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OptiBiotix Health Plc
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ANNUAL REPORT AND ACCOUNTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Contents
Company Information
Chairman’s Report
Chief Executive’s Statement
Strategic Report
Directors’ Report
Report of the Independent Auditors
Consolidated Statement of
Comprehensive Income
2
3
6
11
16
19
25
Consolidated Statement of
Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Financial Position
Company Statement of
Changes in Equity
26
27
Consolidated Statement of Cash Flows
28
Company Statement of Cash Flows
Notes to the Consolidated
Statements of Cash Flows
Notes to the Company
Statements of Cash Flows
29
Notes to the Financial Statements
30
31
32
33
34
1
OptiBiotix Health Plc
Company Information
Directors: S P O’Hara
R Davidson
M Christie
C Brinsmead
S Hammond
S Kolyda
Secretary: Mark Collingbourne
Registered number: 05880755 (England & Wales)
Registered office: Innovation Centre
Innovation Way
York
YO10 5DG
Auditors: Jeffreys Henry LLP
Finsgate
5-7 Cranwood Street
London
EC1V 9EE
Nominated adviser: Cairn Financial Advisers LLP
9th Floor
107 Cheapside
London
EC2V 6DN
Brokers: Cenkos Securities plc
6-7-8 Tokenhouse Yard
London
EC2R 7AS
Website Address: www.optibiotix.com
Annual Report and Accounts 2021 2
Chairman’s Report
For the year ended 31 December 2021
turnover growth
the year, despite
The Group continued to make
excellent strategic, commercial,
scientific and financial progress
during
the
challenging and uncertain trading
environment created by the global
Covid pandemic. Both the Probiotic
and Prebiotic businesses achieved
and
strong
improved
they
profits,
successfully built sales of the first-
generation ingredients developed by the Group, secured
additional regulatory approvals, and reached new agreements
with larger commercial partners to extend their global reach. Since
the year-end the Group has successfully floated its formerly
wholly-owned probiotic subsidiary, ProBiotix Health plc, as a
separate company to maximise its growth potential and deliver
increased value to Group shareholders, following the model set
by the flotation of SkinBioTherapeutics plc in 2017. The Group’s
financial strength provides it with an excellent platform to
accelerate the commercialisation of first-generation products via
partners and increasingly direct sales to consumers, and take to
market its second-generation technologies which have the
potential for sustained future growth.
as
Results
Group sales for the 12 months ended 31 December 2021 (grew by 45.3%
to £2.2m (2020: £1.5m). Administrative expenses (excluding non-cash
items such as share-based payments and amortisation) increased by
32.4% to £2.1m (2020: £1.6m), largely due to one-off recruitment and
consultancy costs, and investment in strengthening our commercial
management team. Gross profit increased by 27.7% to £1.1m (2020:
£0.9m). Both the Probiotic and Prebiotic divisions, which first achieved
profitability in 2020, delivered substantially increased EBITDA.
The Company received an additional £2.9m (2020: £0.7m) during the
year in proceeds from the sale of shares in SkinBioTherapeutics plc
(SBTX), which is not included in the Group sales figures. As of
31 December 2021, the Company continued to hold 20.8% of the issued
333
OptiBiotix Health Plc
share capital of SBTX, valued at £13.7m (31 December 2020: £8.9m). The
increase in the value of the continuing investment in SBTX resulted in
a Group net profit for the year of £6.3m (2020: £5.8m).
The Group’s financial position remains strong, with total cash on the
balance sheet at the year-end increasing by 122% to £2.0m (2020:
£0.9m). Once R&D tax credits, recoverable VAT, and debtors and creditors
are accounted for the balance is £3.2m (2020: £1.4m).
Strategy
is a
Optibiotix Health
life sciences business founded on the
development of probiotic and prebiotic compounds which modify the
microbiome to tackle obesity, high cholesterol, diabetes, and skincare:
all markets offering strong growth potential in many parts of the world.
Our proven two-stage growth strategy has been to build the brand
presence and early sales of our first-generation products (principally
LPLDL® in Probiotics and SlimBiome® in Prebiotics) through deals with
multiple partners in multiple territories around the world, while at the
same time pursuing the development of our more innovative second-
generation products that offer potentially larger future returns. This
means that our partners cover the marketing and regulatory costs of
entering new markets with new products whilst allowing us to build a
brand presence.
This strategy has been designed with two separate legal entities
(Probiotix Health Ltd and OptiBiotix Ltd) focused on commercialising
products, while the holding company OptiBiotix Health plc acquires and
develops the novel technologies to build the new product pipeline, and
provide the necessary scientific and clinical studies, publications and
regulatory approvals.
We also have a significant shareholding in a third company,
SkinBiotherapeutics plc, which was founded by our group CEO, and has
delivered £4.3m of value to our shareholders through share sales since
its IPO in 2017, and in which we retain a stake valued at £8.4m as at
1 June 2022.
OptiBiotix Health plc
Overview: shareholding and key products
Chairman’s Report (continued)
As we have always stated, this structure gives our shareholders exposure
to multiple opportunities within the emerging microbiome space, and
affords the potential to deliver additional value through separate public
listing of the divisions, as we have accomplished since the beginning
of the new financial year with the flotation of ProBiotix Health plc. This
has allowed ProBiotix Health to raise £2.5m to accelerate the
commercial development of
its products and has given our
shareholders a direct stake in the business through the distribution of
shares. The Company retains a substantial shareholding of 44% in its
former subsidiary, which will in future be accounted for as an associate.
Business development
Among the many positive developments during the year, which the
Chief Executive discusses more fully in his report, I would particularly
like to highlight:
•
•
•
•
the significant strengthening and professionalisation of our
business development and commercial management team, most
notably through the appointment of René Kamminga as CEO of
our Prebiotic business, OptiBiotix Ltd;
the conclusion of major new commercial agreements with
market-leading partners in both the Probiotic and Prebiotic
businesses, moving us towards our goal of having eight to ten
large national or international partners for our first-generation
products, and two to three partners for each of our second-
generation technologies;
the publication of multiple scientific and clinical studies and
industry reports affirming our position as an industry leader in
understanding of the microbiome; and
further regulatory endorsements, including Health Canada
approval of our SlimBiome® weight management product.
The Board and senior management
As noted in the last annual report, we significantly strengthened the
Board through new appointments in the opening months of the
financial year, ensuring that we have the right mix of skills to lead the
Group through the next stage of its strategic development.
Christopher Brinsmead CBE joined the Board as a non-executive director
on 1 January 2021, bringing to us more than 30 years of experience in
the pharmaceutical and healthcare sectors as a senior executive FTSE
350 company director and chairman. Chris was Chairman of
AstraZeneca Pharmaceuticals UK and President of AstraZeneca UK and
Ireland from 2001-2010, and President of the Association of the British
Pharmaceutical Industry (ABPI) from 2008-2010.
Stephen Hammond MP joined the Board as a non-executive director
on 2 March 2021, further complementing our skillset through his
experience of a successful career in fund management and investment
banking with Dresdner Kleinwort Benson and Commerzbank Securities
prior to entering Parliament in 2005, and his subsequent senior roles in
government.
René Kamminga joined us on 6 April 2021 as Chief Executive Officer of
our wholly owned subsidiary OptiBiotix Ltd. We are already seeing the
benefits of his long experience and track record of growing sales of
speciality ingredients and products, and his extensive network of
industry contacts.
Since the year-end we have significantly strengthened our senior
executive team below the main Board, as the Chief Executive reports
below.
Outlook
Following the restructuring of the Group through the successful
flotation of ProBiotix Health plc, we are focused on the development of
our exciting prebiotic business OptiBiotix Ltd, while retaining a
substantial stake in the continuing growth of ProBiotix Health as an
associate.
The three commercial agreements we signed at the end of 2021 with
well-known national and international brands are indicative of the
future direction of the Group as we move to focus on fewer and larger
business partners. This long-planned strategic shift creates the potential
for extending our global reach, enhancing the reputation of our
products and generating substantial volume sales, though it should also
be recognised that these larger partners tend to operate on longer
timescales than the smaller and quicker-to-market enterprises with
which we forged our initial commercial agreements. It also means that
we will receive fewer but much larger orders for our products than in
the past, so that revenues will accrue less evenly through the year, and
our results for future financial periods may reflect such timing
differences.
We have invested substantially in building a stronger professional
commercial management team that is well qualified and equipped to
lead the business in this next phase of its development, as we look to
launch more new products and focus increasingly on selling finished
products direct to consumers, while continuing to develop sales of our
first-generation ingredients to businesses and working to realise the
commercial potential of our development pipeline.
British Retail Consortium accreditation, achieved at the beginning of
the new financial year, demonstrates our compliance with an
internationally recognised food safety standard that will allow us to
greatly accelerate the development and sales of finished products to
consumers through the retail channel.
Annual Report and Accounts 2021 4
Chairman’s Report (continued)
Although the war in Ukraine and global inflationary pressures have
created an undoubtedly challenging trading environment for many
companies including our own, I am confident that we have the right
structure, strategy, management skills, technologies and commercial
partners to deliver growing value for our shareholders and an exciting
long-term future for the Group.
Neil Davidson CBE
Chairman
27 June 2022
5
OptiBiotix Health Plc
Chief Executive’s Report
For the year ended 31 December 2021
OptiBiotix offers investors a unique
opportunity to participate in the
growth potential afforded by one of
the most progressive and exciting
areas of biotechnological research:
the modulation of the human
microbiome. This
is a market
projected to grow at a CAGR of 31%
between 2023 and 2029 (Markets
and Markets, 2022). The Group
innovative
unique
develops
products across multiple areas of the microbiome that are
protected by an extensive and growing international portfolio of
patents and trademark underpinned by strong science and clinical
studies. Products are transferred for commercial exploitation to
trading divisions which have the ability to deliver additional
shareholder value through the achievement of separate listings or
exits. Everything we do is designed to maximise the earning
potential of each of our products while maintaining tight cost
control and limiting investor risk.
STRATEGIC DEVELOPMENT
We are successfully progressing a two-stage strategy that continues to
deliver for our investors as planned. In the first stage of development,
our two independent trading businesses have built a strong recurring
revenue base and achieved profitability through the development of
business-to-business sales of our first-generation functional ingredients:
principally LPLDL® in Probiotics and SlimBiome® in Prebiotics. The Group
has also benefited
in
SkinBioTherapeutics plc (SBTX).
substantially
investment
from our
Our business model has been designed to maximise the income
potential of each of our products while limiting investment risk and
managing costs by securing appropriate business partners in a wide
and growing range of territories.
Having established our scientific and brand credibility through an initial
focus on smaller partners that were able to bring products quickly to
market, we are now able to develop a smaller number of relationships
with larger partners that offer the opportunity both to increase volume
sales in existing markets, and to extend our geographical reach.
As anticipated, the increasing association of our products with
internationally recognised retail and pharmaceutical partners and
established brands (e.g. MyProtein, OptiSlim) has created a virtuous circle
of further interest from other potential partners and markets. As we
engage with an increasing number of larger partners, the Company will
have to manage competing interests for product and territory
exclusivity.
Now we have established a strong financial base and brand credibility
through our business-to-business sales, we are increasing our efforts on
developing higher-margin final product sales, including direct sales to
consumers in strategic markets. This direct sales strategy will have a
mutually beneficial effect in also driving sales of ingredients included in
final products we sell direct to consumers.
Our products continue to gain endorsement from scientific studies,
industry awards and regulatory approvals. We were particularly pleased
that SlimBiome® won first place in the Weight Maintenance Category of
the US Nutrition Industry Executive Awards in 2021 and was approved
as a licensed product with strong health claims for weight management
by Health Canada, which is renowned as one of the world’s most
demanding regulators. We believe these are substantive achievements
for early-stage products.
Following the separate flotation of our Probiotic business as ProBiotix
Health plc in March 2022, we are now strongly placed to focus on the
growth potential of our Prebiotic business, OptiBiotix Ltd, through our
new CEO, René Kamminga. The conclusion of three new commercial
agreements with market-leading partners in the UK, India and Saudi
Arabia at the end of the year have delivered an important extension of
our geographic reach for SlimBiome® in the main markets of Europe and
Asia, while the launch of new lean muscle mass ingredient, LeanBiome®
provides us with a point of entry to the lucrative and fast-growing sports
nutrition market.
After COVID-19 delayed product development we are making good
progress with the commercialisation of our second-generation prebiotic
products: the growing SweetBiotix® family of functional fibres that act
as low calorie, prebiotic sweeteners; and Microbiome Modulators to
target a range of human diseases. These products carry higher
development risks than our first-generation products but address much
larger market opportunities, affording very substantial potential for
future growth in revenues and profits.
FINANCIAL RESULTS
As the Chairman has noted, Group sales for the 12 months ended
31 December 2021 grew by 45.3% to £2.2m (2020: £1.5m), despite
difficult global trading conditions.
The Probiotic business, contained within our wholly owned subsidiary
ProBiotix Health Ltd, increased sales by 34.0% to £1.1m (2020: £0.8m).
However, income for the prior year included a £250,000 milestone
payment for the development of LPLDL® into a pharmaceutical, so that
underlying product sales growth year-on-year was 92.6%. The division
delivered a 104% increase in EBITDA to £179K (2020: £88K).
The Prebiotic business, within our wholly owned subsidiary OptiBiotix
Ltd, increased sales by 59.3% to £1.1m (2020: £0.6m), with underlying
sales (excluding licensing fees) growing by 122%, with an EBITDA of
£13K ( 2020: £36k).
Annual Report and Accounts 2021 6
Chief Executive’s Report (continued)
Group administrative expenses (excluding non-cash items such as
share-based payments and amortisation) increased by 32.4% to £2.1m
(2020: £1.6m), largely due to one-off recruitment and consultancy costs,
and investment in strengthening our management team.
from the sale of shares
As the Chairman has noted, the Company received an additional £2.9m
(2020: £0.7m) during the year
in
SkinBioTherapeutics plc (SBTX), which is not included in the Group sales
figures. As of 31 December 2021, the Company continued to hold 20.8%
of the issued share capital of SBTX, valued at £13.7m ( 2020: £8.9m). The
increase in the value of the continuing investment in SBTX resulted in a
Group net profit for the year of £6.3m (2020: £5.8m).
