optibiotix.com
ANNUAL REPORT AND ACCOUNTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Contents
Company Information
Chairman’s and Chief Executive’s Report
Strategic Report
Directors’ Report
Independent Auditor’s Report
2
3
9
14
17
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Financial Position
Consolidated Statement of
Changes in Equity
22
23
24
Consolidated Statement of Cash Flows
25
Notes to the Consolidated Statement
of Cash Flows
26
Company Statement of Financial Position 27
Company Statement of Changes in Equity 28
Company Statement of Cash Flows
29
Notes to the Company Statement of
Cash Flows
Notes to the Financial Statements
30
31
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: Peterhouse Capital Limited
80 Cheapside
London
EC2V 6DZ
Website Address: www.optibiotix.com
Annual Report and Accounts 2022 2
Chairman’s and Chief Executive’s Report
For the year ended 31 December 2022
approvals
The Group addresses a very large and fast-growing market with
a unique portfolio of proven ingredients and finished products.
The year has seen progress in both scientific human studies and
regulatory
international markets
in key
demonstrating our products effectiveness and global
acceptability. After strong sales growth through 2019 (£745K),
2020 (£1.5m) and 2021 (£2.2m) the Company expanded its team
in 2021 including the appointment of CEO, René Kamminga to
run the prebiotic business, to meet growth demands post Covid
but as with many companies in the industry suffered from lower
sales in 2022 caused by the global economic uncertainty that
followed the Russian invasion of Ukraine.
This was compounded by the large amount of orders placed in
Q4 2021 resulting in high stock levels held by customers
accompanied by delays in launching new products and
re-ordering due to the global economic down turn in 2022. The
Company are pleased that its products have begun to be
commercialised by a number of large and well known
commercial partners. Agreements with these partners are time
consuming with extensive due diligence and consumer testing
prior to launch. Launch of products with these partners is a
significant endorsement of our products which we believe in the
absence of recent global economic events (COVID and Ukraine)
would have led to strong revenue growth.
Post period the Company has responded to these changes in the
external environment by a reduction in costs, a focus on sales
and partners delivering to forecast, and building up operational
resilience by broadening its partner base and building its
ecommerce channels to reduce partner dependency. The
Company believes subject to no significant change to the
external environment these measures will return the business
to the high levels of growth and EBITDA profitability achieved
in 2020 and 2021. The Group remains financially robust with no
debt, and valuable assets in SkinBiotherapeutics and ProBiotix
Health providing a strong balance sheet, with commercialisation
of our second-generation technologies affording potential for
future growth and shareholder value.
Strategic overview
is a
OptiBiotix Health
life sciences business founded on the
development of prebiotic and probiotic compounds to tackle obesity,
cardiovascular disease, diabetes and skincare: all markets offering strong
growth potential in every part of the world. The Company has built a
broad portfolio of microbiome assets in this field including prebiotic
products like SlimBiome®, WellBiome®, SweetBiotix®, and Microbiome
modulators within
through
SkinBiotherapeutics and probiotics through ProBiotix Health Plc.
These create a diverse portfolio of opportunities in an emerging area
of healthcare.
its core business and skincare
333
OptiBiotix Health Plc
The first phase of the Companys’ two-stage growth strategy was to
establish the credibility of our science and financial sustainability of each
business through an initial focus on building sales of our first-generation
products (principally SlimBiome® in prebiotics and LPLDL® in probiotics)
though business-to-business deals with partners in multiple territories
around the world, starting in Europe, while at the same time pursuing
the development of our more innovative second-generation products
that offer potentially larger future returns. This was achieved in 2020
and 2021 with combined revenues of £2.2m and both the Probiotic
(now ProBiotix Health Plc) and Prebiotic trading businesses being
EBITDA profitable in both years and the Group showing a £5.8m profit
in 2020 and £6.2m in 2021, albeit largely due to the gain in the value of
its investments.
With SlimBiome® and LPLDL® winning international awards, gaining
excellent customer reviews, and becoming established ingredient
brands with a number of key national and international partners in 2019
we started to move towards developing and testing market acceptance
of our own label branded products (e.g GoFigure, SlimBiome Medical,
and CholBiomeX3) on our online store. The aim was to use the online
store as a display window to attract B2B partners and major retailers and
assess the potential of selling final products direct to consumers. With
positive customer feedback on our own products and more consumers
buying online as a result of the COVID pandemic (Mintel, Vitamins and
Supplements: Inc Impact of COVID-19 - US, August 2020) a decision was
made in 2021 to develop this into a business unit with the appointment
of a E-commerce director. This was one of a number of changes made
in 2022 to allow the Company to respond to changes in the external
environment. These also included:
•
•
•
•
Gradually moving from ingredient sales to the sale of finished own
brand SlimBiome Medical or private label products, both through
larger partners and direct-to-consumer through our own online
store, Amazon, and other outlets such as Tmall.com in Asia. This
increases margins and reduces partner dependency.
Shifting the focus from Europe to large partners in key strategic
markets, particularly the USA and Asia. This broadens the partner
base and reduces revenue dependency on a small number of
partners whilst accessing larger markets with substantially higher
sales volumes.
Expanding our first-generation product portfolio of functional
ingredients by extending our technology into new channels such
as sports nutrition with LeanBiome® and new product areas such
as WellBiome®, and
Progressing the commercialisation of our second-generation
products, SweetBiotix® and Microbiome Modulators.
This was accompanied by a number of new appointments throughout
2022 in marketing, business development in the USA, and e-commerce
to support growth of the business. Whilst global economic conditions
Chairman’s and Chief Executive’s Report (continued)
temporarily impacted on progress during 2022 we believe the changes
made in 2022 increase the Company’s resilience to volatility in the
external environment and are seeing sales slowly returning to previous
forecast levels as market conditions improve. The other key point is that
now we have established the SlimBiome® brand and OptiBiotix’s market
credibility customers are starting to place orders without having to go
through a complex negotiation process.
Commercial and scientific overview
Key developments during the financial year and their impact on
potential sales growth in 2023 include:
•
•
•
The achievement in January 2022 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 retail partners and will enhance opportunities
in other retail channels both within the UK and international
markets.
Our entry into the sports nutrition market with the launch of
LeanBiome®, a patented blend of dietary and prebiotic fibres and
a trace mineral, developed to support athletes increase lean
muscle mass and to improve metabolism, gut health and satiety.
Our distribution agreement with leading e-commerce retailer The
Hut Group PLC (“THG”), signed
in December 2021, saw
LeanBiome® launched in January 2022 in a small number of
products including its Impact Diet Lean product as part of its My
Protein range in the UK and at the end of H1 2022 a product
extension with a breakfast smoothie. Both products are receiving
excellent customer reviews. High inflation in 2022 led to
consumers becoming more price-conscious leading to a trading
down of high protein products which reduced the forecast
demand for protein powder shakes across the industry and a
lower than forecast sales from THG. With protein prices slowly
returning to previous levels we are seeing a gradual return to sales
growth in this area.
Prior to ProBiotix’s separate listing, publication in January 2022 of
a third human volunteer study on the clinical 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 low level statins and other treatments more typically associated
with pharmaceuticals, suggesting potential in high value
pharmaceutical consumer markets for the use of LPLDL®
•
•
•
•
•
•
•
individuals who are unwilling or unable to tolerate
in
other treatments.
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 Health share
held. The Group retained a 44% shareholding in ProBiotix Health,
valued at circa £11.2m at the end of 2022. An impairment
provision (see note 11) has been made to take account of the
reduction in PBX share price from 31st March 2022 and the release
of these accounts.
Good progress in the development of OptiBiotix Health India. Its
formation has allowed us to reduce the administrative and tax
burden of manufacturing and selling ingredients and finished
products in India. We see the lower manufacturing and transport
costs with geographical proximity to the countries in the region
a driver of future growth in the Asia Pacific region.
Certification in June 2022 of LeanBiome® as an Informed
Ingredient for Sports Nutrition: an important industry certification
demonstrating through rigorous independent testing by an
authorised body that it is free from substances that are banned in
sport. This is a significant step in attracting major sports nutrition
companies to incorporate LeanBiome® in their products.
The appointment in September 2022 of Nutraconnect Pte Ltd, a
nutraceutical business growth acceleration service headquartered
in Singapore, as a new commercialisation partner for SlimBiome®
and LeanBiome® in the Asia Pacific region. This has led to a
number of new partners signing agreements and placing first
orders for products in 2023.
The launch in September 2022 of our GoFigure range of weight
management products containing SlimBiome®
in several
pharmacies across India owned by Apollo Hospitals & Pharmacies.
This number has doubled in 2023 with the aim of having products
in more than 1000 stores by the end of 2023.
Regulatory approval in October 2022 by the Saudi Food & Drug
Authority (SFDA) for the sale by our exclusive distributor Nahdi
Medical Co (Nahdi) of GoFigure shakes and bars containing
SlimBiome®. This has allowed the launch in January 2023 of the
GoFigure range of weight management products through Nahdi’s
pharmacy network and e-commerce platform. The registration
process also provides approval in the other five countries that are
members of the Gulf Cooperation Council.
Completion in October 2022 of a systematic review of the
scientific literature relating to SlimBiome®, in accordance with the
Australia New Zealand Food Standards Code (FSANZ), that enables
us to make four new health claims for SlimBiome® on product
Annual Report and Accounts 2022 4
Annual Report and Accounts 2022
Chairman’s and Chief Executive’s Report (continued)
•
•
•
•
•
packaging and in advertising; these relate to feelings of fullness,
reduction of hunger, and improvement of the gut microbiome
and improving digestive health. These help us to differentiate
SlimBiome® from competitors.
