000
5,075
5,075
£’000
10,197
10,197
May 2017
May 2016
£’000
£’000
590
-
122
135
847
379
-
69
81
529
41
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
17. Borrowing
The Group uses bank overdrafts, bank and other loans to finance acquisitions; the following balances remain outstanding as
shown:
Non-current
Other loans
Current
Other loans
May 2017
May 2016
£’000
£’000
-
-
502
502
395
395
496
496
Other loans at 31 May 2017 also include a venture loan facility originally of €1,862,649 (approximately £1.5m), from Harbert
European Speciality Lending Company Limited (‘Harbert’), repayable in equal instalment over the period to 31 January 2018
at an interest rate of 10%, plus a further 3% to be paid with the final instalment. The facility is secured by a fixed and floating
charge over the company’s assets and undertaking. As at the year end £502,281 was falling due within one year and £nil was
falling due after one year (2016: £495,920 and £394,882 respectively).
18. Lease commitments
At the end of each period the Group had total minimum annual payment commitments under non-cancellable operating lease
agreements as set out below:
May 2017
May 2016
£’000
£’000
Land and buildings
Operating leases which expire:
Within one year
In two to five years
In over five years
19. Share capital
Authorised:
Ordinary shares of £0.01 each
Preference shares of £0.01 each
A Preference shares of £0.01 each
Allotted, called up and fully paid:
Ordinary shares of £0.01 each
Preference shares of £0.01 each
42
21
-
-
21
May 2017
May 2016
Shares
57,115,594
-
-
51,024,404
-
51,024,404
£
Shares
571,155
-
-
571,155
510,244
-
510,244
57,115,594
-
-
51,024,404
-
51,024,404
51
21
-
72
£
571,155
-
-
571,155
510,244
-
510,244
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017Notes to the Consolidated Financial Statementsfor the Year Ended 31 May 2017
20. Share based payments
The Group has granted options to certain directors and employees in respect of Ordinary shares
The Group has the following share options schemes in place:
The 2005 Share Option Scheme
The 2005 Share Option Scheme has the following principal terms:
• the scheme is limited to eligible persons, being employees, officers, SAB members and consultants of the Group;
• the scheme provides for options to be granted to eligible persons to subscribe for ordinary shares of 0.01p each in the
capital of Oncimmune Holdings Plc;
• the scheme was limited to options over 14,500 ordinary shares in Oncimmune Limited (now 725,000 options over
Ordinary shares of Oncimmune Holdings Plc), all of which have been granted and options may be issued under the
Enterprise Management Incentive (EMI) rules or as unapproved options;
• no option may be exercised later than the tenth anniversary of the date of grant, extended to 20 years for certain option
holders;
• each option issued under the scheme had a vesting period commencing for employees, officers and consultants on the
first anniversary of the date of the grant and expiring on the fourth anniversary of the date of grant and for SAB members
commencing on the second anniversary and expiring on the fourth anniversary of the date of grant;
• options issued under the scheme are non-transferable;
• vested options must be exercised (i) within 24 months of an option holder’s death; (ii) within 3 months of an option holder
ceasing to hold office for reasons of disability, redundancy or retirement (unless otherwise agreed by the Directors); and
(iii) within 6 months of an option holder’s resignation (if an employee, officer or consultant of the Operating Group) and
within 24 months of an option holder’s resignation (if an SAB member), or in each case the options shall lapse
•
If an option holder shall leave the Operating Group for any reason, options granted to that option holder shall only be
exercisable in the Directors’ discretion;
• on ‘takeover’ of Oncimmune Holdings Plc where a general offer is made to acquire the whole of the issued share capital
of Oncimmune Holdings Plc (or any class of share capital of Oncimmune Holdings Plc), the acquiring company may make
a ‘rollover’ offer to the option holders, which the option holders shall be deemed to accept, such that their options shall
rollover into options in the acquiring company upon the same terms; and
• Oncimmune Holdings Plc may at any time add to or vary the scheme rules provided that this does not affect the
liabilities of any option holder.