SBTX continues to make progress commercialising its products. It is
worth noting that our initial investment of approximately £700,000 in
this business in 2016 has delivered £4.3m of value to OptiBiotix
shareholders through share sales to date (a multiple of 6.1 of our initial
investment). If OptiBiotix had raised funds via a placing rather than sold
SBTX shares this would equate to an additional 9.7m shares (11.1%) and
associated shareholder dilution. The Company’s’ continuing interest in
SBTX is valued at approximately £8.4m as of 1 June 2022.
PROBIOTICS: ProBiotix Health plc
The cornerstone of our Probiotic business is LPLDL®, a unique probiotic
for cardiovascular health, the sales of which, either as an ingredient or
final product, grew by 34% during the year, or as direct comparison by
92.6% when excluding the £250K milestone payment received in 2020.
The Group developed the science, carried out human studies to confirm
product safety and efficacy, and protected its commercial interests with
a broad IP portfolio comprising some 36 patents. In line with our
strategy, ProBiotix Health then took responsibility for commercialising
the product by building a supply chain of licensed partners to
manufacture, formulate, and distribute LPLDL® around the world.
By the end of 2021 we had partners commercialising LPLDL® in over
60 countries including the world’s largest probiotic market, the USA, in
partnership with Seed Health. Four new commercial agreements were
concluded in 2021, of which the most significant was the signing in
August of a new agreement with Seed Health expanding its territories
from the US to include Europe, Oceania (Australia, New Zealand etc.)
and Asia (excluding India) for the supply of LPLDL® in Seed’s DS-01 multi-
strain synbiotic product.
We reached new agreements with Compson Biotechnology in Taiwan,
INSCOBEE Inc in South Korea and Bioscience Marketing in Malaysia, all
covering both LPLDL® and our own branded CholBiome® range
containing it, designed to build the reputation and brand awareness of
our own label products across Asia.
We have developed our own unique range of patented and proprietary
food supplements containing LPLDL® under the CholBiome® brand,
comprising CholBiomex3 to reduce cholesterol, CholBiomeBP to lower
blood pressure and CholBiomeVH to promote vascular health. This gives
us a product portfolio which allows us to create different formulations
to allow us to enter international markets around the world. This is
important as regulatory conditions vary widely across the world. For
example, Monacolin K is used extensively across Asia but prohibited in
food supplements in North America and has restricted dosage in
Europe. Our CholBiome® product range has been developed to meet
existing and anticipated regulatory requirements in international
markets.
Actial Farmaceutica Srl, with which we announced an agreement in July
2020 for the distribution of CholBiome® products, is taking longer to
launch products than originally planned due to COVID-19 delays
impacting on regulatory approvals. However, ProBiotix Health hopes to
announce progress on this in the months ahead.
Whilst ProBiotix Health’s focus is on commercialising products into the
supplement and over the counter pharma markets there is potential for
the further development of LPLDL® in drug biotherapeutics. This is a
complex area where regulatory pathways are not fully established,
timescales are long and investment costs and development risks are
high. As such, this is being progressed with partners with the necessary
skills and expertise to take drug products to market who pay milestones
and royalties.
As part of our exploration of potential additional applications for the
product, we announced in January that we are jointly funding a PhD
studentship and clinical study into the role of the microbiome in stress,
anxiety and sleep disorders with the Universities of Southampton and
Trento. We hope to have some early data at the start of 2023.
LPLDL® has been determined as Generally Recognized As Safe (‘GRAS’) by
the US Food and Drug Administration (FDA) and has pharmaceutical
GMP manufacture designation. Post period we began to see the
benefits of achieving GRAS with our partner in Uruguay, Grancha
Poncha, launching a yoghurt, Yo-Life®, with a cholesterol health claim.
This is a significant milestone, as it extends the use of LPLDL® into
functional dairy foods with a health claim which may be replicated in
other territories and other functional foods on a global scale. The launch
follows over two and a half years of product development to ensure the
addition of LPLDL® to yoghurt does not change its taste, texture, or shelf
life, and provides an active dose in milligram amounts and a cost
advantage over stanols or sterols which typically require doses of 2gms.
With the dairy sector accounting for over 85% of the global probiotic
market, we believe that this is an area with potential for significant
future growth.
7
OptiBiotix Health Plc
Chief Executive’s Report (continued)
PREBIOTICS: OptiBiotix Ltd
SweetBiotix®
Our Prebiotic business continues its focus on growing sales of its first-
generation prebiotic weight management ingredient SlimBiome®, and
on continuing to progress the commercialisation of more innovative
second-generation products including SweetBiotix® and Microbiome
Modulators.
SlimBiome®/LeanBIome®
Despite the global slump in the weight-management sales during the
COVID-19 pandemic (Nutritional Outlook, 24, 4) sales of SlimBiome® and
LeanBiome® as an ingredient or final product grew by 122% during the
year, aided by significant new product launches such as THG and range
extensions in the UK and Oceania.
Our established UK partner Holland & Barrett expanded their SlimExpert®
own brand range of weight management products containing
SlimBiome® from three to eight products in March 2021, with the range
now including powdered beverages, shakes and porridge.
In July 2021, Arrotex Pharmaceuticals, Australia’s largest private
pharmaceutical company, launched a Very Low Calorie Diet (VLCD)
weight management product containing SlimBiome®, Bioslim VLCD,
through pharmacies and online across Australia.
Also, in July 2021 our existing customer Optipharm expanded their
portfolio of products containing SlimBiome® with the launch of the
Optiman brand, sold exclusively through the Chemist Warehouse
online pharmacy.
In October 2021 we extended our market reach by entering the sports
nutrition market with LeanBiome® a scientifically formulated sports
nutrition ingredient which supports athletes seeking to increase lean
muscle mass to change their body composition.
In December 2021 we signed a number of significant new commercial
agreements with large partners Apollo Hospitals in India and Nahdi
Medical in Saudi Arabia which extended the geographic reach of the
business and will hopefully lead to important new product launches
in 2022.
In January 2022 The Hut Group’s Myprotein launched the Impact Diet
Lean (IDL) product range containing LeanBiome®, developed to build
lean muscle mass faster. IDL shakes were launched into the main
markets of Europe and Asia during Q1 and will be followed up by
product range extensions throughout the year.
Our second-generation SweetBiotix® family of products is based on the
concept of creating a sweet fibre that has a low glycaemic index, which
enhances the microbiome. The concept uses recent advances in science,
requires new manufacturing processes to be developed, and represents
a step change from existing products on the market or to the best of our
knowledge and partner discussions, known to be under development.
Our aim is to build a broad range of products suitable for a wide range
of application areas which can meet the needs of multiple partners, on
applications as diverse as dairy, cereals, and hot and cold beverages. Each
of these must be assessed in terms of flavour optimisation, stability
(typically 12 months with 24 months preferred), dosage, safety, tolerance,
health benefits, and the final product cost profile.
We are progressing the commercialisation of SweetBiotix® on a number
of fronts. Following the agreement we signed in the second half of 2020,
our US manufacturing partner has successfully manufactured
SweetBiotix® using an industrial scale process and is now optimising
yields and reducing wastage. Our agreement, covering only one part of
the SweetBiotix® portfolio, grants an exclusive licence in return for our
partner making a significant investment to cover all the manufacturing,
marketing and commercialisation costs, while paying annual royalties
to OptiBiotix.
Additionally we are working with one of the world’s leading companies
specialising in taste and sweetness on jointly developing, scaling up and
commercialising another group of SweetBiotix® products. A number of
corporates with leading positions in the food and beverages markets
have also signed Material Transfer Agreements to develop applications
for SweetBiotix®.
Microbiome Modulators
The Company has developed an innovative approach to allow it to
precision engineer the microbiome. This is one of the most exciting
areas of microbiome therapeutics as it creates the potential for targeted
treatment of a range of human diseases. Development work was slowed
by COVID-19 reducing access to Universities and Contract Research
Organisations in 2020 and early 2021. This work has now progressed and
we have achieved the production of Microbiome Modulators using a
process suitable for industrial scale-up. Work is ongoing to optimise the
process and test whether the functionality has been retained before
initiating full scale-up and commercialisation.
This is a really exciting area of development which, if successful, could
revolutionise the use of the microbiome therapies in healthcare,
potentially allowing the creation of precision prebiotics which can
engineer the gut microbiome to prevent, manage and treat human
diseases. We will be increasing our investment in Microbiome
Modulators to accelerate the development activities currently
taking place.
Annual Report and Accounts 2021 8
Chief Executive’s Report (continued)
INTELLECTUAL PROPERTY
PROSPECTS
Our Intellectual Property strategy has been based of building a portfolio
of overlapping patents to protect our commercial interests and reduce
the risk of any particular patents failing to grant or being opposed by a
competitor. This means that we have multiple composition, application,
and process patents to protect each area of our business. Whilst this
approach is more costly, it reduces our future commercial risk. As patents
are granted in key territories (typically the US, Europe, Canada, Japan,
Australia, India) the Group has been able to refine its patent portfolio to
reduce IP costs whilst continuing to protect its commercial interests.
Our strategy and investment have enabled the Group to build an
extensive and valuable intellectual property portfolio of more than
100 patents worldwide: 36 in ProBiotix Health and 73 in OptiBiotix. In
addition to these patents, we have registered approximately over 80
trademarks (21 in ProBiotix Health and 62 in Optibiotix) providing ‘double
IP’ – a combination of patents and supporting trademarks which allows
the Group to build its trademarked brands supported by its patents. This
approach allows the Group to protect its commercial interests and limit
competitors from launching similar products and in combination
creates a valuable IP portfolio in the microbiome field. We are constantly
reviewing and updating our patent and trademark portfolio according
to commercial needs.
MANAGEMENT
As the Chairman has reported, we substantially strengthened our Board
and senior management team through new non-executive and
executive appointments in the early months of the financial year under
review. I am pleased to note that a number of these new senior
colleagues have demonstrated their commitment to the Group, and
their confidence in our future prospects, by making personal
investments in the Company’s shares. It is also pleasing to note that
other members of the Board and senior management team took the
opportunity to invest in OptiBiotix during 2021.
Since the beginning of the new financial year, we have made a number
of senior appointments below the level of the main Board. Paul
Cannings joined us in January 2022 as Head of Operations & Quality,
and in March 2022 we announced the appointments of Zac Sniderman
as Business Development & Sales Director North America, Shiraz Butt as
E-Commerce Director, and Karl Burkitt as Marketing Director. These new
additions will ensure that we continue to meet the quality and
regulatory requirements of our growing network of commercial partners
around the world; maintain our drive to expand ingredient sales,
particularly in the large North American market; and develop the sales
of final products containing our unique ingredients both to businesses
and direct to consumers.
We have continued to make good progress since the beginning of the
current financial year, despite the challenging global trading
environment.
Significant developments in the year to date include:
•
•
•
•
•
The achievement of British Retail Consortium accreditation,
confirming our compliance with the Global Food Safety Initiative
(‘GFSI’) benchmark. This certification by one of the leading
international food safety standards, accepted by most large
retailers and their suppliers worldwide, is an important support to
our commercial strategy of increasing our sales of final product
solutions to partners in the retail channel.
Our entry into the sports nutrition market with the launch of
LeanBiome®, a scientifically supported dietary fibres and a trace
mineral, developed to support athletes increase lean muscle mass
and to improve metabolism, gut health and satiety. Our new
distribution agreement with leading e-commerce retailer The Hut
Group, signed in December 2021, saw LeanBiome® launched in
January 2022 in its Impact Diet Lean product as part of its My
Protein range in the UK, with territorial expansion across Europe,
Asia and the USA planned in the course of the year.
The reformulation of WellBiome®, our functional fibre and mineral
blend, with new ingredients that will allow us to make new health
claims for the products. The new WellBiome® will form the basis
for a science-based health and wellness platform offering a range
of products to improve cognitive, immune, bone, digestive and
cardiovascular health to support healthy ageing.
Publication in January 2022 of a third human volunteer study on
the medical efficacy of LPLDL®, demonstrating through a placebo-
controlled trial that LPLDL® delivered large and statistically
significant reductions in total cholesterol, LDL-C (bad) cholesterol
and Apolipoprotein B (widely accepted as the most important
causal agent of atherosclerotic cardiovascular disease), with no
compliance, tolerance or safety issues. The results of this and other
studies suggest efficacy similar to many statins and other
treatments more typically associated with pharmaceuticals,
suggesting considerable potential in high value pharmaceutical
and OTC markets for the use of LPLDL® in individuals who are
unwilling or unable to tolerate other treatments.
Publication in February 2022 of a consumer study undertaken
among purchasers from our own e-commerce website of
CholBiomex3, our proprietary food supplement containing LPLDL®,
which confirmed its effectiveness in reducing cholesterol with no
reports of side-effects or any tolerance issues.
9
OptiBiotix Health Plc
Chief Executive’s Report (continued)
•
•
•
Admission of ProBiotix Health plc to the AQSE Growth Market on
31 March 2022, raising £2.5m for the further development of our
former Probiotic subsidiary through a placing and subscription of
new shares, while giving our own shareholders a dividend in
specie of 0.554673 ProBiotix share for every OptiBiotix share held.
Good progress in the development of OptiBiotix Health India, the
new subsidiary whose formation we announced in November
2021. This gives us much improved access to a huge, rapidly
growing and increasingly prosperous market of 1.3bn people.
India is expected to account for the majority of the world’s middle-
class consumers by 2035. With high levels of cardiovascular disease
and obesity already prevalent in the country, we see excellent
opportunities
local
manufacturing partners and to develop sales of both ingredients
and higher-margin final products in the years ahead.
improve engagement with our
to
The appointment of Steen Andersen as Chief Executive Officer of
ProBiotix Health plc. This is part of a long-planned strategy to
appoint experienced industry business leaders to each part of the
business allowing me, as Group CEO to focus on identifying and
developing the new technologies that will provide the Group with
a pipeline of products to deliver future growth and market value.