Launch in late November 2022 of an online shop for GoFigure
products containing SlimBiome® on a leading e-commerce
platform in China, Tmall.com, allowing us to sell direct to
consumers in this huge and growing market. We are seeing steady
sales growth
in 2023, particularly of our
fruit gummies.
in this market
Publication of a peer-reviewed study (see Prebiotic Potential of a
New Sweetener Based on Galactooligosaccharides and Modified
Mogrosides – PubMed (nih.gov)) of one of our SweetBiotix®
products confirming its sweetness, bulking and prebiotic fibre
properties and concluding it could be an innovative, healthy
substitute for sugar in a range of everyday products. Independent
scientific confirmation of SweetBiotix® by leading scientists in the
field is key to creating interest and industry credibility and provides
important marketing materials for commercial launches.
Significant progress by one of our US partners in the commercial
scale production of SweetBiotix®, with final product tested and
accepted and now awaiting further structural analysis and formal
taste testing to determine the regulatory pathway before
progressing to a launch.
Conclusion of a new joint development agreement, announced
in July 2022, with Firmenich, the world’s largest privately owned
taste and fragrance company, and one of the world’s largest
supplier of Stevia, to develop new products containing our second
generation SweetBiotix® compound, in return for sales-based
milestone and royalty payments. This agreement with one of the
leaders in the field after years of due diligence is a substantial
validation of the SweetBiotix science. This continues to progress
at pace in 2023. We believe that the recent scientific publication
and the deal with Firmenich, which is merging with DSM, the
world’s largest ingredients supplier, to create a NewCo with a US
$11.4bn turnover, are major steps forward in bringing SweetBiotix®
to market. Firmenich is now making substantial progress in
producing SweetBiotix® and in optimising the manufacturing
process, and we see significant opportunity here in 2023.
Significant scientific and commercial progress in the development
of our microbiome modulators: a range of second-generation
products which selectively enhance the growth rate of specific
types of bacteria and create the potential for targeted treatment
of a range of human diseases. The manufacturing scale up process
was delayed during COVID but completed in late 2022. Structural
and functional analysis has been taking place during 2023 to
determine novelty and the regulatory pathway.
Results
The Group’s results reflect its new structure following the listing of
ProBiotix Health (“PBX”) on the AQSE Growth Market on 31 March 2022.
The timing of the listing means that the accounts include the results of
PBX for the three months to the end of March 2022 when it became a
plc, after which PBX has been treated as an associate for accounting
purposes with its revenues and costs removed and only OptiBiotix’s
(44%) proportion of its profit and loss included in the Company’s
accounts. This makes comparisons with previous years difficult.
The results show revenue from continuing operations for the year of
£457K (2021: combined sales of £2.2m), reflecting both the separate
flotation of ProBiotix Health Plc and delays in the placement of orders
by our new larger partners, which entered the year with substantial
stocks from orders placed in late 2021, and then delayed re-ordering
because of the global economic uncertainty created by the Russian
invasion of Ukraine.
Administrative expenses (excluding non-cash items such as share-based
payments and amortisation) were £2.5m (2021: £2.1m), including
ProBiotix costs to the end of March and a number of one-off pre-listing
and recruitment expenses. This includes a one off bad debt provision of
£492K reflecting a more conservative approach to debtors and stock
considering the volatility of the external environment. We continue to
pursue outstanding debtors and believe a proportion of this provision
will be recovered in 2023.
The listing of PBX on AQSE materialised a previously unrecognised asset
allowing the Company to report a profit of £2.47m largely from the gain
on this
loss on revaluation of the
SkinBioTherapeutics plc (“SBTX”) shares. The Group retains a healthy
balance sheet with gross assets of £11.6m (2021: £20.1m) and net cash
at the year-end of £1.1m (2021: £2.0m).
investment offset by a
Post period end the Group sold 1,211,567 SBTX shares through Cenkos,
SBTX’s broker in February 2023 at an average price of 20.4p, generating
gross proceeds of £247K.
The Board senior management and
advisers
We have taken decisive action in December 2022 and in 2023 to reflect
the separate listing of PBX and reduce Board, management and advisory
costs in order to ensure each part of the business and subsequently the
Group return to operational profitability as soon as possible. These
actions include:
•
•
On 28 December 2022 the Company served three months’ notice
to terminate the joint brokership of Cenkos Securities plc.
Peterhouse Capital Limited continue as the Company’s sole broker.
René Kamminga, who was appointed CEO of OptiBiotix Ltd in
March 2021 left the business on 28 February 2023 and Group CEO
5
OptiBiotix Health Plc
Chairman’s and Chief Executive’s Report (continued)
Stephen O’Hara, who led the ProBiotix business in 2022, resumed
the role of CEO of OptiBiotix Ltd.
•
Re-engaged with major partners that underperformed against our
sales expectations in 2022, leading to:
•
•
All directors volunteered to accept a 20% reduction in their
remuneration from 1 January 2023.
With the departure of René the Company has twice as many
non-executive directors as executive directors. As a result Stephen
Hammond and Chris Brinsmead have agreed to step down at the
Company’s upcoming Annual General Meeting in July 2023.
We anticipate further restructuring of the board and management team
of OptiBiotix as ProBiotix Health Plc develops its independence and we
reduce the number of senior employees currently shared with ProBiotix
Health Plc under shared service agreements.
Looking ahead, the focus of the Company will be on investing in areas
that offer the highest return. To support that process and ensure a focus
on profitability the Company is developing profit and loss metrics for
each part of the business with the aim of each area (USA, India,
Ecommerce, B2B) reaching operational profitability, at least on a monthly
basis by the end of the calendar year.
Outlook
Our focus in 2023 is on looking forward and moving the Company to
operational profitability. We believe we will achieve this by a reduction
in central costs and by the promotion of sales, both direct to consumers
via ecommerce channels and through our existing partners delivering
on forecasts and bringing in new customers, particularly in the USA and
Asian markets. There has been progress in each of these areas as
outlined below which highlights some of the changes made since the
beginning of 2023 year and provides a progress update on each of the
business units. In the first part of 2023 we have:
•
•
Invested significantly in new e-commerce channels, including
Amazon in the UK, and Walmart in the USA, as well Tmall.com in
China. This has led to rapid sales growth (see E-commerce report)
which with continued investment we anticipate will continue
throughout 2023 and beyond.
Shifted our commercial focus to selling SlimBiome® Medical
sachets in Europe and SlimBiome shots in India and the Gulf states.
These are designed to be consumed before meals and help users
manage their weight by making consumers feel fuller for longer
and reducing cravings for sweet and savoury snacks. This is a highly
differentiated product which leverages growing market interest
in injectable appetite control drugs like semaglutide. SlimBiome®
Medical can be used with any weight management plan or calorie
restriction plan and complements rather than competes in a
crowded marketplace. The product enjoys high margins and
became a top-selling line on Amazon UK in 2023.
√
A significant new investment in marketing by Optipharm in
Australia, coupled with the launch online of their Optislim and
Optiman ranges containing our OptiBiome prebiotic fibre;
√ New orders from both The Hut Group and Holland & Barrett
in the UK and
√
A substantial increase in the number of Apollo pharmacies
and Holland and Barret shops in India selling GoFigure
products accompanied by a launch of products on Amazon
India on 16th May 2023.
We anticipate further orders from all these partners in the second half
of the current year.
•
•
•
Successfully launched new products, including our reformulated
WellBiome® functional fibre and mineral blend, which has been
made available via our own online store and on Amazon UK in
recent weeks.
In the last two months recruited three new partners in Asia who
have all placed initial orders for SlimBiome and a major US weight
management brand, with which we will be launching during the
second half of 2023, initially in Europe and later in the USA.
Published the results of a third human study on SlimBiome® which
demonstrated statistically significant benefits to appetite and
hunger regulation, with no safety, compliance or tolerance issues
reported by the participating volunteers. This study underlines the
effectiveness of a single dose of SlimBiome® in delivering hunger-
free weight loss by non-invasive means. This study was timely
given the growing consumer, media and pharmaceutical
company interest in this field following NICE’S approval of the
injectable drug semaglutide.
North America Sales and Business
Development
The Company has received a number of orders from US partners who
are owners of leading weight management or sports nutrition brands
in the USA. This is a major endorsement of the products and is the result
of presentations at conferences and exhibitions and numerous
customer visits by our US Business development Director, Zac
Sniderman. These will show in 2023 H1 accounts if manufactured and
delivered by the end of June or more likely H2 2023.
Discussions are advancing with a number of international Multilevel
Marketing (MLM) companies based in the USA with possible sales in H2
2023 for Asian markets. Discussions with an e-commerce brand have
continued at a steady pace in 2023 for a possible end of the year launch.
In addition to above we have late-stage discussion with a number of
Annual Report and Accounts 2022 6
Chairman’s and Chief Executive’s Report (continued)
e-commerce brands in both the US and Canada with potential sales in
H2 2023.
e-commerce platform, T-Mall, in China, particularly with sale of our
fruit gummies.
During the first half of 2023 we have seen strong sales growth of
Dietworks Appetite Control gummies in the USA in both e-commerce
channels and traditional retailers and we foresee increased sales in H2
2023 with the possibility of line extensions.