The 2007 Share Option Scheme
The 2007 Share Option Scheme is on the same principal terms as the 2005 Share Option Scheme save that:
• the scheme was limited to an additional 25,029 (increased to 68,056 options over ordinary shares in Oncimmune
Limited and which rolled over 3,402,800 options over Ordinary Shares), of which 23,511 options over ordinary shares
in Oncimmune Limited (rolled over into 1,175,550 options over Ordinary Shares of Oncimmune Holdings Plc) have been
granted;
• the vesting period for all options issued under the scheme commenced on the first anniversary of the date of grant and
expired on the third anniversary of the date of grant, and;
• vested options must be exercised (i) within 12 months of an option holder’s death; (ii) within 3 months of an option holder
ceasing to hold office for reasons of disability, redundancy or retirement (unless otherwise agreed by the Directors) and
(iii) on or before an option holder’s resignation, or in each case the options shall lapse.
43
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
In November 2015, the two existing option schemes were rolled over into the 2015 Oncimmune Holdings Scheme on the
terms set out above.
Options in grant
Weighted average exercise price
Weighted average life remaining in years
*Share options issued by Oncimmune Limited
May 2017
May 2016
Number of options Number of options*
3,650,550
1,825,550
£0.77
5
£0.83
3
The fair value of options granted by the Company has been arrived at using the Black-Scholes model. The assumptions
inherent in the use of this model are as follows:
Volatility
Dividend yield
Risk free rate
Discount factors
May 2017
May 2016
20%
0%
3%
10%
12%
0%
1%
0%
• The option life is assumed to be at the end of the allowed period
• Historical staff turnover is taken into account when determining the proportion of granted options that are likely to vest
by the end of the period
• Following the application of the vesting probability assumptions, there are no further vesting conditions other than
remaining in employment with the Company during the vesting period
• No variables change during the life of the option (e.g. dividend yield)
• Volatility has been estimated as there is no history of the Company’s share price.
At the period end each year the Group had the following options at the weighted average exercise prices (WAEP) shown:
Expiry date
Outstanding at 1 June
Granted
Lapsed
Modified
Exercised
Outstanding at 31 May
Weighted average remaining
contractual life in years
WAEP
0.83
-
May 2017
Number
1,825,550
1,825,000
0.77
3,650,550
5
WAEP
May 2016
37.00
-
(36.17)
0.83
Number
36,511
-
1,789,039
1,825,550
3
The options are subject to the rules of 2016 Share Option plan (an amalgamation of the Company’s 2005 and 2007 Share
option Plans).
The Group recognised total expenses in respect of the option schemes above of £74,435 (2016: £939,000) related to equity-
settled share based payment transactions during the year.
44
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017Notes to the Consolidated Financial Statementsfor the Year Ended 31 May 2017
Warrants
The group has warrants outstanding as follows, over the £0.01 Ordinary Shares:
Expiry date
Outstanding at 1 June 2016:
Directors
Harbert European Growth Fund
Zeus Capital
Granted in the year
Outstanding at 31 May 2017:
Grant date
Number
Subscription price
November 2015
May 2016
May 2016
988,750
282,515
1,041,314
Nil
2,322,579
£0.01
£0.66368
£1.30
21. Related party transactions
During the year, the University of Nottingham, a significant shareholder, provided support and facilities to the group to enable
it to undertake research:
Costs incurred
Accrued at year end
22. Categories of financial instruments
Current financial assets
Loans and receivables
Cash and cash equivalents
Total financial assets
Non-financial assets
Total
Non-current financial liabilities
At amortised cost - borrowings
Current financial liabilities
At amortised cost - borrowings
At amortised cost - payables
Total current financial liabilities
Non financial liabilities
Total current liabilities
May 2017
May 2016
£’000
174
40
£’000
138
20
May 2017
May 2016
£’000
£’000
261
5,075
5,336
-
5,336
-
502
901
1,403
-
1,403
258
10,197
10,445
81
10,536
395
496
529
1,025
57
1,082
45
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
23. Convertible loan note
In October 2013, Oncimmune Ltd received a £1.8 million loan from under the terms of a convertible loan note, which accrued
interest at rates of 25%. Monthly repayments of capital plus accrued interest over a 24-month period commenced on 1 May
2014 or earlier under specified circumstances, albeit subordinated to the Harbert loan (note 16 above).
The terms of the loan include the following conversion options:
• on a relevant fund raising the holder may convert at, a price per share being a 20% discount to the price per share of the
class of share being issued and paid by investors on that relevant fund raising;
• on a change of control, a price per share being a 20% discount to the price per A Preference share received in
connection with the acquisition of shares on the change of control;
• on a voluntary conversion at the voluntary conversion price.