As the Group matures, we are moving on from a period when we
announced very frequent news reports on our progress in developing
the science behind our products and in growing our global network of
relatively small business partners. The focus now is on building our sales
by extending product ranges and territories, gaining regulatory
approvals for health claims, migrating to larger partners, and developing
sales of final products direct to consumers. This will lead to us reporting
less news, but of a more substantive nature. It also means, as the
Chairman has noted, that our future financial results will reflect fewer
but much larger sales to a smaller number of big partners and
consequently revenues reported less evenly through the year.
The strong growth in revenues and profits in 2021 despite the difficult
global environment is testimony to the effectiveness of our strategy. We
continue to make good progress against our stated aims of focusing on
a smaller number of large partners in key strategic markets and grow
our direct-to-consumer sales, the benefits of which we expect to begin
realising in the current year. There is an exciting opportunity for growth
as we bring the second-generation products to market, while we retain
exposure to the growth potential in probiotics and skincare through the
Group’s shareholdings in ProBiotix Health plc and SkinBioTherapeutics
plc.
Our strong financial position has allowed us to invest in expanded sales
and marketing capabilities that will help us to increase our sales of final
products direct to consumers through retail channels. We hope to see
the return on this investment later this year and beyond. It also gives us
the capability to in-license or acquire additional technologies that will
ensure a continuous pipeline of solutions to deliver diversified growth
for the Group and strengthen our position as one of the leading
companies in the rapidly growing microbiome space.
Stephen O’Hara
Chief Executive
27 June 2022
Annual Report and Accounts 2021 10
Strategic Report
For the year ended 31 December 2021
Review Of Business
Financial And Capital Risk Management
The directors constantly monitor the financial risks and uncertainties
facing the Group with particular reference to the exposure of credit risk
and liquidity risk. They are confident that suitable policies are in place
and that all material financial risks have been considered. The financial
risk management objectives and policies can be found within note 23
of the financial statements.
The Board’s objective is to maintain a balance sheet that is both efficient
and delivers long term shareholder value. The Group had cash balances
of £2,007,448 as at 31 December 2021 and had no short-term
borrowings. The Board continues to monitor the balance sheet to ensure
it has an adequate capital structure.
A review of the business of the Group, together with comments on
future developments is given in the Chairman’s and Chief Executive’s
Statements on pages 3 to 10.
Principal Risks And Uncertainties Facing
The Group
Technology and products
The Group is involved in the discovery and development of microbiome
modulation products. The development and commercialisation of its
intellectual property and future products will require human nutritional
studies and there is a risk that products may not perform as expected.
This risk is common to all new products developed for human
consumption.
Technologies used within the food, beverage and healthcare
marketplace are constantly evolving and improving. There is a risk that
the Group’s products may become outdated or their commercial value
decrease as improvements in technology are made and competitors
launch competing products. To mitigate this risk the Group is working
with industry key opinion leaders, will attend international conferences
and intends to develop a research and development department which
will keep up with the latest developments in the industry.
Intellectual Property
The Group is focused on protecting its IP and seeking to avoid infringing
on third parties’ IP. To protect its products, the Group is building and
securing patents to protect its key products. However, there remains the
risk that the Group may face opposition from third parties to patents
that it seeks to have granted and that the outstanding patent
applications are not granted. The Group engages legal advisers to
mitigate the risk of patent infringement and to assist with the protection
of the Group’s IP.
11
OptiBiotix Health Plc
Strategic Report (continued)
Principal Risks And Uncertainties
Market Risks
Impact
Mitigation
Brexit
New regulations could add complexity and delays to
operations.
The current consensus is that Brexit will not affect the
regulations that are relevant to our business.
Currency fluctuations could increase costs and affect
profitability.
COVID-19
The global implications of the economic impact of
COVID-19 could affect sales and profitability
Currency fluctuations will impact both sales and costs. Our
initial product offering is not price-sensitive. Substantial cost
increases will be passed on.
Although COVID-19 has affected some parts of the consumer
business. The majority of sales are in the business to business
sector across many countries so the impact is very limited.
Technology
The Group’s platform is currently unique. Rapid
technological advances could see competitor products
being launched.
The Group has product development plans in place for improved
technology as well as for a wider product portfolio that includes
additional innovative solutions for the targeted consumer groups.
Operational Risks
Impact
Mitigation
Loss of key
personnel
Technology
Commercialisation
Working capital
Material adverse impact on the Group’s financial
condition and prospects.
Competitive remuneration packages, nil cost options to reduce
market volatility
The Group is launching products that are not already
available in the consumer market.
The Group is making the transition from a research-
based organisation to a full commercial organisation.
Manufacturing set-up and learning curve could delay
sales or could impact our rate of growth.
The Group has encouraged customers to build up
material stocks of ingredients to meet user demand
from end user customers. Flexible payment terms have
been given to customers to pay for stock.
If stocks are not used, would they become unusable.
The Group has responded to consumer demand.
The Group
consultants to manage the process and negotiate contracts.
recruited experienced management and
Ingredients have a three-year shelf life risk of non-usability is
reduced.
As end user requirements become formalised and production
time frames for ingredients come down it will be possible for
Group customers to hold less stock of ingredients which will in
turn reduce the debtor balances outstanding at period end.
Cyber attacks
Cyber-attacks could delay or impair operations as which
would have financial implications.
Training, anti-virus software, all users have multifactor
authorisation for accounts, weekly review of attempts
Financial Risks
Impact
Mitigation
Future funding
requirements
Our current funding covers current requirements.
Potential as yet unidentified opportunities may not be
pursued with the existing funding.
Management will analyse major opportunities and present
them in additional business cases when warranted.
Legal Risks
Impact
Mitigation
Intellectual
Property
litigation
Any claim brought against us would detract the
Company from its business.
The Group engages with IP specialists to ensure we have a
strong position. To our knowledge we do not infringe on any
patents.
Annual Report and Accounts 2021 12
Strategic Report (continued)
Key Performance Indicators
Financial
Year to
31 December
2021
£’000
Year to
31 December
2020
£’000
Revenue
Operating Loss
Profit/(Loss) for the period
Cash as at 31 December 2021
2,213 1,523
(1,365) (1,111)
6,261 5,802
865
2,007
During the year to 31 December 2021 the company has achieved a
number of key objectives to build shareholder value, these are laid out
in the CEO report on pages 6 to 10.
Non-financial
The Board recognises the importance of KPI’s in driving appropriate
behaviour and enabling of Group performance. For the year to
31 December 2021 the primary KPI’s were the completion of commercial
agreements and the expansion of the Optibiotic® platform. The Group
intends to review the following non-financial KPI’s going forward:
1. Customer relationships
2.
IP and trademark registrations
3. Service quality and brand awareness
4. Attraction, motivation and retention of employees
Dividends
No dividends can be distributed for the year to 31 December 2021.
Future Developments
Corporate Responsibility
The Board takes regular account of the significance of social,
environmental and ethical matters affecting the Group wherever it
operates. It has developed a specific set of policies on corporate social
responsibility, which seek to protect the interests of all of its stakeholders
through ethical and transparent actions and include an anti-corruption
policy and code of conduct.
Corporate Governance:
The Group is committed to high standards of corporate governance and
seeks to continually evaluate its policies, procedures and structures to
ensure that they are fit for purpose.
In order to protect the interests of its shareholders and other
stakeholders the Board has chosen to adopt the Quoted Companies
Alliance (QCA) Corporate Governance Code for Small and mid-size
Quoted Companies (the “QCA Code”), and the Directors are always
prepared, where practicable, to enter into dialogue with all such parties
to promote a mutual understanding of objectives.
By complying with this code the Company ensured compliance with
the new AIM Rules regarding Corporate Governance introduced
September 2018.
Full details of the Company's policy on Corporate Governance can be
found on the website under:
https://www.optibiotix-ir.com/content/investors/corporate-governance
Composition of the Board of Directors
The Board of Directors is currently comprised of the Chairman, Chief
Executive Officer, the Managing Director Prebiotix division, the Research
and development Director, CEO Probiotix Health Limited an and the
three Non-Executive Directors.
The Chairman’s and Chief Executive Statement on pages 3 to 10 gives
information on the future outlook of the Group.
Role of the Board:
The role of the Board is to agree the Group’s long-term strategy and
direction and to monitor achievement of its business objectives. The
Board meets several times per annum, either by teleconference or in
person. Furthermore, it holds additional meetings as are necessary to
transact ongoing business.
Corporate Governance
Executive Management:
The Group’s current executive team comprises:
S O’Hara Executive Director and CEO; with overall
responsibility for all Group activities.
Dr S Kolyda Executive Director – Research and Development
Director
M Havid-Hansen Executive Director – Probiotix Health Limited
René Kamminga Executive Director – OptiBiotix Limited
13
OptiBiotix Health Plc
Strategic Report (continued)
Board Committees:
Remuneration Committee
The Remuneration Committee is made up of Chris Brinsmead, as
Chairman with Neil Davidson and Sean Christie and has access to
external expertise should that be required. This committee is responsible
for the scale and structure of the remuneration of the Chief Executive,
the Executive Directors and reports to the Chief Executive. The
recommendations of the committee must be approved by the Board
of Directors. No director or manager shall be involved in decisions
relating to his/her own remuneration.
AIM Rules Compliance Committee
The AIM Rules Compliance Committee is chaired by Neil Davidson. This
committee is charged with ensuring that the Group has sufficient
procedures, resources and controls in place to ensure compliance with
the AIM rules for companies. Among other things, the committee shall
ensure that an Executive Director is at all times able to respond to
requests for information from the Nominated Adviser and that all
Directors and employees are aware of their obligations with regards to
the disclosure of any trading in the Group’s shares.
Audit Committee
The Audit Committee, is chaired by Sean Christie with Neil Davidson and
Chris Brinsmead. This committee is required to monitor the integrity of
the financial statements of the Group, including the interim and annual
reports. The committee also reviews financial returns to regulators and
any financial information contained in announcements of a price
sensitive nature. The committee shall also consider and make
recommendations to the Board regarding resolutions to be put to
shareholders for approval at the Annual General Meeting, with respect
to the appointment or re-appointment of the Group’s external auditors.
The Audit Committee, together with the external auditors, are
responsible for determining the scope of the annual audit.
Nomination Committee
The Company does not currently have a nomination committee as the
Board does not consider it appropriate to establish such a committee
at this stage of the Company's development. Decisions which would
usually be taken by the nomination committee will be taken by the
Board as a whole.
Employees
The Group engages its employees in all aspects of the business and
seeks to remunerate them fairly. The Group gives full and fair
consideration to applications for employment regardless of age, gender,
colour, ethnicity, disability, nationality, religious beliefs or sexual
orientation. The Board takes employees’ interest into account when
making decisions. Any suggestions from employees aimed at improving
the Group’s performance are welcomed.
Suppliers and Contractors
The Group recognises that the goodwill of its contractors, consultants
and suppliers is crucial to the success of its business, and seeks to build
and maintain this goodwill through fair and transparent business
practices. The Group aims to settle genuine liabilities in accordance with
contractual obligations.
Health and Safety
The Board recognises that it has a responsibility to provide strategic
leadership and direction in the development and maintenance of the
Group’s health and safety strategy, in order to protect all of its stakeholders
Section 172 Statement
Under s172 of the Companies Act 2006 the Directors have a duty to act
in good faith in a way that is most likely to promote the success of the
Company for the benefit of its members as a whole, having regard to
the likely consequences of decisions for the long term, the interests of
the Company’s employees, the need to foster relationships with other
key stakeholders, the impact on the community and the environment,
maintaining a reputation for high standards of business conduct, and
the need to act fairly as between members of the Company.
Key decisions made by the Board during 2021 were related primarily to
• the significant strengthening and professionalisation of our
business development and commercial management team, most
notably through the appointment of René Kamminga as CEO of
our Prebiotic business, Optibiotix Ltd,
• the conclusion of major new commercial agreements with
market-leading partners in both the Probiotic and Prebiotic
businesses, moving us towards our goal of having eight to ten large
national or international partners for our first-generation products,
and two to three partners for each of our second-generation
technologies;
• the publication of multiple scientific and clinical studies and
industry reports affirming our position as an industry leader in
understanding of the microbiome;
• further regulatory endorsements,
including Health Canada
approval of our SlimBiome® weight management product.
• As well as ensuring the Group had sufficient cash runway to meet
the slowdown associated with the pandemic.
During the year, the Group augmented the cash balance by
raising £2,900,936 via the partial disposal of
in
SkinBioTherapeutics plc.
it’s holdings
Annual Report and Accounts 2021 14
Strategic Report (continued)
Employee engagement
As a very small company in terms of staff, Board members have multiple
points of contact with staff; through Board meeting feedback,
participation in regular management meetings involving all staff, and
ad hoc interactions in relation to specific matters. These forums provide
staff with an opportunity to give their views which can then be taken
into account in making decisions likely to affect their interests. Specific
matters of concern to them as employees are dealt with in management
meetings and by email. Corporate developments and Company
performance are discussed in regular management meetings. All staff
are eligible for the Group’s share option scheme and this encourages
involvement in the Company’s performance.
Stakeholder Engagement
The Group has a small number of major suppliers and distributors that
support its delivery of strategy and corporate goals. The selection of,
relationships with, and execution of, contracted work by these parties
is considered regularly by the Executive Directors and at each Board
meeting by all Directors.
Shareholder Engagement
Due to the ongoing effects of the COVID-19 pandemic, face-to-face
engagement with shareholders during the year was limited. However,
the Directors continued to engage with shareholders via regular
regulatory news announcements as well as interactive investor
meetings in order to keep them up to date on progress.
Environmental and Community Impact
There was no adverse impact on the community or environment from
the decisions made by the Board during the year.
On Behalf Of The Board
S P O’Hara
27 June 2022
15
OptiBiotix Health Plc
Directors’ Report
For the year ended 31 December 2021
The Directors present their report and the audited financial statements
of the group for the year to 31 December 2021.
Principal Activity
The principal activity of the group is that of identifying and developing
microbial strains, compounds and formulations for use in food
ingredients, supplements and active compounds that can impact on
human physiology, deriving potential health benefits.
Directors
The directors who served the company during the year and up to the
date of this report were as follows:
Executive Directors
S P O’Hara
S Kolyda
F Narbel (Resigned 26 May 2021)
Non-executive Directors
P Wennstrom (Resigned 1 January 2021)
R Davidson
M Christie
C Brinsmead (Appointed 1 January 2021)
S Hammond (Appointed 2 March 2021)
Directors’ Remuneration
The directors are entitled to receive relevant fees, as detailed in the
directors’ remuneration in Note 4.
