optibiotix.com
ANNUAL REPORT AND ACCOUNTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Company Number: 05880755
Company Number: 05880755
Contents
Company Information
Chairman’s Report
Chief Executive’s Report
Strategic Report
Directors’ Report
Independent Auditor’s Report
2
3
4
10
15
18
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Financial Position
Consolidated Statement of
Changes in Equity
23
24
25
Consolidated Statement of Cash Flows
26
Notes to the Consolidated Statement
of Cash Flows
27
Company Statement of Financial Position 28
Company Statement of Changes in Equity 29
Company Statement of Cash Flows
30
Notes to the Company Statement of
Cash Flows
Notes to the Financial Statements
31
32
1
OptiBiotix Health Plc
Company Information
Directors: S P O’Hara
R Davidson
M Christie
S Kolyda
G Myers
Secretary: Mark Collingbourne
Registered number: 05880755 (England & Wales)
Registered office: Innovation Centre
Innovation Way
York
YO10 5DG
Auditors: Gerald Edelman LLP
73 Cornhill
London
EC3V 3QQ
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 2023 2
Chairman’s Report
For the year ended 31 December 2023
This year has seen the Group successfully returned to sales
growth under the renewed leadership of its founder Stephen
O’Hara, who returned to the role of CEO of OptiBiotix Limited in
March 2023. In that time we have secured a number of new
corporate partners to help develop sales of our first-generation
products in key strategic markets like the USA and Asia,
increased direct to consumers sales through ecommerce
channels and reduced operating costs. Our second-generation
products are now approaching commercialisation, offering
potential additional future growth for the Company. The
positive trajectory re-established during the year has continued
into 2024. With new corporate partners in new territories, strong
ecommerce growth, reduced SlimBiome® ingredient stock levels
held by Maxum and Cambridge Commodities, a strong balance
sheet (circa £9.4m at 31 December 2023) and a successful
fundraise in 2024, the financial strength of the Group provides
shareholders with a robust platform for growth going forward.
Strategy and business development
From the outset, the business has had a clear strategic focus on
developing unique products with functional benefits in high growth
markets around the world, and balancing risk and reward by building
sales of first-generation products while developing more innovative
second-generation products with greater potential.
The CEO reports in detail below on the actions we have taken during
the year to restore the Group to sales growth through more active
management of existing key accounts, increasing the number of
partners in key strategic markets, and investing to increase direct sales
to customers through ecommerce channels in the UK and subsequently
internationally.
Results
The results show that after a very poor start to 2023 management
changes in spring led to a 41% increase in sales and a 30% decrease in
costs in 2023, despite one off termination costs of £153k. With improved
sales and tighter financial control operating losses for 2023 reduced by
33% from £2.4m to £1.6m.
The Board
As noted in the last annual report Rene Kamminga, who was appointed
CEO of OptiBiotix Ltd in March 2021, and joined the Board of the Group
in July 2022, left the business in February 2023 when Stephen O’Hara
resumed the role of CEO at OptiBiotix Ltd. As outlined in the CEO report
the Company took the opportunity to streamline its board and reduce
advisor costs to move the business towards profitability. To support the
management team Graham Myers joined the Board on 1 December
2023 as Finance Director, a part-time role in which he works closely with
the OptiBiotix team to focus on driving each business unit to
profitability.
Outlook
The recovery of sales established in 2023 have continued into the
current year with the agreement with Morepen in India, encouraging
discussion with a number of US corporates, and strong e-commerce
growth, any of which having the potential to transform the business in
2024 and beyond. As the Chief Executive reports in more detail below,
we have secured additional agreements to grow sales of our first-
generation products in a number of key strategic markets (e.g. USA,
Asia), successfully broadened our product portfolio, and reached an
exciting stage in the commercialisation of our second-generation sugar
replacement SweetBiotix® and MicroBiome Modulators.
The actions we took during 2023 have put the Group back on a firm
growth path and the Company looks forward to reporting further
progress in the year ahead. We also look forward to realising the
substantial potential value of our second-generation SweetBiotix® family
of products and microbiome modulators as
these achieve
commercialisation.