We are in discussions with two US partners who are interested in
purchasing WellBiome® with a potential US launch planned for Q4 2023.
The new projects would incorporate WellBiome in a final product for
healthy aging and hydration.
Consumer Health and Ecommerce sales
The OptiBiotix online website has been transitioned from a shop
window used to demonstrate product possibilities to partners to a
commercial website and optimised to
improve the customer
experience. The ecommerce business has opened up a number of new
channels to market including Amazon UK and Walmart USA to allow
customers from different locations/sites to have greater accessibility to
our products. Increasing awareness on platforms such as Amazon UK
have allowed brands such as SlimBiome to become a best seller within
their respective categories. Since the end of 2022 through to April 2023
we have focused more on promoting SlimBiome® Medical as a unique
product which reduces hunger and cravings which can be used as part
of any calorie restriction weight management plan. This has led to rapid
growth with the ecommerce business reaching operational profitability
in April and May 2023 with the highest monthly sales on record and a
sales increase of 1,200% (Figure 1). We are seeing good growth on the
In 2023 we plan to grow our brands presence and securing listings on
various channels including Amazon Europe and Amazon India whilst
pushing hard for sales and customer loyalty. The addition of WellBiome®
to the online store in May 2023 is part of a strategy to enhance the range
of different product offerings and products on the website throughout
2023. Current product line extensions planned for SlimBiome® include
a tomato and herb soup, a chicken soup, a Golden Syrup porridge, high
protein chocolate bars and an indulgent range.
As we add more products, open up channels to new markets, and bring
on new applications we should see continued growth within the
Ecommerce business in 2023 and beyond.
Our medical device registration for SlimBiome® Medical runs out in May
2024. Brexit has added complexity and additional cost in reregistering a
CE mark medical device with a £100k cost to renew the registration and
an annual maintenance cost of £20-30K per annum per device
(unflavoured and flavoured SlimBiome Medical). Given the CE mark is
only applicable in Europe and we have similar products non CE marked
in India and the Gulf states we are seeing this as an opportunity to
rebrand and broaden the offering with different flavours to a wider
customer group who may be dissuaded from purchasing a product with
a medical connotation.
OptiBiotix Health India
OptiBiotix Health India (“OHI”) was formed in November 2021 as a mid
to long term strategic investment in the world’s most populous nation
and forecast to have the highest population of medium to high level
7
OptiBiotix Health Plc
Chairman’s and Chief Executive’s Report (continued)
income customers in the world. Currently most middle-class consumers
live in the European Union (EU) and the United States, but over the next
decade, the majority will shift heavily toward India, with one in four
global middle-class consumers expected to reside in India by 2035
https://www.asianstudies.org/publications/eaa/archives/the-middle-
class-in-india-from-1947-to-the-present-and-beyond/.
The formation of OHI has helped OptiBiotix avoid high import taxes and
control the purchase and sale of ingredients (SlimBiome®) and final
product ( GoFigure®) manufactured and sold in India. This has increased
profit margins and given us a manufacturing base to export to other
countries in Asia with lower manufacturing and transport costs than
exporting from the UK. This will support future expansion and sales
growth in the region. The lower costs and The ‘created in UK and made in
India’ tag helps penetrate the market and makes the product
viable commercially.
We had two small customers and a large national player (Apollo
Hospitals “Apollo”) in India in 2022. During 2023 we have had orders from
a number of new customers and the launch of a new product range
called Slim-Pro by Health Bae, an emerging name in the multilevel
marketing channel (see https://health-bae.com ). Whilst these are small
first orders they are part of building the customer base and product
profile across India allowing us to build the business.
After a slow start following the launch of products with Apollos in
September 2022 we are now seeing momentum increase with the
number of stores selling GoFigure products increase month on month
with sales in April double that of March and continued strong growth
in May 2023, with a high returning customer rate. Apollo have agreed
to extend the product range in H2 2023. We are also pleased to be
developing a product for the Indian Market with a multinational
consumer goods company for launch later in the year.
The fundamentals of our marketplace remain very exciting, with
modulation of the human microbiome attracting ever-increasing
interest as the potential solution to a wide and growing range of life-
style related health challenges. Unique, innovative products take time
to gain market acceptance and our first-generation products are no
exception. We believe their strong science, clinical studies, and broad IP
portfolio together with the industry awards and great customer reviews
are starting to attract growing international recognition and with this
more sales opportunities.
After strong sales growth through 2019 (£745K), 2020(£1.5m) and 2021
(£2.2m) we believe 2022 was an unusual year for the industry and the
Company and that the actions we are taking to reduce costs and grow
sales will restore the Group to operational profitability, while broadening
our product and partner base, and increasing sales of final products
direct to consumers. These actions will reduce the risks of revenues in
future periods being impacted by timing differences in restocking or
delays in individual product launches or regulatory approvals.
Our expansion into USA and Asia, the proven credibility of our science,
the growing number of large partners, and a return on our investment
in 2023 from our sales teams give us continued confidence in the long-
term growth potential of the Group.
Whilst the Board are optimistic about the opportunities for the business
in 2023, we remain alert to the threats posed by the risks described in
the ‘principal risks and uncertainties’ section of the Strategic Report and
we note that future trading may be affected by these external factors.
The group’s mitigation strategies for these principal risks are also set out
in this section.
We are confident that our strategy will continue to deliver sales growth
in 2023 whilst the approaching commercialisation of our second-
generation SweetBiotix® family of products and microbiome modulators
offer exciting potential for future growth. This is in addition to the
Company having a continued exposure to the considerable growth
potential in probiotics and skincare through the Group’s shareholdings
in ProBiotix Health Plc and SkinBiotherapeutics plc.
N Davidson
Chairman
Stephen O’Hara
Chief Executive
23 June 2023
Annual Report and Accounts 2022 8
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 £1.052m as at 31 December 2022 and had no short-term borrowings.
The Board continues to monitor the balance sheet to ensure it has an
adequate capital structure.
Strategic Report
For the year ended 31 December 2022
REVIEW OF BUSINESS
A review of the business of the Group, together with comments on
future developments is given in the Chairman’s and Chief Executive’s
Reports on pages 3 to 8
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, attends international conferences and
has developed 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.
9
OptiBiotix Health Plc
Strategic Report (continued)
Principal Risks And Uncertainties
Market Risks
Impact
Mitigation
Brexit
New regulations, such as the Windsor protocol, could
add complexity and delays to operations.
The current consensus is that the new regulations will not
affect the regulations that are relevant to our business.
Economic
uncertainty caused
by war in Ukraine
Technology
Currency fluctuations could
affect profitability.
increase costs and
Currency fluctuations will impact both sales and costs. Our
initial product offering is not price-sensitive. Substantial cost
increases will be passed on.
Ongoing economic uncertainty, recession or an
escalation of the war in Ukraine may impact market
confidence, demand and prices.
The group is not directly affected by the war in Ukraine but the
Board monitor the general economic environment and
consider economic forecasts when taking key decisions.
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.
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. The
Company is able to sell its listed investments and raise further
equity and debt finance.
Legal Risks
Impact
Mitigation
Intellectual
Property litigation
Any claim brought against us would detract the
Company from its business and incur potentially
significant costs in defending its IP.
The Group engages with IP specialists to ensure we have a
strong position. To our knowledge we do not infringe on
any patents.
Operational Risks
Impact
Mitigation
Loss of key
personnel
Technology
Material adverse impact on the Group’s financial
condition and prospects.
Competitive remuneration packages, nil cost options to reduce
market volatility. The remuneration committee oversees the
level of remuneration to ensure it remains competitive
The Group is commercialising its technology to launch
new products in the consumer market.
The Group has
consumer demand.
identified a need and responded to
Commercialisation
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
recruited experienced management and
The Group
consultants to manage the process and negotiate contracts.
The manufacturing is outsourced.
Working capital
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.
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.
Annual Report and Accounts 2022 10
Strategic Report (continued)
KEY PERFORMANCE INDICATORS
Financial
Year to
31 December
2022
£’000
Year to
31 December
2021
£’000
Revenue
Operating Loss
Profit/(Loss) for the period
Cash as at 31 December
457 2,213
(2,489) (1,365)
2,587 6,261
2,007
1,052
During the year to 31 December 2022 the company has achieved a
number of key objectives to build shareholder value, these are laid out
in the Chairman’s and Chief Executive’s report on pages 3 to 8.
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 2022 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.
2.
3.
Number of Customers
Number of IP and trademark registrations
Rate of staff turnover
DIVIDENDS
A dividend in specie of Ordinary Shares in Probiotix Health Plc was
declared on 25 March 2022. The value of the dividend was
£10,257,999.99.
The legal title to the Dividend Shares was held by Global Prime Partners
Ltd acting as nominee on behalf of each of the Qualifying Shareholders
(“Nominee”) and an 'omnibus' share certificate in respect of the
Dividend Shares was issued and held by the Nominee. The Nominee
held the Dividend Shares on trust for each of the Qualifying Shareholders
for a minimum period of 9 months following admission to trading on
AQSE of the issued share capital of ProBiotix Health Plc (“Lock-up
Period”). The Lock-up Period was intended to contribute to the creation
of an orderly market in ProBiotix Health Plcs shares for a period after
admission to trading.
The shares were released to the Qualifying shareholders in January 2023.
FUTURE DEVELOPMENTS
The Chairman’s and Chief Executive Statement on pages 3-8 gives
information on the future outlook of the Group.
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
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 Research and development Director and the three
Non-Executive Directors.