Directors and their interests
The directors of the group held the following beneficial interests in the
shares and share options of Optibiotix at the date of this report:
Issued Share Capital
Share Warrants
Share Options
Ordinary
shares of
£0.02 each
10,212,986
503,000
150,000
–
–
–
50,000
Percentage
Held
Ordinary
shares of
£0.02 each
Warrant
exercise
price
Ordinary
shares of
£0.02 each
Option
exercise
price
11.60%
0.57%
0.17%
–
–
–
0.06%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6,099,135
385,000
100,000
165,000
358,722
–
–
£0.08
£0.73
£0.95
£0.73
£0.20
–
–
S P O’Hara
R Davidson
M Christie
S Kolyda
S Kolyda
C Brinsmead
S Hammond
The share options held by S P O’Hara were granted on 17 September 2016 and are exercisable at £0.08 at any time up 16 September 2024, subject
to vesting conditions.
The share options held by R Davidson were granted on 13 July 2018 and are exercisable at £0.73 at any time up 13 July 2024, subject to vesting
conditions.
The share options held by M Christie were granted on 21 September 2018 and are exercisable at £0.95 at any time up 21 September 2028, subject
to vesting conditions.
The 358,772 share options held by S Kolyda were granted on 10 March 2015 and are exercisable at £0.20 at any time up 10 March 2025, subject to
vesting conditions.
The 165,000 share options held by S Kolyda were granted on 13 September 2018 and are exercisable at £0.73 at any time up 13 September 2019,
subject to vesting conditions.
Annual Report and Accounts 2021 16
Directors’ Report (continued)
Substantial Shareholdings
Substantial shareholdings include directors as at 27 June 2022 were as
follows:
After making enquiries, the directors have a reasonable expectation that
the Group has adequate resources to continue in operational existence
for the foreseeable future. Accordingly, they continue to adopt a going
concern basis in preparing the annual report and financial statements.
Stephen O’Hara
Finance Yorkshire Seedcorn LP
% of shares issued
11.6
10.7
The share price per share at 31/12/2021 was £0.46 (31/12/2020:
£0.58)
Financial Instruments
The Group’s exposure to financial risk is set out in note 24 to the financial
statements.
Research And Development
The Chairman’s and Chief Executive Statement on pages 3 to 10 gives
information on the Group’s research and development activities.
Events After The Reporting Period
Refer to Note 25 to the financial statements for further details.
Publication Of Accounts On Group
Website
Financial statements are published on the Group’s website. The
maintenance and integrity of the website is the responsibility of the
Directors. The Directors’ responsibilities also extend to the financial
statements contained therein.
Going Concern
The financial statements have been prepared on the assumption that
the Group is a going concern. When assessing the foreseeable future,
the Directors have looked at the budget for the next 12 months from
the date of this report, the cash at bank available as at the date of
approval of this report and are satisfied that the Group should be able
to cover its quoted maintenance cost, other administrative expenses, as
well as its ongoing research and development expenditure.
Management have not seen a material disruption to the business as a
result of the COVID-19 outbreak, however events are being kept under
constant review, and remedial action will be taken if the situation
demands it.
Statement Of Directors’ Responsibilities
The Directors are responsible for preparing the Directors’ Report and the
financial statements in accordance with applicable laws and regulations.
Company law requires the directors to prepare financial statements for
each financial period. Under that law the directors have, as required by
the AIM Rules for Companies of the London Stock Exchange, elected to
prepare financial statements
in accordance with UK adopted
international accounting standards (IFRS). Under company law the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the
Group and of the profit or loss of the Group for that period. In preparing
these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently.
• make judgements and estimates that are reasonable and prudent.
• state whether the Group and parent company financial statements
have been prepared in accordance with IFRS subject to any material
departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis, unless
it is inappropriate to presume that the Company will continue in
business.
The Directors confirm that the financial statements comply with the
above requirements.
The Directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Group’s transactions and
disclose with reasonable accuracy at any time the financial position of
the Company and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Group and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
17
17 OptiBiotix Health Plc
OptiBiotix Health Plc
Directors’ Report (continued)
Statement As To Disclosure Of
Information To Auditors
So far as the Directors are aware, there is no relevant audit information
(as defined by Section 418 of the Companies Act 2006) of which the
Group’s auditor is unaware, and each Director has taken all the steps that
he ought to have taken as a Director in order to make himself aware of
any relevant audit information and to establish that the Group’s auditor
is aware of the information.
Auditor
Jeffreys Henry LLP will be proposed for re-appointment as auditors at
the forthcoming Annual General Meeting.
Strategic Report
In accordance with section 414C(11) of the Companies Act 2006 the
Group chooses to report the future outlook and the risks and
uncertainties faced by the Group in the Strategic Report on page 14.
On Behalf Of The Board
S P O’Hara
27 June 2022
Annual Report and Accounts 2021 18
Independent Auditor’s Report to the Members of
OptiBiotix Health Plc
For the year ended 31 December 2021
Opinion
We have audited the financial statements of Optibiotix Health Plc (the
‘parent company’) and its subsidiaries (the ‘Group’) for the year ended
31 December 2021 which comprise the consolidated statement of
comprehensive income, consolidated statement of financial position,
consolidated statement of changes in equity, consolidated statement
of cash flows, company statement of financial position, company
statement of changes in equity, company statement of cash flows and
notes to the financial statements, including a summary of significant
accounting policies. The financial reporting framework that has been
applied in the preparation of the Group financial statements is
applicable law and United Kingdom adopted International Accounting
Standards (IFRSs) as applied in accordance with the provision of the
Companies Act 2006.
In our opinion:
• the financial statements give a true and fair view of the state of the
Group’s and of the parent company’s affairs as at 31 December 2021
and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in
accordance with IFRSs;
• the parent company financial statements have been properly
prepared in accordance with IFRS’s as applied in accordance with
the provisions of the Companies Act 2006; and
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the group's ability to
continue as a going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect
to going concern are described in the relevant sections of this report.
Our approach to the audit
As part of designing our audit, we determined materiality and assessed
the risks of material misstatement in the financial statements. In
particular, we looked at where the directors made subjective judgments,
for example in respect of significant accounting estimates that involved
making assumptions and considering future events that are inherently
uncertain. As in all of our audits we also addressed the risk of
management override of internal controls, including evaluating whether
there was evidence of bias by the directors that represented a risk of
material misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough
work to be able to give an opinion on the financial statements as a
whole, taking into account the structure of the Group and the Company,
the accounting processes and controls, and the industry in which they
operate.
• the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
The Group financial statements are a consolidation of 4 reporting units,
comprising the Group’s operating businesses and holding companies.
Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for
the audit of the financial statements section of our report. We are
independent of the company in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed entities, and we
have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
director's use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of
the directors’ assessment of the entity’s ability to continue to adopt the
going concern basis of accounting included reviews of expected cash
flows for a period of 12 months, to determine expected cash burn,
which was compared to the liquid assets held in the entity.
19
OptiBiotix Health Plc
We performed audits of the complete financial information of Optibiotix
Health plc, Optibiotix Limited, Probiotix Health Limited and The Healthy
Weight Loss Company Limited reporting units, which were individually
financially significant and accounted for 100% of the Group’s revenue
and 100% of the Group’s absolute profit before tax (i.e. the sum of the
numerical values without regard to whether they were profits or losses
for the relevant reporting units). The Group engagement team
performed all audit procedures.
Key audit matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the financial statements of the
current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including
those which had the greatest effect on: the overall audit strategy, the
allocation of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Independent Auditor’s Report to the Members
of OptiBiotix Health Plc (continued)
Key audit matter
How our audit addressed the key audit matter
Carrying value of investments and recoverability of group
receivables – Company risk
The amount owed to the Company at the year end by the
subsidiary Optibiotix Limited was written off in the year (£932k).
The amount owed by Probiotix Health Limited was £318k.
The carrying values of investments in group companies was as
follows:
Optibiotix Limited: £2,000,000
Probiotix Health Limited: £1,000
The Healthy Weight Loss Company Limited: £50,000
Carrying value of investments – Group risk
At the year end the group had investments of £13.65m made up of
the investment in SkinBiotherapeutics plc.
There is a risk that the investment in Skinbiotherapeutics PLC
requires impairment.
Carrying value of intangible assets and capitalisation of
development costs
The Group had intangible assets of £2.64m at the period ended
31 December 2021, of which £194k is in relation to development
costs capitalised in the year.
Intangible assets comprise of development costs and fair value of
patents acquired on the acquisition of Optibiotix Limited.
The patents are amortised in a straight line over 20 years, the
period in which the directors believe the assets will generate
revenue.
The development costs are amortised in a straight line over
10 years, a period the directors believe to be in line with industry
standard.
We carried out a review of the investments held in the subsidiaries.
Management’s
underlying assumptions audited.
impairment workings were reviewed and the
We reviewed management’s basis for impairment across the Company
and agree with their approach.
As part of the review of management’s forecasts, consideration was
given to the capability of the subsidiary to repay the amount within a
12-month period.
The estimation of the residual value held in The Healthy Weight Loss
Company Limited has been assessed.
Following derecognition as an associate the investment was revalued
to market value. This was agreed to open market information.
Intangible assets in the accounts have been allocated useful lives and
therefore an annual impairment test is not required. We considered if
there were indicators of impairment and reviewed the discounted cash
flow forecasts.
The development costs capitalised in the period were evaluated
against the recognition criteria of IAS38.
The estimated useful economic life assigned to the costs was reviewed.
Recoverability of trade receivables
The group had trade receivables amounting to £1,413,882 as
receivable as at the year end.
We reviewed post year end receipts to ensure debtors were recovered
satisfactorily.
There is a risk that these are not fully recoverable and require
impairment.
Where amounts were not recovered we reviewed other support and
correspondence to ensure the existence of the debtor and to assess
the likelihood of recovery.
We further challenged management and sought corroborative
evidence where amounts were considered due and not fully
recovered.
Annual Report and Accounts 2021 20
Independent Auditor’s Report to the Members
of OptiBiotix Health Plc (continued)
Key audit matter
Revenue recognition
The Group has multiple revenue streams comprising sales of goods,
licensing agreements and royalty arrangements, including ongoing
and milestone payments.
The recognition of revenue of these items is determined by the terms
of agreement with customers and as such is widely varied.
We identified a risk of inaccurate or incomplete recognition of revenue
due to the incorrect allocation of milestones to service contracts, and
an inappropriate recognition of revenue on sales of goods for which
revenue is recognised over time.
The assumptions and judgements made in estimating the percentage
of completion require a significant degree of management
judgement and are susceptible to management override and
represent a fraud risk.
How our audit addressed the key audit matter
We have performed the following audit procedures:
• assessed the appropriateness of the Group’s revenue recognition
accounting policies;
• reviewed key contracts with customers and tested that the Group
has correctly accounted for the revenue arising from these
contracts in accordance with the accounting policies;
• performed detailed testing on individually significant contracts,
including substantiating a sample of transactions with underlying
documents;
• evaluated whether revenue has been appropriately presented and
disclosed in the financial statements.
Based on the audit work performed, we are satisfied that management
have appropriately accounted for revenue in line with their accounting
policy and in accordance with the requirements of IFRS 15. We are also
satisfied that all necessary disclosure have been made in the
consolidated financial statements.
Going Concern
Management judgement is required in assessing whether the group
is a going concern as it has historically incurred losses and does not
have borrowing facilities.
The Directors have considered the cash requirements of the business
for the following 12 months. As part of this process, they have taken
into account existing liabilities, along with detailed operating cashflow
requirements. The projections prepared include ongoing running
costs of the group and committed expenditure at the date of
approving the financial statements.
We have performed the following audit procedures:
• obtained management’s forecasts and cash flow analysis, and their
going concern assessment;
• assessed the reliability of forecasts to date by agreeing historical
actuals to budgets, and challenging the current forecasts;
• tested the clerical accuracy of management’s forecast;
• challenged management’s forecast assumptions, including reviewing
the forecast revenue and corroborated the assumptions; and
The key assumptions that impact the conclusions are the levels of
future revenue, and the ability to control the operating costs.
• considered the appropriateness of the group’s disclosures in
relation to going concern in the financial statements.
There are therefore inherent risks that the forecasts may overstate
future revenue due to the timing of closure of future contracts, or
understate future costs, and that the group will not be able to operate
within its cash resources and continue to operate as a going concern.
As detailed above, we note that there are inherent risks over the
group’s forecasts and the potential timing of the conversion of the
group’s contract pipeline. We further note that the group has
historically been loss making given the level of research and
development expenditure.
Based on the audit work performed we are satisfied that although
there are inherent uncertainties associated with the forecast, the group
appears to have sufficient funds for at least 12 months following the
signing of this audit report. We are also satisfied that all necessary
disclosures have been made in the consolidated financial statements.
21
OptiBiotix Health Plc
Independent Auditor’s Report to the Members
of OptiBiotix Health Plc (continued)
Our application of materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial
statements as a whole.
Based on our professional judgment, we determined materiality for the financial statements as a whole as follows:
Group financial statements
Company financial statements
Overall materiality
£202,000 (2020: £206,000)
£178,000 (2020: £120,000)
How we determined it
1% of gross assets
(2020: 1.5% gross assets)
1% of gross assets
(2020: 1% gross assets)
Rationale for
benchmark applied
We believe that gross assets is a primary measure
the
used by
performance of the Group, whilst the subsidiaries
are in varied states of development and trading.
in assessing
shareholders
shareholders
We believe that gross assets is a primary measure
the
used by
performance of the Company, given that it is
largely a holding company for the trading
subsidiaries.
in assessing
For each component in the scope of our Group audit, we allocated a
materiality that is less than our overall Group materiality. This figure was
£27,000.
We agreed with the Audit Committee that we would report to them
misstatements identified during our audit above £10,100 for the Group
(2020: £10,650) and £8,900 for the Parent (2020: £6,000) as well as
misstatements below those amounts that, in our view, warranted
reporting for qualitative reasons.