Management carried out an assessment of the terms of the loan and have judged that the instrument consisted of two
components:
• a host instrument, held at amortised cost
• a single compound embedded derivative that comprises multiple embedded derivatives (comprising the various
prepayment options and the conversion option) that expose Oncimmune Ltd to inter-related risks. The compound
embedded derivative has been recognised separately as a derivative financial instrument at fair value through profit and
loss.
A fair value exercise to determine the value of the components was performed at inception of the loan (October 2013). The
valuation takes into account the share price of the issuer and the time value of the option.
The embedded derivative is defined as the value of the derivative liability comprising the various prepayment options and the
conversion option. The valuation takes into account the share price of the issuer and the time value of the option.
Valuation techniques were selected based on the cSharacteristics of each instrument, with the overall objective of maximising
the use of market based information. The valuation technique for the single compound embedded derivative, which is a level 3
item, is as follows:
The fair value of the compound embedded derivative recognised separately from the host convertible loan was estimated
using a present value technique. The fair value at each date is estimated by probability weighting the prepayment feature,
adjusting for risk and discounting at 20 per cent, based upon commercially applicable rates, and by reference to the value of
the equity instruments associated with the conversion feature. During the period to 31 May 2016 the loans were converted to
equity. Finance costs in respect of the fair value movement of £4,125,000 were recognised and the fair value of the instrument
on extinguishment was £4,196,000.
Fair value of net proceeds
Net proceeds
Embedded derivative
Liability component
Liability component
Interest charge for the year
46
May 2017
May 2016
£’000
£’000
-
-
-
-
-
-
-
-
-
-
-
-
402
402
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017Notes to the Consolidated Financial Statementsfor the Year Ended 31 May 2017
24. Loss per share
The basic per share is calculated by dividing the loss attributable to the owners of Oncimmune Holdings Plc by the weighted
average number of ordinary shares in issue during the year. Diluted earnings per share has not been calculated as the entity is
loss making.
Earnings
Loss on ordinary activities for the purposes of basic and fully diluted loss per share
(£’000)
Loss on ordinary activities for the purposes of basic and fully diluted loss per share
(£’000) (before highlighted items)
Number of shares
Weighted average number of shares for calculating basic and fully diluted earnings
per share
Loss per share
Basic and fully diluted loss per share
Basic and fully diluted loss per share (before exceptional items)
May 2017
May 2016
(5,023)
-
(8,442)
(4,654)
51,024,404
35,866,356
9.84p
9.84p
23.54p
12.97p
25. Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk (interest rate risk), credit risk and liquidity risk.
Market risk - Foreign exchange risk
As disclosed in note 4 in the years to 31 May 2017 and 31 May 2016 over 60% of the Group’s income by destination was into
the North American market and denominated in US dollars. The Group’s income stream is exposed to fluctuations in the US
dollar exchange rate against Sterling.
Market risk - Interest rate risk
The Group carries borrowings in the form of other loans as all borrowings are on fixed interest terms, the Directors consider
that no risk arises in respect of future cash flows.
Market risk - Price risk
The Group is not exposed to either commodity or equity securities price risk.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
In order to minimise this risk, the Group endeavours only to deal with companies which are demonstrably creditworthy. In
addition, a significant proportion of revenue results from cash transactions. The aggregate financial exposure is continuously
monitored. The maximum exposure to credit risk is the value of the outstanding amount of trade receivables. The
management do not consider that there is any concentration of risk within either trade or other receivables.
Liquidity risk
The Group currently holds cash balances to provide funding for normal trading activity. The Group also has access to both
short term and long term borrowings. Trade and other payables are monitored as part of normal management routine.
47
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
Borrowings and other liabilities mature according to the following schedule:
2017
Within 1 year
One to five years
Trade payables
Other taxation and social security
Other creditors
Accruals and deferred income
Convertible loans
Other loans
£’000
590
57
122
135
-
502
£’000
-
-
-
-
-
-
2016
Within 1 year
One to five years
Trade payables
Other taxation and social security
Other creditors
Accruals and deferred income
Convertible loans
Other loans
Capital risk management
The Group’ s capital management objectives are:
• to ensure the Group’s ability to continue as a going concern; and
• to provide an adequate return to shareholders
by pricing products and services commensurate with the level of risk.