11
OptiBiotix Health Plc
Strategic Report (continued)
Role of the Board:
Employees
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.
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.
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 2022 were related primarily to
•
•
•
the achievement in January 2022 of British Retail Consortium
accreditation, confirming our compliance with the Global Food
Safety Initiative (‘GFSI’) benchmark.
our entry into the sports nutrition market with the launch of
LeanBiome®, a patented blend of dietary and prebiotic fibres and
a trace mineral, developed to support athletes increase lean
muscle mass and to improve metabolism, gut health and satiety
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 Health
share held.
Annual Report and Accounts 2022 12
Social, Community and Human Rights
Issues
As an investment company with no employees the Company has no
direct social or community responsibilities or
impact on the
environment. The Company, however, takes into account the impact of
environmental, social and governance factors when selecting and
managing its investments within the context of its obligation to manage
investments in the financial interests of its shareholders.
ON BEHALF OF THE BOARD
S P O’Hara
23 June 2023
Strategic Report (continued)
•
•
significant progress by one of our US partners in the commercial
scale production of SweetBiotix®, with final product tested and
accepted and now awaiting further structural analysis and formal
taste testing to determine the regulatory pathway before
progressing to a launch ; and
Significant scientific and commercial progress in the development
of our microbiome modulators: a range of second-generation
products which selectively enhance the growth rate of specific
types of bacteria and create the potential for targeted treatment
of a range of human diseases.
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
The Company, through its corporate broker, Peterhouse Capital Limited,
has regular contact with its institutional shareholders. The Board
supports the principle that the Annual General Meeting be used to
communicate with private shareholders and encourages them to
participate. The Annual General Meeting is attended by Directors.
Greenhouse Gas Emissions
The Company has no physical assets (other than a small amount of stock
held by third parties), operations or premises. Consequently, it
consumed less than 40,000 kWh of energy during the year so a detailed
report on greenhouse gas emissions is not presented.
13
OptiBiotix Health Plc
Directors’ Report
For the year ended 31 December 2022
The Directors present their report and the audited financial statements
of the group for the year to 31 December 2022.
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
Non-executive Directors
R Davidson
M Christie
C Brinsmead
S Hammond
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 Company 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
11.20%
0.55%
0.16%
–
–
–
0.05%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6,099,135
192,500
50,000
82,500
358,722
50,000
50,000
£0.08
£0.02
£0.02
£0.02
£0.20
£0.02
£0.02
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 07 January 2022 and are exercisable at £0.02 at any time up 6 January 2032, subject to
vesting conditions. On the same day R Davison surrendered 385,000 options at £0.73 and was granted options at £0.02.
The share options held by M Christie were granted on 07 January 2022 and are exercisable at £0.02 at any time up 6 January 2032 , subject to
vesting conditions. On the same day M Christie surrendered 50,000 options at £0.95 and was granted options at £0.02.
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 share options held by S Kolyda were granted on 07 January 2022 and are exercisable at £0.02 at any time up 6 January 2032, subject to vesting
conditions. On the same day S Kolyda surrendered 82,500 options at £0.73 and was granted options at £0.02.
The share options held by C Brinsmead were granted on 07 January 2022 and are exercisable at £0.02 at any time up 6 January 2032 , subject to
vesting conditions.
The share options held by S Hammond were granted on 07 January 2022 and are exercisable at £0.02 at any time up 6 January 2032 , subject to
vesting conditions.
Annual Report and Accounts 2022 14
Directors’ Report (continued)
SUBSTANTIAL SHAREHOLDINGS
Substantial shareholdings include directors as at 20 June 2023 were
as follows:
Stephen O’Hara
Finance Yorkshire Seedcorn LP
% of shares issued
11.19
10.36
The share price per share at 31/12/2022 was £0.13 (31/12/2021: £0.46)
have had regard to cash generation and preservation options including
further cost mitigation, further sale of the Group's investment assets and
share issues where market conditions allow. Through one or a
combination of these measures, the Board are satisfied that the Group
can continue as a going concern in base case and downside scenarios.
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.
FINANCIAL INSTRUMENTS
The Group’s exposure to financial risk is set out in note 23 to the
financial statements.
STATEMENT OF DIRECTORS’
RESPONSIBILITIES
RESEARCH AND DEVELOPMENT
The Chairman’s and Chief Executive’s Report on pages 3-8 gives
information on the Group’s research and development activities.
DIRECTORS INDEMNITY INSURANCE
The Group hold a Directors and Officers policy managed by CFC
Underwriting Limited on behalf of Lloyds Syndicates with a limit of
liability in the aggregate of £1,000,000.
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 forecast maintenance cost, other administrative expenses,
as well as its ongoing research and development expenditure.
As part of the Group going concern assessment the Directors have also
reviewed a range of scenarios including those reflecting conditions less
favourable than the base case scenario. In such scenarios the Directors
15
15 OptiBiotix Health Plc
OptiBiotix Health Plc
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
in accordance with UK adopted
prepare financial statements
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:
•
•
•
•
suitable accounting policies and
select
them consistently.
then apply
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.
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 has indicated that it will not seek re-appointment as
the Company’s auditor at the Annual General Meeting as, following a
business reorganisation, the firm will provide audit services to clients
from another company in the group, Gravita Audit Limited. A resolution
to appoint Gravita Audit Limited as the Company’s auditor will be
proposed at the 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 9.
ON BEHALF OF THE BOARD
S P O’Hara
23 June 2023
Annual Report and Accounts 2022 16
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
‘company’) and its subsidiaries (together the ‘group’) for the year ended
31 December 2022 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 and company financial
statements is applicable law and UK-adopted International Accounting
Standards (IFRS) 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 company’s affairs as at 31 December 2022
and of the group’s profit for the year then ended;
the group financial statements have been properly prepared
in accordance with UK-adopted
International Accounting
Standards (IFRS);
the company financial statements have been properly prepared
in accordance with UK-adopted
International Accounting
Standards (IFRS); and
the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities 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 base case and
downside cash flow scenarios and assessment of the ability of the group
to realise its investment assets where needed to support the group’s
cash position.
17
OptiBiotix Health Plc
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 Group financial statements consolidate the results and balance of
Optibiotix Health plc, Optibiotix Limited, The Healthy Weight Loss
Company Limited, Optibiotix Health India Private Limited and, up to date
when control was lost, the group headed by Probiotix Health Plc.
We performed full scope audits of the financial information of Optibiotix
Health plc, Optibiotix Limited, Probiotix Health Plc, Probiotix Limited and
The Healthy Weight Loss Company Limited. We also performed targeted
financial procedures on the financial information of Optibiotix Health
India Private Limited. In total, the scope of audit work accounted for
100% of the group’s revenue and 100% of the group’s profit. 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
Loss of control of Probiotix Health Plc
During the year, the directors assessed that the group lost control
of Probiotix Health Plc as a result of a series of transactions which
the board considered to form a single set of linked transactions.
These transactions included the payment of a dividend in specie to
shareholders of the company, the listing on AQSE Growth Market of
Probiotix Health Plc, the automatic conversion of Probiotix Health
Plc’s convertible loan notes upon admission to trading and the
issue of new shares in Probiotix Heath plc. The result of these linked
transactions was that the group’s interest in Probiotix Health Plc
and Probiotix Limited fell from 100% to 44%.
The Board determined that the date of loss of control was the date
of Probiotix Health Plc’s admission to AQSE Growth, 31 March 2022.
As a result, the result of Probiotix Health Plc was consolidated up to
31 March 2022 at which time the group was deemed to lose
control and therefore all assets and liabilities of Probiotix Health
Plc were derecognised from the consolidated statement of
financial position.
The group reported a gain on disposal of Probiotix Health Plc as a
result of the recognition of the dividend in specie at fair value and a
remeasurement of the remaining interest at fair value.
Management assessed that the facts and circumstances after the
series of linked transactions resulting in the group having
significant influence but not control over Probiotix Health Plc.
Therefore from the date of loss of control the group’s interest in
Probiotix Health Plc has been recorded as an associate and has
been equity accounted.
We obtained the underlying documentation governing the series of
transactions resulting in the loss of control of Probiotix Health Plc,
including the Probiotix Admission Document to AQSE Growth, the
convertible loan note instrument, board minutes and resolutions in
respect of the dividend in specie and listing, shareholder registers
and other relevant documents.
We challenged management’s assessment of the nature of the
relationship between the group and Probiotix Health Plc after
31 March 2022 and reviewed key documents such as the
Relationship Agreement and board minutes of both groups and
examined the consistency of management’s arguments with the
wider evidence reviewed. We found the evidence to support the
judgement that the group did not control Probiotix Health Plc after
31 March 2022.
We reviewed the technical basis for the accounting treatment of
the loss of control including by reference to IFRIC 17 and IFRS 10 in
relation to dividends in specie and the treatment of retained
interests following a loss in control respectively. We found the
technical basis for the treatment of the series of linked transactions
to be reasonable.
We obtained and examined the application of cut off as at 31 March
2022 in respect of the deconsolidation of the Probiotix group from
that date with no material exception. We examined whether all
assets and liabilities attributable to Probiotix Health Plc and
Probiotix Limited were removed from the consolidated financial
statements and reviewed the group’s disclosures in respect of
the transaction.