Other information
The directors are responsible for the other information. The other
information comprises the information included in the annual report,
other than the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether there is a material misstatement in the financial
statements or a material misstatement of the other information. If, based
on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that
fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by
the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report
for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to
report by exception
In the light of the knowledge and understanding of the group and
parent company and its environment obtained in the course of the
audit, we have not identified material misstatements in the strategic
report or the directors’ report.
Annual Report and Accounts 2021 22
Independent Auditor’s Report to the Members
of OptiBiotix Health Plc (continued)
We have nothing to report in respect of the following matters in relation
to which the Companies Act 2006 requires us to report to you if, in our
opinion:
The extent to which the audit was
considered capable of detecting
irregularities including fraud
• 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
we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set
out on page 17, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the group’s and parent company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company or
to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of
the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these
financial statements.
Our approach to identifying and assessing the risks of material
misstatement
including fraud and
non-compliance with laws and regulations, was as follows:
in respect of
irregularities,
• the senior statutory auditor ensured the engagement team
collectively had the appropriate competence, capabilities and skills;
• to identify or recognise non-compliance with applicable laws and
regulations;
• we focused on specific laws and regulations which we considered
may have a direct material effect on the financial statements or the
operations of the company.
• we assessed the extent of compliance with the laws and regulations
identified above through making enquiries of management and
inspecting legal correspondence; and
• identified laws and regulations were communicated within the
audit team regularly and the team remained alert to instances of
non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to
material misstatement, including obtaining an understanding of how
fraud might occur, by:
• making enquiries of management as to where they considered
there was susceptibility to fraud, their knowledge of actual,
suspected and alleged fraud;
• considering the internal controls in place to mitigate risks of fraud
and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of
controls, we:
• performed analytical procedures to identify any unusual or
unexpected relationships;
• tested journal entries to identify unusual transactions;
• assessed whether
in
determining the accounting estimates set out in Note 1 were
indicative of potential bias;
judgements and assumptions made
Irregularities, including fraud, are instances of non-compliance with laws
and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud is detailed below.
• investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws
and regulations, we designed procedures which included, but were not
limited to:
• agreeing financial statement disclosures to underlying supporting
documentation;
23
OptiBiotix Health Plc
Independent Auditor’s Report to the Members
of OptiBiotix Health Plc (continued)
• reading the minutes of meetings of those charged with governance;
Use of this report
• enquiring of management as to actual and potential litigation and
claims;
• obtaining confirmation of compliance from the company’s legal
advisors.
There are inherent limitations in our audit procedures described above.
The more removed that laws and regulations are from financial
transactions, the less likely it is that we would become aware of non-
compliance. Auditing standards also limit the audit procedures required
to identify non-compliance with laws and regulations to enquiry of the
directors and other management and the inspection of regulatory and
legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect
than those that arise from error as they may involve deliberate
concealment or collusion.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of
our auditor’s report.
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.
Sachin Ramaiya
(Senior Statutory Auditor)
For and on behalf of
Jeffreys Henry LLP, Statutory Auditor
Finsgate
5-7 Cranwood Street
London
EC1V 9EE
Other matters which we are required to
address
27 June 2022
We were reappointed as auditors by the company at the Annual General
Meeting to audit the financial statements for the year ending 31
December 2021. Our total uninterrupted period of engagement is 8
years, covering the periods ending 30 November 2014 to 31 December
2021.
The non-audit services prohibited by the FRC’s Ethical Standard were
not provided to the group or the parent company and we remain
independent of the group and the parent company in conducting our
audit.
In addition to the audit, the firm provides tax compliance services to
Optibiotix Health Plc and its subsidiaries.
Our audit opinion is consistent with the additional report to the audit
committee.
Annual Report and Accounts 2021 24
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
Notes
Year ended
31 December 2021
£
Year ended
31 December 2020
£
2,212,932 1,523,247
(1,089,589) (643,428)
1,123,343 879,819
(60,288) (127,248)
(288,455) (247,895)
(2,139,915) (1,616,069)
(2,488,657) (1,991,212)
(1,365,314) (1,111,393)
(47,600) (44,954)
122 98
(47,478) (44,856)
– (303,448)
– 4,165,223
7,500,681 2,955,739
88,618 48,967
6,176,507 5,710,232
84,523 91,635
6,261,030 5,801,867
– –
6,261,030 5,801,867
6,261,030 5,801,867
–
–
6,261,030
5,801,867
7.15p 6.65p
6.55p 6.07p
6
5
5
11
11
11
11
7
8
Revenue from contracts with customers
Cost of sales
Gross Profit
Share based payments
Depreciation and amortisation
Other administrative costs
Total administrative expenses
Operating loss
Finance cost
Finance income
Share of loss from associate
Gain on disposal of an associate
Gain on investments
Profit on disposal of investments
Profit/(Loss) before tax
Corporation tax
Profit/(Loss)for the period
Other comprehensive income
Total comprehensive income for the period
Total comprehensive income attributable to:
Owners of the company
Non-controlling interests
Earnings per share from continued operations
Basic profit/(loss) per share – pence
Diluted profit/(loss) per share – pence
All activities relate to continuing operations
The notes on pages 34 to 54 form part of these financial statements
25
OptiBiotix Health Plc
Consolidated Statement of Financial Position
As at 31 December 2021
ASSETS
Non-current assets
Intangibles
Investments
CURRENT ASSETS
Inventories
Trade and other receivables
Current tax asset
Cash and cash equivalents
TOTAL ASSETS
EQUITY
Shareholders’ Equity
Called up share capital
Share premium
Share based payment reserve
Merger relief reserve
Convertible debt – reserve
Retained Earnings
Non-controlling interest
Total Equity
LIABILITIES
Current liabilities
Trade and other payables
Non-current liabilities
Deferred tax liability
Convertible loan notes
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
Notes
As at
31 December 2021
£
As at
31 December 2020
£
9
11
12
13
7
14
15
16
16
16
16
16
16
17
18
19
2,640,672
13,650,927
16,291,599
101,877
1,552,490
191,249
2,007,448
3,853,064
20,144,663
1,758,812
2,537,501
927,595
1,500,000
92,712
11,319,998
35,782
18,172,400
600,904
600,904
552,000
819,359
1,371,359
1,972,263
20,144,663
2,735,621
8,962,564
11,698,185
184,236
645,823
310,435
864,680
2,005,174
13,703,359
1,758,812
2,537,501
867,307
1,500,000
92,712
5,058,968
35,782
11,851,082
518,995
518,995
561,523
771,759
1,333,282
1,852,277
13,703,359
These financial statements were approved and authorised for issue by the Board of Directors on 27 June 2022 and were signed on
its behalf by:
S P O’Hara
Director
Company Registration no. 05880755
The notes on pages 34 to 54 form part of these financial statement
Annual Report and Accounts 2021 26
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Share-
Non- Convertible Merger based
Called up Retained Share Controlling Debt Relief Payment
Share capital Earnings Premium interest Reserve Reserve reserve
£ £ £ £ £ £ £
Balance at 31 December 2019 1,708,811 (742,899) 1,646,873 35,782 92,712 1,500,000 740,059
Profit for the year – 5,801,867 – – – – –
Issues of shares during the year 50,001 – 950,003 – – – –
Share issue costs – – (59,375) – – – –
Share options and warrants – – – – – – 127,248
Total
equity
£
4,981,338
5,801,867
1,000,004
(59,375)
127,248
Balance at 31 December 2020 1,758,812 5,058,968 2,537,501 35,782 92,712 1,500,000 867,307 11,851,082
6,261,030
Profit for the year – 6,261,030 – – – – –
60,288
Share options and warrants – – – – – – 60,288
Balance at 31 December 2021 1,758,812 11,319,998 2,537,501 35,782 92,712 1,500,000 927,595 18,172,400
The notes on pages 34 to 54 form part of these financial statements
27
OptiBiotix Health Plc
Consolidated Statement of Cash Flows
For the year ended 31 December 2021
Cash flows from operating activities
Cash utilised by operations
Tax received
Interest received
Net cash outflow from operating activities
Cash flows from investing activities
Purchase of intangible assets
Net cash outflow from investing activities
Cash flows from financing activities
Share issues
Disposal of investments
Net cash inflow from financing activities
Increase/(decrease) in cash and equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
The notes on pages 34 to 54 form part of these financial statements
Notes
Year ended
31 December 2021
£
Year ended
31 December 2020
£
1
2
(1,759,446)
194,664
121
(1,564,661)
(193,506)
(193,506)
–
2,900,936
2,900,936
1,142,769
864,680
2,007,448
(928,061)
–
98
(927,963)
(350,345)
(350,345)
940,629
746,751
1,687,380
409,072
455,608
864,680
Annual Report and Accounts 2021 28
Notes to the Consolidated Statement of Cash Flows
For the year ended 31 December 2021
1. Reconciliation of loss before income tax to cash outflow from operations
Year ended
31 December
2021
£
Year ended
31 December
2020
£
Operating loss (1,365,314)
Decrease/(Increase) in inventories 82,359
(Increase) in trade and other receivables (900,666)
Increase/ (Decrease) in trade and other payables 81,910
Depreciation charge –
Share Option expense 60,288
Amortisation of patents and development costs 288,455
Net forex differences (478)
Net cash outflow from operations (1,759,446)
(1,111,393)
(121,475)
(37,190)
(42,630)
393
127,248
247,502
9,484
(928,061)
2. Cash and Cash Equivalents
Cash and cash equivalents
The notes on pages 34 to 54 form part of these financial statements
Year ended
31 December
2021
£
2,007,448
Year ended
31 December
2020
£
864,680
29
OptiBiotix Health Plc
Company Statement of Financial Position
As at 31 December 2021
ASSETS
Non-current assets
Investments
Other receivables
CURRENT ASSETS
Trade and other receivables
Cash and cash equivalents
TOTAL ASSETS
EQUITY
Shareholders’ Equity
Called up share capital
Share premium
Merger relief reserve
Share based payment reserve
Accumulated profit
Total Equity
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
As at
31 December 2021
£
As at
31 December 2020
£
Notes
11
13
13
13
15
16
16
16
16
17
15,731,832
318,127
16,049,959
65,900
1,705,291
1,771,191
17,821,150
1,758,812
2,537,501
1,500,000
927,595
11,055,990
17,779,898
11,043,469
329,057
11,372,526
89,420
532,769
622,189
11,994,715
1,758,812
2,537,501
1,500,000
867,307
5,268,171
11,931,791
41,252
41,252
62,924
62,924
17,821,150
11,994,715
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the parent Company
income statement account.
The profit for the parent Company for the year was £5,787,819 (2020: Loss £1,168,767).
These financial statements were approved and authorised for issue by the Board of Directors on 27 June 2022 and were signed on
its behalf by:
S P O’Hara
Director
Company Registration no. 05880755
The notes on pages 34 to 54 form part of these financial statements
Annual Report and Accounts 2021 30
Company Statement of Changes in Equity
For the year ended 31 December 2021
Called up
Share
capital
£
Retained
Earnings
£
Share
Premium
£
Merger Share-based
Payment
reserve
£
Relief
Reserve
£
Total
equity
£
Balance at 31 December 2019
1,708,811
6,436,938
1,646,873
1,500,000
740,059 12,032,681
Loss for the year
Issues of shares during the year
Financing costs
Share options and warrants
–
(1,168,767)
–
50,001
–
–
–
–
–
950,003
(59,375)
–
–
–
–
–
– (1,168,767)
–
–
1,000,004
(59,375)
127,248
127,248
Balance at 31 December 2020
1,758,812
5,268,171
2,537,501
1,500,000
867,307 11,931,791
Profit for the year
Share options and warrants
–
–
5,787,819
–
–
–
–
–
–
5,787,819
60,288
60,288
Balance at 31 December 2021
1,758,812
11,055,990
2,537,501
1,500,000
927,595 17,779,898
The notes on pages 34 to 54 form part of these financial statements
31
OptiBiotix Health Plc
Company Statement of Cash Flows
For the year ended 31 December 2021
Cash flows from operating activities
Cash utilised by operations
Interest received
Net cash outflow from operating activities
Cash flows from financing activities
Net amounts to subsidiaries
Share issues
Proceeds from disposal of investments
Net cash inflow from financing activities
Increase/(decrease) in cash and equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
The notes on pages 34 to 54 form part of these financial statements
Year ended
31 December 2021
£
Year ended
31 December 2020
£
Notes
1
2
(1,754,689)
–
(1,754,689)
26,275
–
2,900,936
2,927,211
1,172,522
532,769
1,705,291
(369,036)
46
(368,990)
(924,864)
940,629
746,751
762,516
393,526
139,243
532,769
Annual Report and Accounts 2021 32
Notes to the Company Statement of Cash Flows
For the year ended 31 December 2021
1. Reconciliation of loss before income tax to cash generated from operations
Operating (loss)/Profit
Increase/(Decrease) in trade and other receivables
Loan Write off
(Decrease)/Increase in trade and other payables
Share Option expense
Net cash outflow from operations
2. Cash and Cash Equivalents
Cash and cash equivalents
The notes on pages 34 to 54 form part of these financial statements
Year ended
31 December 2021
£
Year ended
31 December 2020
£
(2,748,727)
23,521
931,903
(21,673)
60,287
(1,754,689)
(6,760,976)
(64,713)
6,301,667
27,738
127,248
(369,036)
As at
31 December 2021
£
1,705,291
As at
31 December 2020
£
532,769
33
OptiBiotix Health Plc
Notes to the Financial Statements
For the year ended 31 December 2021
1. General Information
OptiBiotix Health plc is a Public Limited Company incorporated and domiciled in England and Wales. Details of the registered office,
the officers and advisers to the Company are presented on the company information page at the start of this report. The Company's
offices are at Innovation centre, Innovation Way, Heslington, York. The Company is listed on the AIM market of the London Stock
Exchange (ticker: OPTI).
The principal activity is that of identifying and developing microbial strains, compounds, and formulations for use in food ingredients,
supplements and active compounds that can impact on human physiology, deriving potential health benefits.
2. Accounting Policies
Statement of compliance
The consolidated financial statements of OptiBiotix Health Plc have been prepared in accordance with UK adopted international
accounting standards (IFRSs), IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS.