£’000
496
57
69
81
-
496
£’000
-
-
-
-
-
395
The Group monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the
face of the statement of financial position.
Total equity
Cash and cash equivalents
Capital
Total financing
Borrowings
Overall financing
May 2017
May 2016
£’000
5,064
5,075
10,139
502
502
£’000
9,731
10,197
19,928
891
891
Capital to overall financing ratio
2,019.7%
2,236.6%
48
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017Notes to the Consolidated Financial Statementsfor the Year Ended 31 May 2017
26. Events after the balance sheet date
The Company raised a further £5m (£4.78m net of expenses) via a placement in September 2017 issuing up to 4.167 million
shares. Of this, the issuance of 833,333 Ordinary Shares representing £1.0m remain conditional on receipt from HM Revenues
& Customs of confirmation that this investment will be a qualifying holding for the purposes of Part 6 of the Income Tax Act
2007.
27. Subsidiaries consolidated
The subsidiaries included in the consolidated financial statements of the Group are detailed below. No subsidiary
undertakings have been excluded from the consolidation.
Company
Holding
Country of incorporation Class of share capital held
Direct %
Indirect %
Oncimmune Limited
United Kingdom
Ordinary
100
Oncimmune (USA) LLC
United States of America
Ordinary
100
28. Ultimate controlling party
There is no ultimate controlling party of the Company.
49
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
50
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017 Independent Auditor’s Report
INDEPENDENT AUDITOR’S REPORT TO THE
MEMBERS OF ONCIMMUNE HOLDINGS PLC
We have audited the parent company financial statements of
Oncimmune Holdings Plc for the period ended 31 May 2017,
which comprise the balance sheet, statement of changes
in equity and the related notes. The financial reporting
framework that has been applied in their preparation is
applicable law and United Kingdom Accounting Standards
(United Kingdom Generally Accepted Accounting Practice),
including FRS 101 ‘Reduced Disclosure Framework’.
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.
Respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors’
Responsibilities, the directors are responsible for the
preparation of the parent company financial statements and
for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the parent
company financial statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland).
Those standards require us to comply with the Auditing
Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial
statements is provided on the Financial Reporting Council’s
website at www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion the parent company financial statements:
• give a true and fair view of the state of the company’s
affairs as at 31 May 2017;
• have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting
Practice; and
• have been prepared in accordance with the
requirements of the Companies Act 2006.
Opinion on other matter 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
Directors’ Report for the financial year for which the
financial statements are prepared is consistent with the
financial statements.
• The Strategic Report and Directors’ Report has
been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report under the
Companies Act 2006
In the light of the knowledge and understanding of the parent
company and its environment obtained in the course of the
audit, we have not identified any material misstatements in the
Strategic Report or Directors’ Report.
Matters on which we are required to report by
exception
We have nothing to report in respect of the following matters
where 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.
Other matter
We have reported separately on the consolidated financial
statements of Oncimmune Holdings plc for the year ended 31
May 2017.
Giles Mullins
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Milton Keynes
19 October 2017
51
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
Company Statement of Financial Position
for the Period Ended 31 May 2017
Fixed Assets
Investment
Current assets
Cash
Debtors
Creditors: amounts falling due within one year
Net current assets
Total assets less current liabilities
Capital and reserves
Called up share capital
Share premium account
Profit and loss reserve
Other reserves
Shareholders’ funds
Notes
3
4
5
6
31 May 2017
31 May 2016
£’000
£’000
348
348
25
14,298
184
14,139
14,487
510
16,273
(3,309)
1,013
14,487
14,947
59
14,888
15,236
510
16,273
(2,486)
939
15,236
In accordance with the exemptions permitted by section 408 of the Companies Act 2006, the profit and loss account of the
parent company has not been presented. The parent company loss for the year ended 31 May 2017 was £823,000 (2016:
£6,612,000).
The accompanying notes for an integral part of the company financial statements.
The parent company financial statements were approved by the board on 18 October 2017.