We determined that this matter was a key audit matter due to the
significance of the financial impact on the group financial
statements and the multiple judgements applied by management
Annual Report and Accounts 2022 18
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
£92,000 (2021: £202,000)
£90,000 (2021: £178,000)
How we determined it
5% of adjusted profit
1% of gross assets, capped at group materiality
(2021: 1% gross assets)
(2021: 1% gross assets)
Rationale for
benchmark applied
The group reported an individually significant
gain on the loss of control of Probiotix Health Plc
and an individually significant loss on revaluation
of its interest in Skinbiotheraputics plc. These
gains and losses were adjusted for the purposes
of calculating materiality so as not to calculate an
unduly high materiality by reference to the
group’s trading operation.
We believe that gross assets is a primary measure
the
used by
performance of the company. Materiality was
restricted to group materiality.
in assessing
shareholders
We agreed with the Audit Committee that we would report to them
misstatements identified during our audit above £5,000 for the group
(2021: £10,100) and £5,000 for the company (2021: £8,900) 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.
1919
OptiBiotix Health Plc
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
not made; or
we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set
out on page 20, 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 company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either
intend to liquidate the group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of
the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these
financial statements.
Irregularities, including fraud, are instances of non-compliance with laws
and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud is detailed below.
Our approach to identifying and assessing the risks of material
misstatement in respect of irregularities, including fraud and non-
compliance with laws and regulations, was as follows:
•
•
•
•
the senior statutory auditor ensured the engagement team
collectively had the appropriate competence, capabilities and skills
to identify or recognise non-compliance with applicable laws
and regulations;
we focused on specific laws and regulations which we considered
may have a direct material effect on the financial statements or
the operations of the group and 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 group and company financial
including obtaining an
statements to material misstatement,
understanding of how fraud might occur, by:
•
•
making enquiries of management as to where they considered
there was susceptibility to fraud, their knowledge of actual,
suspected and alleged fraud;
considering the internal controls in place to mitigate risks of fraud
and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of
controls, we:
•
•
•
•
performed analytical procedures to identify any unusual or
unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether
judgements and assumptions made
in determining the accounting estimates were indicative of
potential bias;
investigated the rationale behind significant or unusual
transactions.
In response to the risk of irregularities and non-compliance with laws
and regulations, we designed procedures which included, but were not
limited to:
•
agreeing financial statement disclosures to underlying supporting
documentation;
20
Annual Report and Accounts 2022 20
Independent Auditor’s Report to the Members
of OptiBiotix Health Plc (continued)
•
•
•
reading
with governance;
the minutes of meetings of
those charged
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.
Use of this 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
23 June 2022
21
OptiBiotix Health Plc
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2022
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
(Loss)/Gain on investments
Profit on disposal of investments
Profit on disposal of subsidiary
Provision against associate valuation
Profit/(Loss) before tax
Taxation
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
Diluted profit/(loss) per share
All activities relate to continuing operations
The notes on pages 31 to 54 form part of these financial statements
Notes
Year ended
31 December 2022
£’000
Year ended
31 December 2021
£’000
457
(213)
244
(11)
(224)
(2,498)
(2,733)
(2,489)
–
–
–
(83)
(8,620)
16
21,647
(8,030)
2,441
146
2,587
2.587
–
2,587
2.93p
2.78p
2,213
(1,090)
1,123
(60)
(288)
(2,140)
(2,488)
(1,365)
(48)
–
(48)
–
7,502
88
–
–
6,177
84
6,261
6,261
–
6,261
7.15p
6.55p
6
5
5
11
11
11
11
11
7
8
8
Annual Report and Accounts 2022 22
Consolidated Statement of Financial Position
As at 31 December 2022
ASSETS
Non-current assets
Intangibles
Investments
Investment in associate
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 2022
£’000
As at
31 December 2021
£’000
9
11
11
12
13
7
14
15
16
16
16
16
16
16
17
18
19
1,540
5,022
3,129
9,691
178
521
106
1,052
1,857
11,548
1,824
2,958
939
1,500
–
3,684
10,905
–
10,905
278
278
365
–
365
643
11,548
2,641
13,651
–
16,292
102
1,553
191
2,007
3,853
20,145
1,759
2,537
928
1,500
93
11,320
18,137
35
18,172
602
602
552
819
1,371
1,973
20,145
These financial statements were approved and authorised for issue by the Board of Directors on 23 June 2023 and were signed on
its behalf by:
S P O’Hara
Director
Company Registration no. 05880755
The notes on pages 31 to 54 form part of these financial statement
23
OptiBiotix Health Plc
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
Share-
based Convertible Merger Non-
Called up Retained Share Payment Debt Relief Controlling
Share capital Earnings Premium reserve Reserve Reserve interest
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 31 December 2020 1,759 5,059 2,537 868 93 1,500 35
Profit for the year – 6,261 – – – – –
Share options and warrants – – – 60 – – –
Balance at 31 December 2021 1,759 11,320 2,537 928 93 1,500 35
Profit for the year – 2,587 – – – – –
Dividends – (10,258) – – – – –
Transfer on loss of control – – – – (93) – –
Transfer within reserves – 35 – – – – (35)
Issue of shares during the year 65 – 445 – – – –
Fundraising commission – – (24) – – – –
Share Options and warrants – – – 11 – – –
Total
equity
£’000
11,851
6,261
60
18,172
2,587
(10,258)
(93)
–
510
(24)
11
Balance at 31 December 2022 1,824 3,684 2,958 939 – 1,500 –
10,905
The notes on pages 31 to 54 form part of these financial statements
Annual Report and Accounts 2022 24
Consolidated Statement of Cash Flows
For the year ended 31 December 2022
Notes
Year ended
31 December 2022
£’000
Year ended
31 December 2021
£’000
Opening Cash
Operating activities
Operating loss
Amortisation
Share based payments
Movement on inventory
Decrease/(increase) on receivables
(Decrease)/increase on payables
Tax received
Net Proceeds for operating activities
Investing activities
Additions to intangibles
Cash disposed on loss of subsidiary
Proceeds on disposal of investments
Net
Financing activities
Net proceeds on Share issues
Net cash inflow from financing activities
Total movement
Cash and cash equivalents at end of period
1
The notes on pages 31 to 54 form part of these financial statements
2,007
(2,489)
224
11
(76)
1,116
(19)
124
(1,109)
(168)
(188)
25
(331)
485
485
(955)
1,052
865
(1,365)
288
60
82
(906)
82
194
(1,565)
(194)
–
2,901
2,707
–
–
1,142
2,007
25
OptiBiotix Health Plc
Notes to the Consolidated Statement of Cash Flows
For the year ended 31 December 2022
1. Cash and Cash Equivalents
Cash and cash equivalents
The notes on pages 31 to 54 form part of these financial statements
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
1,052
2,007
Annual Report and Accounts 2022 26
Company Statement of Financial Position
As at 31 December 2022
ASSETS
Non-current assets
Investments
Investment in associate
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 2022
£’000
As at
31 December 2021
£’000
Notes
11
11
13
13
14
15
16
16
16
16
17
7,008
3,212
–
10,220
25
865
890
11,110
1,824
2,958
1,500
939
3,806
11,027
83
83
11,110
15,732
–
318
16,050
66
1,705
1,771
17,821
1,759
2,537
1,500
928
11,056
17,780
41
41
17,821
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the Company
income statement.
The profit for the Company for the year was £3.008m (2021: £5.788m).
These financial statements were approved and authorised for issue by the Board of Directors on 23 June 2023 and were signed on
its behalf by:
S P O’Hara
Director
Company Registration no. 05880755
The notes on pages 31 to 54 form part of these financial statements
27
OptiBiotix Health Plc
Company Statement of Changes in Equity
For the year ended 31 December 2022
Called up
Share
capital
£’000
Share
Premium
£’000
Merger Share-based
Payment
reserve
£’000
Relief
Reserve
£’000
Balance at 31 December 2020
1,759
2,537
1,500
Profit for the year
Share options and warrants
–
–
–
–
–
–
Balance at 31 December 2021
1,759
2,537
1,500
Profit for the year
Dividends
Share options and warrants
Fundraising Commission
Issue of shares during the year
Balance at 31 December 2022
–
–
–
–
65
1,824
–
–
–
(24)
445
–
–
–
–
2,958
1,500
The notes on pages 31 to 54 form part of these financial statements
868
–
60
928
–
–
11
–
939
Retained
Earnings
£’000
5,268
5,788
–
Total
equity
£’000
11,932
5,788
60
11,056
17,780
3,008
3,008
(10,258)
(10,258)
–
–
11
(24)
510
3,806
11,027
Annual Report and Accounts 2022 28
Company Statement of Cash Flows
For the year ended 31 December 2022
Year ended
31 December 2022
£’000
Year ended
31 December 2021
£’000
Notes
Opening Cash
Operating activities
Operating loss
Share based payments
Decrease/(increase) on receivables
Impairment of investment in subsidiary
(Decrease)/increase on payables
Release of loan to subsidiary
Net Proceeds for operating activities
Investing activities
Net cash advances to subsidiary
Proceeds on disposal of investments
Net
Financing activities
Net proceeds on Share issues
Net cash inflow from financing activities
Total movement
Cash and cash equivalents at end of period
1
The notes on pages 31 to 54 form part of these financial statements
1.705
(1,482)
11
416
50
42
756
(207)
(1,143)
25
(1,118)
485
485
(840)
865
533
(2,749)
60
24
–
(22)
932
(1,755)
26
2,901
2,927
–
–
1,172
1,705
29
OptiBiotix Health Plc
Notes to the Company Statement of Cash Flows
For the year ended 31 December 2022
1. Cash and Cash Equivalents
Cash and cash equivalents
The notes on pages 31 to 54 form part of these financial statements
As at
31 December 2022
£’000
865
As at
31 December 2021
£’000
1,705
Annual Report and Accounts 2022 30
Notes to the Financial Statements
For the year ended 31 December 2021
1. General Information
OptiBiotix Health plc is a Public Limited Company limited by shares, 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, YO10 5DG. 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.