These are the first financial statements prepared under UK adopted international accounting standards. On 31 December 2020,
IFRS as adopted by the European Union at that date was brought into UK law and became UK adopted international accounting
standards, with future changes being subject to endorsement by the UK Endorsement Board. Optibiotix Health Plc transitioned to
UK-adopted International Accounting Standards in its consolidated and parent company financial statements on 1 January 2021.
This change constitutes a change in accounting framework. However, there is no change on recognition, measurement or disclosure
in the financial year reported as a result of the change in framework.
Basis of preparation
The financial statements have been prepared under the historical cost convention. The functional currency is GBP.
The principal accounting policies are summarised below. They have all been applied consistently throughout the period under
review.
Going concern
The financial statements have been prepared on the assumption that the Group is a going concern. When assessing the foreseeable
future, the Directors have looked at the budget for the next 12 months from the date of this report, the cash at bank available as at
the date of approval of these financial statements and are satisfied that the group should be able to cover its quoted maintenance
costs, other administrative expenses and its ongoing research and development expenditure.
Management have considered its forecast of the group’s cash requirements reflecting contracted and anticipated future revenue
and the resulting net cash outflows. Management have not seen a material disruption to the business as a result of the COVID-19
pandemic, nor the current political crises in Europe. Management will keep events under constant review, and remedial action will
be taken if the situation demands it.
After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they continue to adopt a going concern basis in preparing the annual report and
financial statements
Annual Report and Accounts 2021 34
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
Standards, amendments and interpretations effective and adopted in 2021
Several amendments and interpretations apply for the first time in 2021.
Standard or
Interpretation
Title
IFRS 16
IFRS 9, IAS 39,
IFRS 7, IFRS 4
and IFRS 16
COVID-19-Related Rent Concessions
(Amendment to IFRS 16)
Interest Rate Benchmark Reform – Phase 2
(Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)
Effective for annual
periods beginning
on or after
1 June 2020
1 January 2021
Standards, amendments and interpretations issued and effective in 2021 but not relevant
There are no IFRSs or IFRIC interpretations that are effective and not relevant to the Group.
Standards, amendments and interpretations issued but not yet effective in 2021
There were a number of standards and interpretations which were in issue at 31 December 2021 but not effective for periods
commencing 1 January 2021 and have not been adopted for these financial statements. The Directors have assessed the full impact
of these accounting changes on the Company. To the extent that they may be applicable, the Directors have concluded that none
of these pronouncements will cause material adjustments to the Group’s financial statements. They may result in consequential
changes to the accounting policies and other note disclosures. The new standards will not be early adopted by the Group and will
be incorporated in the preparation of the Group financial statements from the effective dates noted below.
Standard or
Interpretation
Title
Effective for annual
periods beginning
on or after
IFRS 16
IAS 37
IAS 16
IFRS
IFRS 3
IAS 1
IFRS 17
IAS 1
IAS 12
IAS 8
COVID-19-Related Rent Concessions beyond 30 June 2021. (Amendment to IFRS 16)
Onerous Contracts – Cost of Fulfilling a Contract. (Amendments to IAS 37)
Property, Plant and Equipment: Proceeds before Intended Use. (Amendments to IAS 16)
Annual Improvements to IFRS Standards 2018–2020
Reference to the Conceptual Framework. (Amendments to IFRS 3)
Classification of Liabilities as Current or Non-current. (Amendments to IAS 1)
IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts.
Disclosure of Accounting Policies. (Amendments to IAS 1 and IFRS Practice Statement 2)
Deferred Tax related to Assets and Liabilities arising from a Single Transaction.
(Amendments to IAS 12)
Definition of Accounting Estimates. (Amendments to IAS 8)
1 April 2021
1 January 2022
1 January 2022
1 January 2022
1 January 2022
1 January 2023
1 January 2023
1 January 2023
1 January 2023
1 January 2023
There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the
Group.
The Directors anticipate that the adoption of these standard and the interpretations in future period will have no material impact
on the financial statements of the company.
35
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31 December each year. Control is achieved where the Company has the power to govern the financial
and operating policies of an investee entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive
income from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with
those used by other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are
accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted
to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling
interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners
of the Company.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate
of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the
assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Where certain assets of the subsidiary
are measured at revalued amounts or fair values and the related cumulative gain or loss has been recognised in other comprehensive
income and accumulated in equity, the amounts previously recognised in other comprehensive income and accumulated in equity
are accounted for as if the Company had directly disposed of the related assets (i.e. reclassified to profit or loss or transferred directly
to retained earnings).
The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on
initial recognition for subsequent accounting under IFRS 9 governance “Financial Instruments: Recognition and Measurement” or,
when applicable, the cost on initial recognition of an investment in an associate or a jointly controlled entity.
Business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination
is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group,
liabilities incurred by the group to the former owners of the acquiree and the equity interests issued by the group in exchange for
control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value at the acquisition
date, except that:
–
–
–
deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured
in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively;
liabilities or equity instruments related to share-based payment transactions of the acquiree or the replacement of an
acquiree's share-based payment transactions with share-based payment transactions of the group are measured in
accordance with IFRS 2 Share-based Payment at the acquisition date; and
assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations are measured in accordance with that standard.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the
acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-
date amounts of the identifiable assets acquired and the liabilities assumed. If, after assessment, the net of the acquisition-date
Annual Report and Accounts 2021 36
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of
any non-controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the
excess is recognised immediately in profit or loss as a bargain purchase gain.
Revenue recognition
Revenue is measured at the fair value of sales of goods and services less returns and sales taxes. The Group has analysed its business
activities and applied the five-step model prescribed by IFRS 15 to each material line of business, as outlined below:
Sale of products
The contract to provide a product is established when the customer places a purchase order. The performance obligation is to
provide the product requested by an agreed date, and the transaction price is the value of the product as stated in our order
acknowledgement. The performance obligation is typically met when the product is dispatched and so revenue is primarily
recognised for each product when dispatching takes place. In some limited situations when the product is complete but the
customer is unable to take delivery the performance obligation is met when the customer formally accepts transfer of risk and
control even though the product has not been dispatched.
License arrangements
Revenue is recognised when the customer obtains control of the rights to use the IP. The performance obligations are considered
to be distinct from any ongoing distribution arrangements which are treated in line with sales of products.
Milestone payments
Where the transaction price includes consideration that is contingent upon a future event or circumstance, the contingent amount
is allocated entirely to that performance obligation if certain criteria are met. Revenue is recognised at the point of time of the
performance obligation being satisfied.
Investments in associates
Associates are those entities in which the Group has significant influence, but not control or joint control over the financial and
operating policies. Significant influence is presumed to exist when the Group holds between 20 and 50 percent of the voting power
of another entity. Investments in associates are accounted for under the equity method and are recognised initially at cost. The cost
of the investment includes transaction costs.
The consolidated financial statements include the Group’s share of profit or loss and other comprehensive income of
equity-accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant
influence commences until the date that significant influence ceases.
When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of the investment,
including any long-term interests that form part thereof, is reduced to zero, and the recognition of further losses is discontinued
except to the extent that the Group has an obligation or has made payments on behalf of the investee.
Investments at fair value
Equity investments are held at fair value at the balance sheet date with any profit or loss for the year being taken to the Income
statement. The value of listed investments being calculated at the closing price on the balance sheet date.
37
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
Employee Benefits
The Group operates a defined contribution pension scheme. Contributions payable by the Group’s pension scheme are charged to
the income statement in the period in which they relate.
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
(i) Current tax
Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules using tax
rates enacted or substantially enacted by the statement of financial position date.
Income tax is recognised in the income statement or in equity if it relates to items that are recognised in the same or a different
period, directly in equity.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or
paid to the taxation authorities.
(ii) Deferred tax
Deferred tax is provided, using the liability method, on temporary differences at the statement of financial position date between
the tax base of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax assets and unused tax losses,
to the extent that it is probable that taxable profit will be available against which the deductible temporary differenced and the
carrying forward or unused tax assets and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be utilised. Conversely, previously
unrecognised deferred tax assets are recognised to the extent that it is probable that sufficient taxable profit that sufficient taxable
profit will be available to allow all or part of the deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or
the liability is settled, based on the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet
date.
Financial instruments
Financial assets and financial liabilities are recognised when the group becomes a party to the contractual provisions of the
instrument.
Loans and receivables are initially measured at fair value and are subsequently measured at amortised cost, plus accrued interest,
and are reduced by appropriate provisions for estimated irrecoverable amounts. Such provisions are recognised in the statement of
income.
Equity investments comprise investments which do have a fixed maturity and are classified as non current assets if they are intended
to be held for the medium to long term. They are measured at fair value through profit or loss.
Trade receivables are initially measured at fair value and are subsequently measured at amortised cost less appropriate provisions
for estimated irrecoverable amounts. Such provisions are recognised in the statement of income.
Annual Report and Accounts 2021 38
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
Cash and cash equivalents comprise cash in hand and demand deposits and other short-term highly liquid investments with
maturities of three months or less at inception that are readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value.
Trade payables are not interest-bearing and are initially valued at their fair value and are subsequently measured at amortised cost.
Equity instruments are recorded at fair value, being the proceeds received, net of direct issue costs.
Share Capital – Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of taxation, from the proceeds.
Financial instruments require classification of fair value as determined by reference to the source of inputs used to derive the fair
value. This classification uses the following three-level hierarchy:
Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 – inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e., as
prices) or indirectly (i.e., derived from prices);
Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Inventory
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, first-out (FIFO) method. Net
realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
Impairment of non-financial assets
At each statement of financial position date, the Group reviews the carrying amounts of its investments to determine whether there
is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows
that are independent from other assets, the group estimates the recoverable amount of the cash-generating unit to which the asset
belongs. An intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that
the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable
amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless
the relevant asset is carried at a re-valued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised
estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would
have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an
impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the
reversal of the impairment loss is treated as a revaluation increase.
Capital management
Capital is made up of stated capital, premium, other reserves and retained earnings. The objective of the Group’s capital management
is to ensure that it maintains strong credit ratings and capital ratios. This will ensure that the business is correctly supported and
shareholder value is maximised.
39
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
The Group manages its capital structure through adjustments that are dependent on economic conditions. In order to maintain or
adjust the capital structure, the Company may choose to change or amend dividend payments to shareholders or issue new share
capital to shareholders. There were no changes to the objectives, policies or processes during the period ended 31 December 2021.
Convertible Loans
Compound financial instruments issued by the Group comprise convertible notes that can be converted to share capital at the
option of the holder, and the number of shares to be issued does not vary with changes in their fair value.
The liability component of a compound financial instrument is recognised initially at the fair value of a similar liability that does not
have an equity conversion option. The equity component is recognised initially at the difference between the fair value of the
compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs
are allocated to the liability and equity components in proportion to their initial carrying amount.
Convertible debt reserve
The convertible debt reserve is the equity component of the convertible loan notes that have been issued.
Share-based compensation
The fair value of the employee and suppliers services received in exchange for the grant of the options is recognised as an expense.
The total amount to be expensed over the vesting year is determined by reference to the fair value of the options granted, excluding
the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions
are included in assumptions about the number of options that are expected to vest. At each statement of financial position date,
the entity revises its estimates of the number of options that are expected to vest. It recognises the impact of the revision to original
estimates, if any, in the income statement, with a corresponding adjustment to equity.
The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share
premium when the options are exercised.
The fair value of share-based payments recognised in the income statement is measured by use of the Black Scholes model, which
takes into account conditions attached to the vesting and exercise of the equity instruments. The expected life used in the model
is adjusted; based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural
considerations. The share price volatility percentage factor used in the calculation is based on management’s best estimate of future
share price behaviour and is selected based on past experience, future expectations and benchmarked against peer companies in
the industry.
Property, plant and equipment
Property, plant and equipment are stated at historical cost less subsequent accumulated depreciation and accumulated impairment
losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
Depreciation on property, plant and equipment is calculated using the straight-line method to write off their cost over their estimated
useful lives at the following annual rates:
Computer equipment
30%
Useful lives and depreciation method are reviewed and adjusted if appropriate, at the end of each reporting period.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to
arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and
equipment is determined as the difference between the sales proceeds and the carrying amount of the relevant asset and is
recognised in profit or loss in the year in which the asset is derecognised.
Annual Report and Accounts 2021 40
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
Intangibles – Patents
Separately acquired patents are shown at historical cost. Patents have a finite useful life and are carried at cost less accumulated
amortisation. Amortisation is calculated using the straight line method to allocate the cost of the patents over their estimated useful
life of twenty years once the patents have been granted.
Research and Development
Research expenditure is written off to the statement of comprehensive income in the year in which it is incurred. Development
expenditure is written off in the same way unless the Directors are satisfied as to the technical, commercial and financial viability of
individual projects. In this situation, the expenditure is deferred and amortised over the 10 years during which the Company is
expected to benefit.
Merger relief reserve
The merger relief reserve arises from the 100% acquisition of OptiBiotix Limited whereby the excess of the fair value of the issued
ordinary share capital issued over the nominal value of these shares is transferred to this reserve in accordance with section 612 of
the Companies Act 2006.
Critical accounting judgments and key sources of estimation uncertainty
The preparation of the financial statements requires management to make estimates and assumptions concerning the future that
affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenues and expenses during the reporting periods.
The resulting accounting estimates will, by definition, differ from the related actual results.
•
•
•
•
Share based payments
The fair value of share based payments recognised in the income statement is measured by use of the Black Scholes model,
which takes into account conditions attached to the vesting and exercise of the equity instruments. The expected life used
in the model is adjusted; based on management’s best estimate, for the effects of non-transferability, exercise restrictions
and behavioural considerations. The share price volatility percentage factor used in the calculation is based on management’s
best estimate of future share price behaviour and is selected based on past experience, future expectations and benchmarked
against peer companies in the industry.
Amortisation
Management have estimated that the useful life of the fair value of the patents acquired on the acquisition to be 20 years.
Research and developments that have been capitalised in line with the recognition criteria of IAS38 have been estimated to
have a useful economic life of 10 years. These estimates will be reviewed annually and revised if the useful life is deemed to
be lower based on the trading business or any changes to patent law.