Andrew Millet
Director
52
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017
Company Statement of Changes in Equity
for the Period Ended 31 May 2017
Loss for the year
Total comprehensive income
Transactions with owners:
Issue of equity shares
Exercise of conversion option
Share option charge
Total transactions with owners
As at 31 May 2016
Loss for the year
Total comprehensive income
Transactions with owners:
Issue of equity shares
Exercise of conversion option
Share option charge
Total transactions with owners
Share
capital
£’000
Share
premium
£’000
Other
reserves
£’000
-
-
510
-
510
-
-
20,399
(4,126)
16,273
-
-
-
-
939
939
Retained
earnings
£’000
(6,612)
(6,612)
-
4,126
-
4,126
Total
£’000
(6,612)
(6,612)
20,909
-
939
21,848
510
16,273
939
(2,486)
15,236
-
-
-
-
-
-
-
-
(823)
(823)
(823)
(823)
74
-
74
As at 31 May 2017
510
16,273
1,013
(3,309)
14,487
The accompanying notes form an integral part of the company financial statements.
53
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
Oncimmune Holdings Plc | Annual Report
Year Ended 31 May 2017
1. Accounting policies
The principal accounting policies applied in the preparation of the Company’s financial statements are set out below.
Statement of compliance
The separate financial statements of the Company are presented in accordance with Financial Reporting Standard 101 – ‘The
Reduced Disclosure Framework’. They have been prepared under the historical cost convention.
Adoption of FRS 101
The Company financial statements were prepared in accordance with United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting Practice), including FRS 101 Reduced Disclosure Framework. There were no material
amendments for all periods presented on the adoption of FRS 101, following the transition from IFRS to FRS 101.
Disclosure exemptions adopted
In preparing these financial statements the Company has taken advantage of all disclosure exemptions available under FRS
101. Therefore these financial statements do not include:
• The requirements of IFRS 7 Financial Instruments: Disclosures, as equivalent disclosures are included in the
consolidated financial statements of the group in which the entity is consolidated
• The requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in
respect of:
• paragraph 73 of IAS 16 Property, Plant and Equipment;
• paragraph 118 of IAS 38 Intangible Assets;
• The requirements of paragraphs 10(d) and 111 (statement of cash flows), 134 to 136 (managing capital), and 16 (statement
of compliance with IFRS) of IAS 1 Presentation of Financial Statements.
• The requirements of IAS 7 Statement of Cash Flows and related notes.
• The requirements of paragraph 17 of IAS 24 Related Party Disclosures.
• The requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two
or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a
member.
• The requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d) to 134(f) and 135(c) to 135(e) of IAS 36 Impairment of Assets,
provided that equivalent disclosures are included in the consolidated financial statements of the group in which the
entity is consolidated.
• The requirements of paragraphs 45(b) and 46 to 52 of IFRS 2 Share Based Payments, provided that equivalent
disclosures are included in the consolidated financial statements of the group in which the entity is consolidated.
• The effects of future accounting standards not adopted.
The preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The
areas involving a high degree of judgement or complexity, or areas where assumptions and estimates are significant to the
consolidated financial statements, are disclosed in note 3.
The financial statements of the Company have been prepared on a going concern basis and under the historical cost
convention. The financial statements are presented in sterling and have been rounded to the nearest thousand (£’000).
54
54
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017Notes to the Financial Statements of the Companyfor the Year Ended 31 May 2017
Investments
Investments in subsidiaries are valued at cost less impairment.
Impairment testing of non-current assets
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash flows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at
cash-generating unit level. All other individual assets or cash-generating units are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and
value in use based on an internal discounted cash flow evaluation. All assets are subsequently reassessed for indications that
an impairment loss previously recognised may no longer exist.
Taxation
Income tax on the profit or loss for the year comprises current and deferred tax.
Current tax is the expected tax payable on the taxable income for the year, using current rates, and any adjustments to the tax
payable in respect of previous years. In so far as group companies are entitled to UK tax credits on qualifying research and
development expenditure, such amounts are recognised when received.
Deferred taxation is provided on all temporary differences between the carrying amount of the assets and liabilities in the
financial statements and the tax base. Deferred tax assets are recognised only to the extent that it is probable that future
taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets and liabilities are
not discounted. Deferred tax is determined using the tax rates that have been enacted or substantially enacted by the balance
sheet date, and are expected to apply when the deferred tax liability is settled or the deferred tax asset is realised.
Deferred tax is provided on temporary differences arising on investments in subsidiaries except 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.
Tax is recognised in the income statement, except where it relates to items recognised directly in equity, in which case it is
recognised in equity.