These financial statements present the results and balances of the Company and its subsidiaries (together, the ‘Group’) for the year
ended 31 December 2022.
2. Accounting Policies
Statement of compliance
The consolidated and parent 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.
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. The results are rounded to the nearest thousand.
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 forecast maintenance
costs, other administrative expenses and its ongoing research and development expenditure.
As part of the Group going concern assessment the Directors have also reviewed a range of scenarios including those reflecting
conditions less favourable than the base case scenario. In such scenarios the Directors have had regard to cash generation and
preservation options including further cost mitigation, further sale of the Group's investment assets and share issues where market
conditions allow. Through one or a combination of these measures, the Board are satisfied that the Group can continue as a going
concern in base case and downside scenarios.
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 current
political crises in Eastern 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
31
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
Standards, amendments and interpretations effective and adopted in 2022
New Standards and interpretations The following IFRS or IFRIC interpretations which are effective for the first time in the Group’s
accounting period to December 2022 have been considered by the Directors. Their adoption is not expected to, and will not, have
any material impact on the disclosures or on the amounts reported in this financial information.
Standards/interpretations Application
Standard or
Interpretation
Title
IFRS 3
IAS 16
IFRS 9
IAS 1
amendments Business Combinations
amendments Provisions, Contingent Liabilities and Contingent Assets
amendments Annual Improvements to IFRS
Standards 2018–2020 (fees in the 10 percent test for
derecognition of financial liabilities).
amendments Presentation of Financial Statements
Effective for annual
periods beginning
on or after
1 January 2022
1 January 2022
1 January 2022
1 January 2022
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 standards and the interpretations in future period will have no material impact
on the financial statements of the company.
2.1 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. The group controls an investee when it is exposed, or has rights, to variable
returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
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).
Annual Report and Accounts 2021 32
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
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 “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
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.
2.2 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:
2.2.1 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.
2.2.2 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.
33
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
2.2.3 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.
2.3 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.
2.4 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.
2.5 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.
2.6 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.
Annual Report and Accounts 2021 34
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
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.
2.7 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
2.8
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
2.9
intended to be held for the medium to long term. They are measured at fair value through profit or loss.
2.10 Trade receivables are initially measured at fair value and are subsequently measured at amortised cost less appropriate
provisions for credit losses. Such provisions are recognised in the income statement.
2.11 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.
2.12 Trade payables are not interest-bearing and are initially valued at their fair value and are subsequently measured at amortised
cost.
2.13
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
2.14
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
2.15
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).
2.16
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.
35
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
2.17
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.
2.18
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.
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 2022.
2.19
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.
2.20
Convertible debt reserve
The convertible debt reserve is the equity component of the convertible loan notes that have been issued.
2.21
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,
Annual Report and Accounts 2021 36
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
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.
2.22
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.
2.23
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.
2.24
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.
2.25
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.
37
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
2.26
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.
Useful life of intangible assets
Management have estimated that the useful life of the fair value of the patents acquired on the acquisition of Optibiotix
Limited in 2013 to be 20 years. Development costs that have been capitalized 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. The net book value of intangible
assets at the year- end was £1.540m (£2.641m).
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. The board looked at the current
order book going forward, the ongoing discussions with current customers and the recent new customers and concluded
that an impairment of the intangible assets was not applicable for the year to 31 December 2022. The net book value of the
intangible assets held at 31 December was £1.54m and an adjustment was made of £0.922m to reflect the transfer of 2 patent
families to Probiotix Health Plc as per note 9.
Recognition and measurement of the investment in Probiotix Health Plc
Management have reviewed the nature of the relationship with Probiotix Health Plc in line of the Group's interest moving
from 100% to 44% by 31 March 2022. Management have had regard to the requirements of IFRS 10 to consider the facts and
circumstances of the relationship between Optibiotix and Probiotix and not just the shareholding interest. In taking account
of a range of factors, including Optibiotix's minority representation on the Probiotix board and the terms of a relationship
agreement entered into between the parties, management have concluded that Optibiotix have significant influence over
Probiotix but not control. This remains under continuing review as facts and circumstances change.
As a result of the recognition of the Group's remaining 44% interest at 31 March 2022 at fair value the Group and Company
balance sheet report material investment holdings in Probiotix Health Plc.
The Directors have had regard to potential impairment of this asset. After taking account of share price movements
subsequent to the year end, and in particular after the end of the post-IPO lock-in period, the Directors concluded that an
impairment should be recorded to reflect the movement in share price from 21p at the time of IPO in March 2022 to 6p
which was the traded price on AQSE Growth after the lock-in period ended.
Annual Report and Accounts 2021 38
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
Whilst the Directors believe the share price of 6p is reflective of wider economic uncertainties and a difficult equities market
rather than any adverse impact in the group's trading prospects, the impairment has been recorded on the basis of a prudent
approach reflective of market conditions which the Board believe are short term in nature. The Board consider that recently
depressed share valuations across various international markets reflect significant underpricing and are not reflective of
asset values.
3. Segmental Reporting
In the opinion of the directors, the Group has one class of business, in four geographical areas being that of identifying and developing
microbial strains, compounds and formulations for use in the nutraceutical industry. The Group sells into to four highly interconnected
markets, all costs assets and liabilities are derived from the UK location.
Revenue analysed by market
Probiotics
Functional Fibres
Year ended
31 December 2022
£’000
Year ended
31 December 2021
£’000
24
433
457
1,100
1,113
2,213
Following the loss of control of Probiotix Health Plc on 31 March 2022, all group revenues have been derived from functional fibres.
Revenue analysed by geographical market
UK
US
India
Rest of world
Year ended
31 December 2022
£’000
Year ended
31 December 2021
£’000
136
100
61
160
457
648
827
–
738
2,213
During the reporting period one customer represented £100k (21.9%) of Group revenues. (2021: one customer generated £727k
representing 32.9% of Group revenues).
39
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
4. Employees and Directors
Wages and salaries
Directors’ remuneration
Social security costs
Pension costs
The average monthly number of employees during the period for was as follows:
Group
Directors
Research and development
Company
Directors
Directors' remuneration was as follows:
Directors’ remuneration
Directors’ share based payments
Benefits in kind
Bonus
Pension
Total emoluments
Emoluments paid to the highest paid director
Year ended
31 December 2022
£’000
Year ended
31 December 2021
£’000
522
354
66
35
977
636
494
83
44
1,257
Year ended
31 December 2022
No.
Year ended
31 December 2021
No.
6
3
9
6
6
6
3
9
6
6
Year ended
31 December 2022
£’000
Year ended
31 December 2021
£’000
354
12
5
–
10
381
151
507
33
5
70
17
632
262
Annual Report and Accounts 2021 40
Notes to the Financial Statements (continued)
4. Employees and Directors (continued)
Directors’ remuneration
Details of emoluments received by Directors and key management of the Company for the year ended 31 December 2022 are
as follows:
Directors
Remuneration Share based Pension
and fees payments Costs
£’000 £’000 £’000
Benefits
in Kind Total
£’000 £’000
S P O’Hara 143 – 4
S Christie 25 – –
R Davidson 55 – –
S Kolyda 81 – 6
C Brinsmead 25 6 –
S Hammond 25 6 –
Total 354 12 10
4 151
– 25
– 55
1 88
– 31
– 31
5 381
Total
2021
£’000
262
33
72
128
25
21
541
Benefits in kind relate to medical insurance. The number of directors to whom retirement benefits were accruing was 2 (2021: 2).
5. Net Finance Income/(Costs)
Finance Income:
Bank Interest
Finance Cost:
Loan note interest
Net Finance Income / (Costs)
Year ended
31 December 2022
£’000
Year ended
31 December 2021
£’000
–
–
–
–
(48)
(48)
41
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
6. Expenses – analysis by nature
Research and development
Directors’ fees & remuneration (Note 4)
Salaries, pension and social security
Auditor remuneration – Group and Company audit fees
Auditor remuneration-Audit of subsidiaries
Auditor remuneration – non audit fees:tax compliance
Auditor remuneration – non audit fees: other assurance
Brokers & Advisors
Advertising & marketing
Share based payments charge
Bad debt provision
Amortisation of patents and development costs
Patent and IP costs
Consultancy fees
Legal and professional fees
Public Relations costs
Travel costs
Other expenses
Total administrative expenses
7. Corporation Tax
Corporation Tax
Corporation tax credit
Deferred tax movement
Total taxation
Year ended
31 December 2022
£’000
Year ended
31 December 2021
£’000
68
354
623
25
15
8
2
122
84
12
458
224
88
378
12
80
102
78
64
469
512
23
22
7
3
209
42
60
288
115
262
28
68
16
213
2,733
2,488
Year ended
31 December 2022
£’000
Year ended
31 December 2021
£’000
(38)
(108)
(146)
(75)
(9)
(84)
Annual Report and Accounts 2021 42
Notes to the Financial Statements (continued)
7. Corporation Tax (continued)
Analysis of tax expense
No liability to UK corporation tax arose on ordinary activities for the year ended 31 December 2022 nor for the year ended
31 December 2021.
Profit (Loss) on ordinary activities before income tax
Loss on ordinary activities multiplied by the standard rate of corporation tax in
UK of 19% (2021 – 19%)
Effects of:
Disallowables
Income not taxable
Accelerated depreciation
R&D tax credit claimed
Amortisation
Revenue items capitalised
Other timing differences
Unused tax losses carried forward
Tax credit
Year ended
31 December 2022
£’000
Year ended
31 December 2021
£’000
2,442
466
166
(1,068)
–
(38)
28
–
–
408
(38)
6,177
1,174
14
(1,546)
–
(75)
33
(37)
19
343
(75)
The group has estimated losses of £10.8m (2021: £8.41m) in respect of which a deferred tax asset of £2.7m (2021: £2.1m) has not
been recognised due to the uncertainty of future taxable profits. The unrecognised deferred tax asset has been assessed by reference
to a rate of 25% which is the UK headline corporation tax rate from 1 April 2023.