Impairment reviews
IFRS requires management to undertake an annual test for impairment of indefinite lived assets and, for finite lived assets to
test for impairment if events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable. Impairment testing is an area involving management judgement, requiring assessment as to whether the
carrying value of assets can be supported by the net present value of future cash flows derived from such assets using cash
flow projections which have been discounted at an appropriate rate. In calculating the net present value of the future cash
flows, certain assumptions are required to be made in respect of highly uncertain matters.
Derecognition of an associate
Management have reviewed the existing relationship with Skinbiotherapeutics Plc in light of changes in the Group’s power to
participate in the financial and operating decisions of the entity, in line with the requirements of IAS28. In the prior year following
a significant dilution in shareholding and a change to the board structure of the entity, it was determined that the significant
influence had been lost and the associate would be de-recognised. This year it is still considered to be an investment.
41
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
3. Segmental Reporting
In the opinion of the directors, the Group has one class of business, in three geographical areas being that of identifying and
developing microbial strains, compounds and formulations for use in the nutraceutical industry. The Group sells into three highly
interconnected markets, all costs assets and liabilities are derived from the UK location.
Revenue analysed by market
Probiotics
Functional Fibres
Revenue analysed by geographical market
UK
US
Rest of world
Year ended
31 December 2021
£
Year ended
31 December 2020
£
1,100,132
112,800
2,212,932
821,126
702,121
1,523,247
Year ended
31 December 2021
£
Year ended
31 December 2020
£
647,649
827,135
734,148
2,212,932
369,892
654,524
498,831
1,523,247
During the reporting period one customer represented £727,135 (32.9%) of Group revenues. (2020: one customer generated £497,416
representing 32.6% of Group revenues)
4. Employees and Directors
Wages and salaries
Directors’ remuneration*
Directors’ fees*
Social security costs
Pension costs
Year ended
31 December 2021
£
Year ended
31 December 2020
£
181,702
493,987
455,400
82,754
43,542
1,257,386
82,448
404,500
406,399
52,231
33,518
979,096
*Total Directors’ remuneration £949,387 (2020: £810,899) see Directors’ remuneration note below
Annual Report and Accounts 2021 42
Notes to the Financial Statements (continued)
4. Employees and Directors (continued)
The average monthly number of employees during the period was as follows:
Directors
Research and development
Directors’ remuneration
Directors’ share based payments
Bonus*
Pension
Total emoluments
Emoluments paid to the highest paid director
Year ended
31 December 2021
No.
Year ended
31 December 2020
No.
9
3
12
6
2
8
Year ended
31 December 2021
£
Year ended
31 December 2020
£
841,888
33,514
107,500
34,882
1,017,784
254,000
763,399
102,533
47,500
33,518
946,950
218,000
Total
£
24,996
261,800
87,010
33,259
72,526
127,551
25,000
20,738
159,602
205,302
*Total Directors’ remuneration £949,388 see Directors’ remuneration note below
Included in total emoluments paid to Directors are capitalised wages of £92,611 (2020: £187,241)
Directors’ remuneration
Details of emoluments received by Directors of the Group for the period ended 31 December 2021 are as follows:
Remuneration Share based Pension
and fees payments Costs
£ £ £
A Reynolds* 24,996 – –
S P O’Hara 254,000 – 7,800
F Narbel * 82,867 – 4,143
S Christie 25,000 8,259 –
R Davidson 55,000 17,526 –
S Kolyda 114,250 7,729 5,572
C Brinsmead 25,000 – –
S Hammond 20,738 – –
M Hvid-Hansen* 152,002 – 7,600
R Kamminga 195,535 – 9,767
Total 949,388 33,514 34,882
1,017,784
*For disclosure in relation to directors’ fees please refer to Note 20.
43
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
5. Net Finance Income/(Costs)
Finance Income:
Bank Interest
Finance Cost :
Loan note interest
Net Finance Income/(Costs)
6. Expenses – analysis by nature
Year ended
31 December 2021
£
Year ended
31 December 2020
£
121
98
(47,600)
(44,954)
(47,479) (44,856)
Year ended
31 December 2021
£
Year ended
31 December 2020
£
Research and development
Directors’ fees & remuneration (Note 4)*
Salaries
Auditor remuneration – audit fees (Consolidated accounts £21,250 (2020: £18,250)
Auditor remuneration – non audit fees (tax compliance)
Brokers & Advisors
Advertising & marketing
Share based payments charge
Depreciation on property, plant and equipment
Amortisation of patents and development costs
Patent and IP costs
Consultancy fees
Legal and professional fees
Public Relations costs
Travel costs
Other expenses
64,319
856,777
181,702
41,822
12,700
208,579
41,506
60,288
–
288,455
114,788
262,262
28,389
68,185
16,061
242,824
85,703
623,658
82,448
42,720
11,400
123,531
86,673
127,248
393
247,502
136,762
76,704
42,625
82,394
31,434
190,017
Total administrative expenses
2,488,657
1,991,212
*£856,777 is net of £92,611 capitalised in the year, total remuneration £949,388 as per note 4.
Annual Report and Accounts 2021 44
Notes to the Financial Statements (continued)
7. Corporation Tax
Corporation tax credit
Under provision prior year
Deferred tax movement
Overseas tax suffered
Total taxation
Analysis of tax expense
Year ended
31 December 2021
£
Year ended
31 December 2020
£
(75,000)
(9,523)
–
(84,523)
(120,000)
–
28,185
180
(91,635)
No liability to UK corporation tax arose on ordinary activities for the year ended 31 December 2021 nor for the year ended
31 December 2020.
Profit (Loss) on ordinary activities before income tax
6,176,506
5,710,232
Year ended
31 December 2021
£
Year ended
31 December 2020
£
Loss on ordinary activities multiplied by the standard rate of
corporation tax in UK of 19% (2020 – 19%)
Effects of:
Disallowables
Income not taxable
Accelerated depreciation
R&D tax credit claimed
Amortisation
Revenue items capitalised
Other timing differences
Overseas tax suffered
Unused tax losses carried forward
Tax credit
1,173,536
1,084,944
13,619
(1,545,707)
–
(75,000)
33,342
(36,785)
9,477
–
342,995
(84,523)
89,931
(1,362,287)
75
(120,000)
27,851
(66,566)
28,185
180
226,052
(91,635)
The Group has estimated losses of £4,626,000 (2020: £4,266,000) and estimated excess management expenses of £3,786,000 (2020:
£2,555,000).
The tax losses have resulted in a deferred tax asset at 25% (2020: 19%) of approximately £1,156,000 (2020: £810,000) which has not
been recognized as it is uncertain whether future taxable profits will be sufficient to utilise the losses.
45
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
7. Corporation Tax (continued)
Current tax asset – Group
Balance brought forward
Received during the year
Prior year adjustment
Research & development tax credit claimed
8. Earnings per share
2021
£
310,435
(194,663)
477
75,000
191,249
2020
£
190,435
–
–
120,000
310,435
Basic earnings per share is calculated by dividing the earnings attributable shareholders by the weighted average number of ordinary
shares outstanding during the period.
Reconciliations are set out below:
2021
Basic and diluted EPS
Basic EPS
Diluted EPS
Earnings
£
6,261,029
6,261,029
Weighted average
Number of shares
No.
87,574,152
95,536,395
2020
Basic EPS
Diluted EPS
Earnings
£
5,801,867
5,801,867
Weighted average
Number of shares
£
87,207,703
95,569,946
Profit per-share
Pence
7.15p
6.55p
Loss per-share
Pence
6.65
6.07
As at 31 December 2021 there were 7,632,907 (2020: 8,032,907) outstanding share options and 329,336 (2020: 329,386) outstanding
share warrants.
Annual Report and Accounts 2021 46
Notes to the Financial Statements (continued)
9.
Intangible assets
Group
Cost
At 31 December 2019
Additions
Disposals
At 31 December 2020
Additions
Disposals
At 31 December 2021
Group
Amortisation
At 31 December 2019
Amortisation charge for the year
At 31 December 2020
Amortisation charge for the year
At 31 December 2021
Carrying amount
At 31 December 2021
At 31 December 2020
The company had no intangible assets
47
OptiBiotix Health Plc
Development
Costs and
Patents
£
3,321,930
350,345
–
3,672,275
193,506
–
3,865,781
Development
Costs and
Patents
£
689,152
247,502
936,654
288,455
1,225,109
2,640,672
2,735,621
Notes to the Financial Statements (continued)
10. Property, plant and equipment
Group
Cost
At 31 December 2019
Additions
Disposals
At 31 December 2020
Additions
Disposals
At 31 December 2021
Depreciation
At 31 December 2019
Charge for the year
At 31 December 2020
Charge for the year
At 31 December 2021
Carrying amount
At 31 December 2021
At 31 December 2020
£
8,461
–
–
8,461
–
–
8,461
8,068
393
8,461
–
8,461
–
–
The company had no property plant and equipment.
11. Investments
Group Investments
Set out below is the investment in Skinbiotherapeutics PLC which is material to the Group. The investment treated as an associate
of the group until 2 November 2020, after which time the shareholding dropped to 24.65% and has been recalculated as an equity
investment. The entity listed below have share capital consisting solely of ordinary shares, which are held by the Group. The country
of incorporation is also the principal place of business and the proportion of ownership interest is the same as the proportion of
voting rights held.
Available for sale investments
At the beginning of the period
Additions
Revaluations
Share of loss
Disposal of shares during year
At 31 December
2021
£
2020
£
8,962,564
2,842,834
7,500,681
–
(2,812,318)
13,650,927
7,120,962
(303,449)
(697,783)
8,962,564
Annual Report and Accounts 2021 48
Notes to the Financial Statements (continued)
11. Investments (continued)
Company Investments
Available for sale investments
At the beginning of the period
Additions
Revaluations
Disposal of shares during year
Investments in subsidiary undertakings
At the beginning of the period
At 31 December
2021
£
2020
£
8,962,564
4,131,651
7,500,681
(2,812,318)
13,650,927
2,080,905
2,080,905
15,731,832
5,528,696
(697,783)
8,962,564
2,080,905
2,080,905
11,043,469
As at 31 December 2021 the Company directly held the following subsidiaries:
Country of
incorporation
Name of company Principal activities and place of business
Proportion of
equity interest
OptiBiotix Limited Research & Development United Kingdom
100% of ordinary shares
Optibiotix Health India Health foods India
Private Limited
The Healthy Weight Loss Health foods United Kingdom
Company Limited
100% of ordinary shares
68% of ordinary shares
ProBiotix Health Ltd Health foods United Kingdom
100% of ordinary shares
ProBiotix Limited Health foods United Kingdom
100% of ordinary shares
12. Inventories
Group Company
2021 2020 2021
£ £ £
Finished goods 101,877 184,236 –
2020
£
–
During the period £1,089,588 (2020: £643,428) has been expensed to the income statement.
49
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
13. Trade and other Receivables
Group Company
2021 2020 2021
£ £ £
2020
£
Non-current
Amounts owed by group undertakings – – 318,127
– – 318,127
Current
Accounts receivable 1,413,882 512,437 –
Other receivables 82,587 110,634 39,544
Prepayments and accrued income 56,021 22,752 26,356
1,552,490 645,823 65,900
14. Cash and Cash Equivalents
Group Company
2021 2020 2021
£ £ £
Cash and bank balances 2,007,448 864,680 1,705,291
329,057
329,057
–
71,278
18,142
89,420
2020
£
532,769
15. Called Up Share Capital
Issued share capital comprises:
Ordinary shares of 2p each – 87,940,601 (2020: 87,940,601)
2021
£
1,758,812
1,758,812
2020
£
1,758,812
1,758,812
16. Reserves
Share capital is the amount subscribed for shares at nominal value. Share premium represents amounts subscribed for share capital
in excess of nominal value, net of expenses.
The convertible debt reserve is the equity component of the convertible loan notes that have been issued.
Merger relief reserve arises from the 100% acquisition of OptiBiotix Limited on 5 August 2014 whereby the excess of the fair value
of the issued ordinary share capital issued over the nominal value of these shares is transferred to this reserve in accordance with
section 612 of the Companies Act 2006.
Retained earnings represents the cumulative profits and losses of the group attributable to the owners of the company.
Share based payment reserve represents the cumulative amounts charged in respect of unsettled warrants and options issued.
Annual Report and Accounts 2021 50
Notes to the Financial Statements (continued)
17. Trade and other payables
Current:
Group Company
2021 2020 2021
£ £ £
Accounts Payable 422,948 359,321 18,452
Accrued expenses 175,138 157,039 22,800
Other payables 2,818 2,635 –
Total trade and other payables 600,904 518,995 41,252
2020
£
40,174
22,750
–
62,924
18. Deferred Tax
Deferred tax is provided, using the liability method, on temporary differences at the statement of financial position date between
the tax base of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 25% (2020: 19%).
The movement on the deferred tax account is as shown below:
At 31 December 2020
Movement in the period
At 31 December 2021
2021
£
561,523
(9,523)
552,000
2020
£
522,350
39,173
561,523
Deferred tax assets have not been recognised in respect of tax losses and other temporary differences giving rise to deferred tax
assets as the directors believe there is uncertainty whether the assets are recoverable.
19. Convertible Loan Notes
ProBiotix Health Limited issued 1,025,000 floating rate convertible loan notes (CLN) for £1,025,000 on 11 December 2018. The notes
are convertible into ordinary shares of the Company and converted into shares immediately prior to the occurrence of a listing of
the company, or repayable on December 2023. The conversion rate is 1 share for each note held at an amount which is equal to
50% of the listing price.
OptiBiotix Health Plc has subscribed 250,000 of the CLN for £250,000
The convertible notes are presented in the Group balance sheet as follows:
Balance brought forward
Additions
Equity element
Liability component
Interest charged at effective interest rate
Non-current liability
2021
£
771,759
–
–
771,759
47,600
819,359
2020
£
726,805
–
–
726,805
44,954
771,759
Interest expense is calculated by applying the effective interest rate of 6% to the liability component.
51
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
20. Related Party Disclosures
Group
During the year to 31 December 2021 £87,010 (2020: £184,132) was paid to F Narbel in respect of Director’s services provided.