Share based compensation
Equity-settled share-based payments are recognised as an expense in profit or loss, based on the fair value of the option at
the date of grant. Such costs are spread over the vesting period, adjusted for the best available estimate of the number of
share options expected to vest, with a corresponding credit to equity, net of deferred tax where applicable. Such adjustments
are only made in respect of non-market performance vesting conditions. No adjustment is made to the expense recognised in
prior periods if fewer share options ultimately are exercised than originally estimated. Vesting conditions relate to continuing
employment.
On the re-organisation in November 2015 the existing Oncimmune Limited schemes were rolled over into the 2015
Oncimmune Holdings Plc scheme with Oncimmune Holdings Plc taking on the obligation for the exercise of the options.
Modification accounting was performed resulting in the incremental fair value at the date of the modification being calculated.
The incremental fair value is the excess of the fair value of the award immediately after the modification over the fair value
immediately before the modification. Where the was an incremental fair value this was charged over the remainder of the
vesting period, together with the original charge relating to the grant date of the original reward. Recognition of a cost of
investment in Oncimmune Holdings Plc and a corresponding reserve in respect of the fair value of the options rolled over was
considered, however no investment was recognised as the amount was not considered material.
Where the granting of share options has coincided with the issue of shares, for cash, to third party investors, the fair value of
such options is based on the issue price for those shares which is considered to be an arm’s length value.
5555
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
Oncimmune Holdings Plc | Annual Report
Year Ended 31 May 2017
Financial instruments
Financial instruments are assigned to their different categories by management on initial recognition, depending on the
contractual arrangements.
Financial assets
The Company’s financial assets fall within the heading of ‘Loans and receivables’. Loans and receivables comprise trade and
certain other receivables as well as cash and cash equivalents.
Loan and receivables are recognised when the Group becomes a party to the contractual provisions of the instrument and are
recognised at fair value and subsequently measured at amortised cost using the effective interest method less any provision
for impairment, based on the receivable ageing, previous experience with the debtor and known market intelligence. Any
change in their value is recognised in the income statement.
Derecognition of financial assets occurs when the rights to receive cash flows from the investments expire or are transferred
and substantially all of the risks and rewards of ownership have been transferred. An assessment for impairment is undertaken
at least at each balance sheet date whether or not there is objective evidence that a financial asset or a group of financial
assets is impaired.
Financial liabilities
The Company’s financial liabilities comprise borrowings, a convertible loan and trade and other payables.
Financial liabilities are initially recognised at the fair value of the consideration received net of issue costs. After initial
recognition borrowings are measured at amortised cost using the effective interest method. All interest-related charges are
included in the income statement line item “finance expense”. Financial liabilities are derecognised when the obligation to
settle the amount is removed.
Convertible loan notes
Convertible loan notes where the conversion option does not meet the definition of equity are accounted for as financial
liabilities. The instruments are split between:
• the “host” debt instrument being a non-convertible debt. The host contract is recognised at fair value and subsequently
measured at amortised cost using the effective interest rate;
• an embedded derivative representing the conversion feature.
The valuation of the embedded derivative is performed at inception of the loan and at the end of each reporting period. The
residual value is then allocated to the host debt instrument.
Warrants to purchase shares
The valuation of the embedded derivative is performed at inception of the loan and at the end of each reporting period. The
residual value is then allocated to the host debt instrument.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held on call, together with other short term highly liquid
investments which are not subject to significant changes in value and have original maturities of less than three months.
Equity
Equity comprises the following:
• Share capital: the nominal value of equity shares.
• Share premium: includes any premium received on the sale of shares. Any transaction costs associated with the issuing
of shares are deducted from share premium, net of any income tax benefits.
• Other reserves – accumulated share based payment expense.
• Profit and loss account: retained profits.
56
56
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017Notes to the Financial Statements of the Companyfor the Year Ended 31 May 2017
The company has applied S612 merger relief by treating the cost of investment arising from the reorganisation as equal to the
nominal value of shares issued (thus disregarding any premium arising).
2. Accounting estimates and judgements
The preparation of financial statements under IFRS requires the Company to make estimates and judgements that affect the
application of policies and reported amounts. Estimates and judgements are based on historical experience and other factors
including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ
from these estimates.