The Group submits claims for R&D tax credits in respect of its research and development activities in respect of microbiome
modulators and similar products relating to the exploitation of its patent portfolio and potential new patents arising from scientific
research performed by group employees and its partners. Whilst the Board are confident of recovery of the estimated R&D tax credit,
there is no certainty that the receivable will be recoverable until HMRC have approved the claim and the enquiry window is closed.
However, based on the group's history of successful claims over a number of years, the Board are satisfied that the tax receivable is
recoverable and appropriately recorded.
Current tax asset – Group
Balance brought forward
Received during the year
Prior year adjustment
Research & development tax credit claimed
43
OptiBiotix Health Plc
2022
£
191,249
(123,663)
–
37,500
105,086
2021
£
310,435
(194,663)
477
75,000
191,249
Notes to the Financial Statements (continued)
8. Earnings per share
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:
2022
Basic and diluted EPS
Basic EPS
Diluted EPS
Earnings
£’000
2,587
2,587
Weighted average
Number of shares
No.
88,279,952
93,213,179
2021
Basic and diluted EPS
Basic EPS
Diluted EPS
Earnings
£’000
6,261,029
6,261,029
Weighted average
Number of shares
No.
87,574,152
95,536,395
Profit per-share
Pence
2.93
2.78
Profit per-share
Pence
7.15p
6.55p
As at 31 December 2022 there were 7,182,907 (2021: 7,632,907) outstanding share options and NIL (2021: 329,336) outstanding
share warrants.
Annual Report and Accounts 2021 44
Notes to the Financial Statements (continued)
9.
Intangible assets
Group
Cost
At 31 December 2020
Additions
Disposals
At 31 December 2021
Additions
Disposals
At 31 December 2022
Amortisation
At 31 December 2020
Amortisation charge for the year
At 31 December 2021
Amortisation charge for the year
Disposals
At 31 December 2022
Carrying amount
At 31 December 2022
At 31 December 2021
Development
Costs and
Patents
£’000
3,672
193
–
3,865
46
(1,370)
2,541
937
288
1,225
224
(448)
1,001
1,540
2,640
The company had no intangible assets during the reporting period.
Development costs and patents represent cost capitalised in respect of the Group’s intellectual property portfolio and includes the
costs of registering and maintaining patents as well as capitalised development costs. All intangible assets relate to the Group’s
principal activities.
Disposals in the year relate to two patent families relating to probiotic patents owned by Probiotix Limited and therefore which
were derecognised upon the group's loss of control of Probiotix Health Plc. This disposal has formed part of the gain on loss on
disposal reported in the income statement.
45
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
10. Property, plant and equipment
Group
Cost
At 31 December 2020
Additions
Disposals
At 31 December 2021
Additions
Disposals
At 31 December 2022
Depreciation
At 31 December 2020
Charge for the year
At 31 December 2021
Charge for the year
At 31 December 2022
Carrying amount
At 31 December 2022
At 31 December 2021
£
8,461
–
–
8,461
–
–
8,461
8,461
–
8,461
–
8,461
–
–
The company had no fixed assets during the reporting period.
11. Investments
Group
Set out below is the investment in Skinbiotherapeutics PLC. The investment was treated as an associate of the group until 2 November
2020, after which time the shareholding dropped to 24.65% and recalculated as an equity investment. The Group records its
investment in Skinbiotheraputics plc at fair value and is remeasured by reference to its closing price on AIM at each reporting date.
The share price at 31 December 2022 was 15.5p.
During the year, a small holding of shares was disposed to generate proceeds of £25k with original cost of £8k.
Investments
At the beginning of the period
Revaluations
Disposal of shares during year
At 31 December
2022
£’000
13,651
(8,620)
(9)
5,022
2021
£’000
8,962
7,501
(2,812)
13,651
Annual Report and Accounts 2021 46
Notes to the Financial Statements (continued)
11. Investments (continued)
Investment in Associate
On 31 March 2022, ProBiotix Health Plc ( “PBX”) the parent company of ProBiotix Limited listed on the AQSE Growth Market. The
listing of PBX on AQSE, together with the issue of a dividend in specie and issue of new shares, means that PBX is now considered
an associate for accounting purposes with its revenues and costs removed post listing and only OptiBiotix’s (44%) proportion of its
profit and loss included in the Group’s accounts under the equity method of accounting. The step-down from being a subsidiary to
an associate resulted in the revaluation of the remaining interest held in PBX at the listing price and a gain on disposal of a subsidiary
recognised in the income statement. A gain of £21.647m was recorded in the income statement.
An assessment was undertaken to assess whether the Company had defacto control over PBX during the period considering Board
representation, financing arrangements , the Relationship agreement and the other shareholdings in PBX. Based on the assessment
it was concluded that the Company only had significant influence and that PBX was an associate in the period. The Relationship
agreement sets out costs that are being incurred by the Group that are being recharged to PBX.
At 31 March 2022 the Group held 53,533,333 shares in Probiotix Health Plc, valued at the IPO price of 21p resulting in a deemed cost
of investment in associate of £11.24m. As an associate, the Group's investment is equity accounted and the Group's 44% share of
loss was deducted from this carrying value.
Investment in Associate
Investments
At the beginning of the period
Additions
Deemed cost on reclassification from subsidiary
Impairment in the period
Share of result for the period (see below)
At 31 December
2022
£’000
–
11,242
(8,030)
(83)
3,129
2021
£’000
–
–
–
–
–
PBX is registered in United Kingdom and is in the Health food sector.
Set out below is financial information on PBX set out in its IFRS financial statements for the period from incorporation on
4 November 2021 to 31 December 2022.
Revenue
Loss from continuing operations
Total comprehensive income
Current assets
Current Liabilities
Non-current liabilities
44% share of total comprehensive loss.
47
OptiBiotix Health Plc
2022
£’000
1,308
(237)
(189)
2,311
(307)
(89)
(83)
Notes to the Financial Statements (continued)
11. Investments (continued)
Company Investments
Listed Investments
At the beginning of the period
Additions
Revaluations
Disposal of shares during year
Investment in subsidiaries
At the beginning of the period
Additions
Impairment
Disposals
At 31 December
Company Investment in Associate
At the beginning of the period
Reclassification to associate
Provision against value of associate
At 31 December
2022
£’000
13,651
–
(8,620)
(9)
5,022
2,081
16
(50)
(61)
1,986
7,008
2022
£’000
60
11,182
(8,030)
3,212
2021
£’000
8,962
–
7,501
(2,812)
13,651
2,081
–
2,081
15,732
2021
£’000
–
–
–
–
The Company holds listed investments at fair value, and investments in subsidiaries and associates at cost less impairment. The fair
value of the Company's investment in Probiotix Health Plc upon losing control was set as deemed cost.
The Directors have had regard to potential impairment of this group's investment in Probiotix. After taking account of share price
movements subsequent to the year end, and in particular after the end of the post-IPO lock-in period, the Directors concluded that
an impairment should be recorded to reflect the movement in share price from 21p at the time of IPO in March 2022 to 6p which
is an approximation to the traded price on AQSE Growth after the lock-in period ended.
Whilst the Directors believe the share price of 6p is reflective of wider economic uncertainties and a difficult equities market rather
than any adverse impact in the group's trading prospects, the impairment has been recorded on the basis of a prudent approach
reflective of market conditions which the Board believe are short term in nature. The Board consider that recently depressed share
valuations across various international markets reflect significant under pricing and are not reflective of asset values.
An impairment charge of £8.03m has been recorded in the income statement as a separate line item. The impairment assessment
was made by reference to fair values using Level 1 inputs on the Fair Value Hierarchy, being observable traded prices on the AQSE
Growth exchange.
During the period an impairment of £50,000 was raised against the Company's investment in The Healthy Weight Loss Company
Limited as the board intend to wind up this company which has minimal assets and no trading activity.
Annual Report and Accounts 2021 48
Notes to the Financial Statements (continued)
11. Investments (continued)
The entities 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.
As at 31 December 2022 the Company directly held the following subsidiaries:
Name and Country of
Registered office address incorporation
of company Principal activities and place of business
OptiBiotix Limited Research & Development United Kingdom
Innovation Centre
Innovation Way, Heslington
York, YO10 5DG
Optibiotix Health India Health foods India
Private Limited
House NO.243, Mcd Colony,
Vivekanand Puri Sarai,
Rohilla City, Delhi CITY, DELHI,
North Delhi, Delhi, India, 110007
Proportion of
equity interest
100% of ordinary shares
100% of ordinary shares
The Healthy Weight Loss Health foods United Kingdom
Company Limited
Office 7, 35/37 Ludgate Hill,
London, England, EC4M 7JN
68% of ordinary shares
12. Inventories
Group Company
2022
£’000
2022
£’000
2021
£’000
Finished goods 178
102
–
During the period £213k (2021: £1,090k) has been expensed to the income statement.