During the year to 31 December 2021 £24,996 (2020: £24,996) was paid to Reyco Limited for the services of Adam Reynolds as
Director of ProBiotix Health Limited
During the year to 31 December 2021 the Group was charged £44,507 (2020: £42,000) for services provided by Morrison Kingsley
Consultants Limited, a company controlled by Mark Collingbourne, Chief Financial Officer.
Company
During the year Optibiotix Health PLC loaned Probiotix limited £570. The balance owing at the 31 December 2021 was £53,835
(2020, £80,119). There was no interest charged during the year
During the year Optibiotix Health PLC loaned Optibiotix Limited £1,551,651 during the year of which £619,749 was repaid. The
balance at the year end of £931,903 (2020, £6,301,666 was cancelled. This does not impact on the consolidated Group accounts.
21. Ultimate Controlling Party
No one shareholder has control of the company.
22. Share Based payment Transactions
(i) Share options
The Company had introduced a share option programme to grant share options as an incentive for employees of the former
subsidiaries.
Each share option converts into one ordinary share of the Company on exercise. No amounts are paid or payable by the recipient
on receipt of the option and the Company has no legal obligation to repurchase or settle the options in cash. The options carry
neither rights to dividends nor voting rights prior to the date on which the options are exercised. Options may be exercised at any
time from the date of vesting to the date of expiry.
Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:
Number of options Average exercise price
2021 2020 2021
No. No. £
2020
£
Outstanding at the beginning of the period 8,032,907 7,765,907 0.21
Granted during the period 300,000 –
Forfeited/cancelled during the year (400,000) (33,000) 0.785
Exercised during the period – –
Outstanding at the end of the period 7,632,907 8,032,907 0.18
0.20
0.57
0.695
0.21
For the share options issued in 2014 vesting conditions dictate that half will vest if the middle market quotation of an existing
Ordinary share is 16p or more on each day during any period of at least 30 consecutive Dealing days and half will vest when a
commercial contract is signed. The two conditions are not dependent on each other and will vest separately.
Annual Report and Accounts 2021 52
Notes to the Financial Statements (continued)
22. Share Based payment Transactions (continued)
For the share options issued in 2015 vesting conditions dictate that some of the options will vest if the middle market quotation of
an existing Ordinary share is 40p or more on each day during any period of at least 30 consecutive Dealing days and some will vest
if certain revenue targets are met or if certain scientific studies are completed. The conditions are not dependent on each other and
will vest separately.
For the share options issues in 2017 vesting conditions dictate that the options will vest if certain revenue conditions are met.
For the share options issues in 2018 vesting conditions dictate that the options will vest if certain revenue conditions are met.
For the share options issues in 2019 vesting conditions dictate that the options will vest if certain revenue conditions are met.
For the share options issues in 2020 vesting conditions dictate that the options will vest if certain revenue conditions are met.
The share options outstanding at the period end had a weighted average remaining contractual life of 1,241 days (2020: 1,639 days)
and the maximum term is 10 years.
The share price per share at 31/12/21 was £0.46 (31/12/2020: £0.55)
Expected volatility is based on a best estimate for an AIM listed entity. The expected life used in the model has been adjusted, based
on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
The fair values of the last share options issued were derived using the Black Scholes model. The following assumptions were used
in the calculations:
Grant date
Exercise price
Share price at grant date
Risk-free rate
Volatility
Expected life
Fair value
(ii) Warrants
02/06/2020
57p
57p
0.25%
35%
10 years
24p
On 20 February 2014, an open offer was made to the potential investors to subscribe for 203,380,942 new ordinary shares of £0.0001
each at £0.0001 each. On a 1:1 basis, warrants attach to any shares issued under the open offer convertible at any time to 30 November
2018 at £0.0004 per shares.
On 4 August 2014, the warrants in issue were consolidated in the ratio of 200:1 as part of the share reorganisation.
At a meeting of warrant holders on 24 January 2017 it was agreed to extend the exercise period for all remaining warrants to 28
January 2022 and 19 February 2022
Movements in the number of share warrants outstanding and their related weighted average exercise prices are as follows:
Number of warrants Average exercise price
2021 2020 2021
No. No. £
2020
£
Outstanding at the beginning of the period 329,336 329,386 0.08
Outstanding at the end of the period 329,386 329,336 0.08
0.08
0.08
A charge of £60,288 (2020: £127,248) has been recognised during the year for the share based payments over the vesting period.
53
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
23. Financial Risk Management Objectives and Policies
The Group’s financial instruments comprise cash balances and receivables and payables that arise directly from its operations.
The main risks the Group faces are liquidity risk and capital risk.
The Board regularly reviews and agrees policies for managing each of these risks. The Group’s policies for managing these risks are
summarised below and have been applied throughout the period. The numerical disclosures exclude short-term debtors and their
carrying amount is considered to be a reasonable approximation of their fair value.
Interest risk
The Group is not exposed to significant interest rate risk as it has limited interest bearing liabilities at the year end.
Credit risk
The Group is not exposed to significant credit risk as it did not make any credit sales during the year.
Liquidity risk
Liquidity risk is the risk that Group will encounter difficulty in meeting these obligations associated with financial liabilities.
The responsibility for liquidity risks management rest with the Board of Directors, which has established appropriate liquidity risk
management framework for the management of the Group’s short term and long-term funding risks management requirements.
During the period under review, the Group has not utilised any borrowing facilities.
The Group manages liquidity risks by maintaining adequate reserves and reserve borrowing facilities by continuously monitoring
forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
Capital risk
The Group’s objectives when managing capital are to safeguard the ability to continue as a going concern in order to provide returns
for shareholders and benefits to other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
24. Post Balance Sheet Events
On 7 January 2022 the Company cancelled 800,000 options with the agreement of option holders and reissued 500,000 options at
a nominal value of 2 pence per share.
On 27 January 2022 the Company issued 125,000 new shares following the exercise of warrants at 8 pence per share.
On 9 March 2022 the company issued 60 new shares following the exercise of warrants at 8 pence per share.
On 31 March 2022 , Probiotix Health Limited a wholly owned subsidiary of the Company was listed on the AQSE Growth Market
with an associated fund raise and distribution is specie. Following the listing the Company retains 43.99% of the issued share capital.
Annual Report and Accounts 2021 54
Notice of Annual General Meeting
OPTIBIOTIX HEALTH PLC
Notice is hereby given that the Annual General Meeting of OptiBiotix Health PLC (the “Company”) will be held at the offices of
Walbrook PR Ltd, 75 King William Street, London, EC3V 9HD on 26 July 2022 at 12:00 noon for the following purposes:
1.
2.
3.
4.
To receive the Company’s Report and Accounts for the year ended 31 December 2021.
To re-elect Stephen O’Hara, who retires by rotation, as a Director.
To re-elect Neil Davidson, who retires by rotation, as a Director
To re-appoint Jeffrey’s Henry LLP as auditors of the Company and to authorise the Directors to determine their remuneration.
Special Business
To consider and, if thought fit, to pass the following resolutions as to the resolution numbered 5 as an Ordinary Resolution and as
to the resolutions numbered 6 as Special Resolutions:
5.
6.
THAT the Directors be and they are hereby authorised generally and unconditionally for the purposes of Section 551 of the
Companies Act 2006 (the “Act”) to exercise all powers of the Company to allot shares in the Company or to grant rights to
subscribe for, or to convert any security into, shares in the Company (such shares and/or rights being “Relevant Securities”)
up to an aggregate nominal amount of £586,270.51 being one third of the current issued share capital, provided that this
authority shall, unless renewed, varied or revoked by the Company, expire on the date being the earlier of the date 15 months
after the passing of this Resolution and the conclusion of the Annual General Meeting of the Company to be held in 2023,
save that the Company may, before such expiry, make offers or agreements which would or might require Relevant Securities
to be allotted and the Directors may allot Relevant Securities in pursuance of such offer or agreement notwithstanding that
the authority conferred by this Resolution has expired.
This authority shall be in substitution for and shall replace any existing authority pursuant to Section 551 of the Act to the
extent not utilised at the date this resolution is passed.
THAT, subject to and conditional upon the passing of resolution 5, the Directors be and they are hereby generally empowered
pursuant to Section 570 of the Act to allot equity securities (as defined in Section 560 of the Act) for cash pursuant to the
authority conferred under Resolution 5 above as if sub-section 561(1) of the Act did not apply to such allotment, provided
that this power shall be limited to:-
(a)
(b)
the allotment of equity securities in connection with a rights issue or any pre-emptive offer in favour of holders
of ordinary shares in the Company where the equity securities attributable to the respective interests of such
holders are proportionate (as nearly as maybe) to the respective numbers of ordinary shares held by them on the
record date for such allotment subject to such exclusions or other arrangements as the Directors may deem
necessary or expedient to deal with fractional entitlements or any legal or practical difficulties under the laws of,
or the requirements of, any regulatory body or stock exchange of any overseas territory or otherwise;
the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to an aggregate
nominal value of £527,643.46 being 30% of the current issued share capital;
and shall expire on the date being the earlier of the date 15 months after the passing of this Resolution and the conclusion
of the Annual General Meeting of the Company to be held in 2023, provided that the Company may before such expiry
make an offer or agreement which would require equity securities to be allotted in pursuance of such offer or agreement as
if the power conferred hereby had not expired and provided further that this authority shall be in substitution for and
supersede and revoke any earlier power given to directors.
By Order of the Board
Stephen O’Hara
27 June 2022
55
OptiBiotix Health Plc
Registered Office:
Innovation Centre
Innovation Way
Heslington
York
YO10 5DG
Explanatory Notes to the
Notice of Annual General Meeting
Notes:
1.
A member of the Company is entitled to appoint a proxy or proxies to attend, speak and vote at the meeting in his stead. A
member may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares.
A member may not appoint more than one proxy to exercise rights attached to any one share. A proxy does not need to be
a member of the Company.
2.
To be effective Forms of Proxy can be registered as follows:-
• by logging on to www.shareregistrars.uk.com, clicking on the “Proxy Vote” button and then following the on-screen
instructions;
• by post or by hand to Share Registrars Limited, 3 The Millennium Centre, Crosby Way, Farnham, Surrey GU9 7XX using
the proxy form accompanying this notice;
• in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the
procedures set out below.
In order for a proxy appointment to be valid the proxy must be received by Share Registrars Limited by 12:00 Noon on 22 July
2022
3.
4.
To change your proxy instructions simply submit a new proxy appointment using the methods set out above and in the
notes to the Form of Proxy. Note that the cut-off times for receipt of proxy appointments (see above) also apply in relation
to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded.
To be entitled to vote at the meeting (and for the purpose of the determination by Company of the number of votes they
may cast), members must be entered in the Register of members at 12:00 noon on 22 July 2022 (“the specified time”). If the
meeting is adjourned to a time not more than 48 hours after the specified time applicable to the original meeting, that time
will also apply for the purpose of determining the entitlement of members to attend and vote (and for the purpose of
determining the number of votes they may cast) at the adjourned meeting. If however the meeting is adjourned for a longer
period then, to be so entitled, members must be entered on the Company’s Register of Members at the time which is not
less than 48 hours before the time fixed for the adjourned meeting or, if the Company gives notice of the adjourned meeting,
at the time specified in that notice.
5.
Appointment of proxies through CREST.
CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do
so for the meeting and any adjournment(s) of it by using the procedures described in the CREST Manual (available via
www.euroclear.com). CREST Personal Members or other CREST sponsored members, and those CREST members who have
appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to
take the appropriate action on their behalf. For a proxy appointment or instructions made using the CREST service to be
valid, the appropriate CREST message (a CREST Proxy Instruction) must be properly authenticated in accordance with Euroclear
UK & Ireland Limited’s (EUI) specifications and must contain the information required for such instructions, as described in
the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the
instruction given to a previously appointed proxy, must, in order to be valid, be transmitted so as to be received by Share
Registrars Limited (ID 7RA36) no later than 12:00 noon. on 22 July 2022 or, in the event of an adjournment of the meeting,
2 business days before the adjourned meeting excluding non-business days. For this purpose, the time of receipt will be
taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which
the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any
change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make
available special procedures in CREST for any particular message. Normal system timings and limitations will therefore apply
in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the
CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure
that his/her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message
Annual Report and Accounts 2021 56
Explanatory Notes to the Notice of Annual General Meeting (continued)
is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable,
their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning
practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the
circumstances set out in regulation 35(5)(a) of the Uncertificated Securities Regulations 2001
Resolution 1
The Directors are required by law to present to the meeting the Audited Accounts and Directors’ Report for the period ended
31 December 2021.
Resolutions 2-3
Each of the Company’s Directors listed in this resolution offer themselves up for re-appointment under the terms of the Company’s
articles of association which state that each director must offer himself or herself up for re-appointment every three years.
Resolution 4
The Auditors are required to be re-appointed at each Annual General Meeting at which the Company’s Audited Accounts are
presented.
Resolution 5
Under the Act, the Directors may only allot shares if authorised to do so. Whilst the current authority has not yet expired, it is customary
to grant a new authority at each Annual General Meeting. Accordingly, this resolution will be proposed as an ordinary resolution to
grant a new authority to allot or grant rights over up to £586,270.51 in nominal value of the Company’s unissued share capital. If
given, this authority will expire at the Company’s next annual general meeting following the date of the resolution. Although the
Directors currently have no present intention of exercising this authority, passing this resolution will allow the Directors flexibility to
act in the best interests of the Company’s shareholders when opportunities arise.
Resolution 6
The Directors require additional authority from the Company’s shareholders to allot shares where they propose to do so for cash
and otherwise than to the Company’s shareholders pro rata to their holdings. This resolution will give the Directors power to issue
new ordinary shares for cash other than to the Company’s shareholders on a pro rata basis
(i)
(ii)
by way of a rights or similar issue or
with a nominal value of up to £527,643.36. This resolution will be proposed as a special resolution.
57
OptiBiotix Health Plc
optibiotix.com
To find out more please contact OptiBiotix on:
info@optibiotix.com
OptiBiotix Health Plc | Innovation Centre, Innovation Way, Heslington, York, YO10 5DG, UK.
OptiBiotix Health Plc
© 2018 OptiBiotix Health Plc.
All rights reserved.
ANNUAL REPORT AND ACCOUNTS
FOR THE YEAR ENDED 31 DECEMBER 2021