The estimates and judgements which have a significant risk of causing a material adjustment to the carrying amount of assets
and liabilities are discussed below:
•
Impairment
An impairment loss is recognised for the amount by which the asset’s or cash generating unit’s carrying amount exceeds
its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from
each cash-generating unit and determines a suitable discount rate in order to calculate the present value of those cash
flows. In the process of measuring expected future cash flows management makes assumptions about future operating
results. These assumptions relate to future events and circumstances. In most cases, determining the applicable
discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-
specific risk factors.
• Measurement of derivative liabilities carried at fair value through profit and loss
Management uses valuation techniques to determine the fair value of financial instruments (where active market quotes
are not available). This involves developing estimates and assumptions consistent with how market participants would
price the instrument. Management bases its assumptions on observable data as far as possible but this is not always
available. In that case management uses the best information available. Estimated fair values may differ from the actual
prices that would be achieved in an arm’s length transaction at the reporting date.
3. Investments
At 31 May 2016
Additions
At 31 May 2017
Investments in subsidiary
£’000
348
348
Details of subsidiary undertakings as at 31 May 2016 are as follows:
Company
Holding
Country of incorporation Class of share capital held
Direct %
Indirect %
Oncimmune Limited
United Kingdom
Ordinary
100
Oncimmune (USA) LLC
United States of America
Ordinary
100
5757
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
Oncimmune Holdings Plc | Annual Report
Year Ended 31 May 2017
4. Cash and cash equivalents
Cash
5. Trade and other receivables
Loan to subsidiary undertakings
Other debtors
May 2017
May 2016
£’000
£’000
25
25
-
-
May 2017
May 2016
£’000
14,192
106
14,298
£’000
14,944
3
14,947
At 31 May 2017 receivables were stated net of provisions of £nil. There is no material difference between the fair value and
the varying value of these assets. The maximum credit risk exposure at the reporting date equated to the fair value of trade
receivables as stated net of provisions.
May 2017
May 2016
£’000
£’000
106
37
33
8
-
184
-
-
-
-
59
59
6. Trade and other payables
Trade payables
Amounts owed to group undertakings
Other creditors
Accruals
Current tax
58
58
Oncimmune Holdings Plc | Annual Report Year Ended 31 May 2017Notes to the Financial Statements of the Companyfor the Year Ended 31 May 2017
7. Share capital
Authorised:
Ordinary shares of £0.01 each
Preference shares of £0.01 each
A Preference shares of £0.01 each
Allotted, called up and fully paid:
Ordinary shares of £0.01 each
Preference shares of £0.01 each
8. Employee remuneration
May 2017
May 2016
Shares
57,115,594
-
-
57,115,594
51,024,404
-
51,024,404
£
Shares
571,115
-
-
571,115
510,244
-
510,244
57,115,594
-
-
57,115,594
51,024,404
-
51,024,404
£
571,115
-
-
571,115
510,244
-
510,244
Share based payments expense
Salary, fees, bonuses and other short term emoluments
Social security costs
May 2017
May 2016
£’000
£’000
74
436
44
554
939
-
-
939
5959
STRATEGIC REPORTDIRECTORS’ REPORT FINANCIAL STATEMENTS
Oncimmune Holdings Plc Annual Report
Year Ended 31 May 2017
Company Information
Company registration number
09818395.
Registered office
Clinical Sciences Building
City Hospital
Hucknall Road
Nottingham
NG5 1PB
Website
www.oncimmune.co.uk
Directors
Meinhard Folkert Schmidt
Non-Executive Chairman
Geoffrey Neil Hamilton-Fairley
Chief Executive Officer
Andrew Millet
Chief Financial Officer
Timothy Brian Bunting
Non-Executive Director (Deputy Chairman)
Richard Simon Sharp
Non-Executive Director
Andrew Vaughan Unitt
Non-Executive Director
Julian Clement Hirst
Non-Executive Director
Carsten Schroeder
Non-Executive Director
Secretary
Andrew Millet
60
Nominated Adviser and Broker
Zeus Capital Limited
10 Old Burlington Street
London
W1S 3AG
Legal adviser
Peachey & Co LLP
95 Aldwych
London
WC2B 4JF
Auditor
Grant Thornton UK LLP
Chartered Accountants
Statutory Auditor
Grant Thornton House
202 Silbury Boulevard
Central Milton Keynes
MK9 1LW
Financial PR
Consilium Strategic Communications
41 Lothbury
London
EC2R 7HG
Registrars
Capita Asset Service
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
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