13. Trade and other Receivables
Group Company
2022
Non-current £’000
2022
£’000
2021
£’000
Amounts owed by group undertakings –
–
Current
Accounts receivable 379
Other receivables 131
Prepayments and accrued income 11
521
49
OptiBiotix Health Plc
–
–
1,415
82
56
1,553
–
–
–
17
8
25
2021
£’000
–
2021
£’000
318
318
–
40
26
66
Notes to the Financial Statements (continued)
13. Trade and other Receivables (continued)
During the period 1 January 2022 to 31 March 2022 Optibiotix Health PLC loaned Probiotix Limited £150,000, to finance working
capital costs in the period up to the listing of Probiotix Health Group plc. During the year £203,835 was repaid. The balance due to
Probiotix Limited at 31 December 2022 of £10,137 (2021 owing: £53,835) was repaid post year end. There was no interest charged
during the year.
During the year Optibiotix Health PLC loaned Optibiotix Limited £1,220,000 to finance working capital costs. Optibiotix Limited
recharged Optibiotix Health PLC £373,426 for salary costs. The balance at the year end of £846,574 (2021, £931,903) was cancelled.
There was no interest charged during the year. This does not impact on the consolidated Group accounts.
During the year Optibiotix Limited recharged Probiotix Health Plc £23,139 for directors’ fees. Optibiotix Limited received a recharge
from Probiotix Health Plc for admin costs of £148. The balance at the year end of £22,991 was received after the year end. There was
no interest charged during the year.
During the year Optibiotix Limited transactions with Probiotix Limited were as follows:
•
•
•
£440,663 for salaries and administration costs;
£60,676 income received on behalf of Probiotix limited; and
£544,177 repayments received.
There was no interest charged during the year. The remaining balance of £30,146 was received after the year end.
14. Cash and Cash Equivalents
Group Company
2022
£’000
2022
£’000
2021
£’000
Cash and bank balances 1,052
2,007
865
All cash is held in demand deposits with large UK banks.
15. Called Up Share Capital
Issued share capital comprises:
Ordinary shares of 2p each – 91,190,661 (2021: 87,940,601)
During the period the Company issued ordinary shares of £0.02 each listed below:
Exercise of warrants at exercise price of £0.08
Exercise of warrants at exercise price of £0.08
Issue of equity via subscription at a price of £0.16
2022
£’000
1,824
1,824
Date
27/01/2022
09/03/2022
05/12/2022
2021
£’000
1,705
2021
£’000
1,759
1,759
Number
125,000
60
3,125,000
3,250,060
Annual Report and Accounts 2021 50
Notes to the Financial Statements (continued)
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 net of
distributions paid.
Share based payment reserve represents the cumulative amounts charged in respect of unsettled warrants and options issued.
17. Trade and other payables
Group Company
2022
Current £’000
2022
£’000
2021
£’000
Accounts Payable 191
Accrued expenses 70
Other payables 17
Total trade and other payables 278
424
175
3
602
34
39
10
83
2021
£’000
18
23
–
41
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% (2021: 25%).
The movement on the deferred tax account is as shown below:
At 31 December
Movement in the period
At 31 December
2022
£’000
552
(187)
365
2021
£’000
561
(9)
552
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 over the timing of future taxable profits. Further details of available losses are set
out in note 7.
19. Convertible Loan Notes
The Company’s former subsidiary Probiotix Health Plc issued 1,025,000 floating rate convertible loan notes (CLN) for £1,025,000 on
11 December 2018. The notes were 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 had subscribed 250,000 of the CLN for £250,000
The loan notes were converted as part of the listing process for Probiotix Health Plc on 31 March 2022.
51
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
20. Related Party Disclosures
Transactions and balances with Probiotix Group are set out in note 13.
21. Ultimate Controlling Party
The Board consider that there is no overall controlling party.
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 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
2022 2021 2022
No. No. £
2021
£
Outstanding at the beginning of the period 7,632,907 8,032,907 0.18
Granted during the period 500,000 – 0.02
Forfeited/cancelled during the year (950,000) (400,000) 0.70
Exercised during the period – – –
Outstanding at the end of the period 7,182,907 7,632,907 0.092
0.21
–
0.785
–
0.17
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.
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 2020 vesting conditions dictate that the options will vest if certain revenue conditions are met.
For share options issued in 2022 The Company has agreed with a number of option holders to surrender their existing options in
return for Nominal Value Options over half the number of shares of their existing options, which will be subject to a combination of
performance and time-based vesting criteria. This ensures a continued focus on commercial revenues and shareholder value creation.
New options will be granted on a similar basis going forward. Options granted to non-executive directors will be subject to time-
based vesting.
The share options outstanding at the period end had a weighted average remaining contractual life of 830 days (2021: 1,241 days)
and the maximum term is 10 years.
The share price per share at 31/12/22 was £0.13 (31/12/2021: £0.46).
Annual Report and Accounts 2021 52
Notes to the Financial Statements (continued)
22. Share Based payment Transactions (continued)
Where share options were cancelled in the period and replaced with share options with revised terms, the Board have considered
this set of transactions as a modification of share based payment arrangements and have therefore considered whether any
incremental value arises as a result of the grant of modified awards. Having performed an assessment the Board have concluded
that no incremental value fair is required and therefore no charge has been recognised. In respect of replacement options which
include market based vesting conditions in respect of revenue targets, the Board have determined that the value of this proportion
of shares have immaterial value in light of the Group's results for the 2022 accounting period in which they were granted.
(i) Warrants
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
2022 2021 2022
No. No. £
2021
£
Outstanding at the beginning of the period 329,336 329,386 0.08
Exercised (125,060) – 0.08
Cancelled 204,276 – –
Outstanding at the end of the period – 329,386 –
0.08
0.08
0.08
There were no warrants in issue at 31 December 2022.
A charge of £Nil (2021: £60,288) has been recognised during the year for the share based payments over the vesting period.
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 in respect of its financial statements are liquidity risk and credit 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.
Interest risk
The Group is not exposed to significant interest rate risk as it has limited interest bearing liabilities at the year end.
The group's financial assets do not bear interest.
53
OptiBiotix Health Plc
23. Financial Risk Management Objectives and Policies (continued)
Credit Risk
The Group try to limit the credit risk by dealing with larger companies and also asking new smaller customers to provide a deposit
with the purchase order.
Management have regard to credit exposures when entering into new contracts and seek to agree settlement terms on all contracts.
Credit exposure is regularly monitored by management and any overdue debts are followed up as part of the group's credit control
procedures. Where a debt becomes significantly overdue, management have regard to credit loss provisions to reflect the existence
of expected credit losses, taking account of forward looking information as well as the pattern of cash collections for that category
of customer.
At 31 December 2022 one material debt is overdue, however management have negotiated revised terms and expect to resolve
the outstanding amount within 2023.
Having taken account of the nature of the relationship with the customer and the pattern of repayments since the receivable was
raised, the Directors expect the amount to be recovered in full, however a credit loss provision of £60,000 has been created to reflect
the impact of wider economic uncertainties over the projected collection period.
The Board consider a default to have occurred when a receivable passes 60 days beyond agreed credit terms, at which point regard
is had to the specific characteristics of the debtor in assessing exposure to material credit risk and therefore the requirement to
create a loss provision.
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 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
Subsequent to the period end, the share price of the group's associate Probiotix Health Plc was trading in the region of 5-7p,
representing a material reduction since the IPO price of 21p at 31 March 2022. The Directors have had regard to the financial reporting
impacts and further detail is given in Note 11.
Annual Report and Accounts 2021 54
Notice of Annual General Meeting
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 2023 at 11:00 am for the following purposes:
1.
2.
3.
4.
To receive the Company’s Report and Accounts for the year ended 31 December 2022.
To re-elect Sofia Kolida, who retires by rotation, as a Director.
To re-elect Sean Christie, who retires by rotation, as a Director.
To appoint Gravita Audit Limited 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 £607,937.57 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 2024,
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)
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;
(b)
the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to an aggregate nominal
value of £547,143.82 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 2024, 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 2023
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.
2.
3.
4.
5.
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.
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 in note 5 below.
In order for a proxy appointment to be valid the proxy must be received by Share Registrars Limited by 11:00 am on
24 July 2023.
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 11:00am on 24 July 2023 (“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.
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do
so for the General Meeting and any adjournment(s) thereof by using the procedures described in the CREST Manual. 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. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate
CREST message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with CRESTCO Limited’s
specifications and must contain the information required for such instructions, as described in the CREST Manual. The
message, regardless of whether it relates to the appointment of a proxy or to 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 the issuer’s agent 7RA36 by the
latest time(s) for receipt of proxy appointments specified above. 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 CRESTCO Limited
does not make available special procedures in CREST for any particular messages. 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 or her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to
ensure that a message is transmitted by means of CREST 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.
Annual Report and Accounts 2021 56
Explanatory Notes to the Notice of Annual General Meeting (continued)
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 2022.
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 £607,937.57 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 £547,143.82. 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
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All rights reserved.