N Davidson
Chairman
28 June 2024
333
OptiBiotix Health Plc
Chief Executive’s Report
For the year ended 31 December 2023
Since the restructuring of our senior management team in
Spring 2023, the Group has focused on restoring sales growth
and working towards profitability through the more active
management of existing accounts, broadening its partner base,
and investing in ecommerce channels, while reducing costs. This
is all part of a plan to take multiple products in the microbiome
space to a global marketplace. Our first-generation products
now enjoy widespread acceptance in international markets,
helping us to reach new agreements with a number of well-
known corporate partners and to launch new products in more
territories expanding our customer base. Our online sales are
growing strongly, particularly in China and we are looking to
replicate this approach in other high growth territories such as
India in 2024. We have also reached an exciting stage in the
commercialisation of our second-generation products
SweetBiotix® as a bulk sugar replacement and in finished
products and seeing growing interest in our microbiome
modulators. The Group remains financially robust with a strong
balance sheet (circa £9.4m at 31 December 2023) and no debt.
We believe that the Group is now at a strategic inflection point
having made strong progress in 2023 and early 2024 on its
stated aims of establishing sales in major international markets
like the USA, China, and India. As partner and ecommerce sales
in these territories grow, we launch new products like
WellBiome® with existing partners, add new partners in the USA
and India, and bring our second generation products to market,
we have a number of opportunities, any one of which would be
transformational for the Company and shareholders alike, and
collectively change the future of the business.
Strategic overview
OptiBiotix Health PLC (OPTI) is a 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 an
extensive portfolio of microbiome assets in this field including prebiotic
products like SlimBiome®, WellBiome®, SweetBiotix® and Microbiome
modulators within
through
SkinBioTherapeutics PLC (SBTX) and probiotics through ProBiotix Health
plc (PBX). These are both separately listed companies in which OptiBiotix
has a shareholding. These create a diverse portfolio of opportunities in
an emerging area of healthcare which is of growing interest to
consumer markets around the world.
core business,
skincare
its
Our strategic approach has been to target global markets with highly
differentiated, clinically proven and patented products. Whilst ambitious,
more costly and time consuming than commercialising in local markets
it recognises the potential scale of the opportunity. The strategy has
been designed to reduce risk and maximise opportunities for investors
by recognising the challenges inherent in bringing new technologies
and products to a naturally conservative global food market, where
consistency and risk avoidance are key, and the acceptance of new
products is notoriously slow.
In addition to founding and developing three distinct companies, we
have layered our development portfolio by creating both first-
generation products (SlimBiome® and WellBiome® in prebiotics and
LPLDL® in probiotics) and second-generation products (SweetBiotix®
and Microbiome modulators). This has allowed us initially to build sales
and awareness of the Company and its functional ingredients through
its first-generation products while developing the riskier and more
innovative second-generation products that offer potentially greater
upside for investors.
The development of three distinct companies (OPTI, SBTX and PBX) with
similar fundamental science but different applications and markets
provides investors with multiple plays in the emerging microbiome
market, both reducing their risk and providing significant potential gains
if one or more new products is successfully brought to market.
Placing these companies separately on public markets creates tangible
assets which can potentially be disposed of to pay shareholders an ad
hoc dividend, as with the £10.25m dividend issue to OPTI shareholders
on the listing of PBX in March 2022, or the £5.4m of share sales in SBTX
by OPTI since its listing in 2017, which has reduced the need to fundraise
for the continued development of OPTI and avoided dilution for our
own shareholders.
As a result, OPTI today has a strong balance sheet (circa £9.4m at
31 December 2023) with no debt, and multiple plays providing scope
for profitable development in different areas of the emerging
microbiome space.
The annual accounts for 2020 and 2021 showed that each of OPTI’s
businesses was profitable at the EBITDA level, with the Group as a whole
attaining profitability by virtue of the increased value of its SBTX asset.
In 2022 we faced a most challenging year in the wake of the COVID-19
pandemic and the global economic uncertainty that followed the
Russian invasion of Ukraine, and increased costs and reduced sales
following the appointment of a new CEO.
We took decisive action to address this through the departure of the
CEO of the prebiotic business under OptiBiotix Ltd in Spring 2023 and
a series of measures to reduce Board, management and advisory costs.
Since implementing these measures and under the renewed leadership
of Stephen O’Hara as CEO, we have enjoyed three quarters of increased
sales. This growth has continued into 2024.
Action has also been taken to reduce commercial risk in the business
by increasing the number of large partners in key strategic markets,
particularly the USA and Asia Pacific, with new relationships with
Brenntag, Tata, Iovate/Muscletech, and in 2024 an agreement with
Morepen.
Annual Report and Accounts 2023 4
Annual Report and Accounts 2022
Chief Executive’s Report (continued)
Equally importantly, we have made significant investments in our
ecommerce business to drive our direct-to-consumer sales, reducing
reliance on retail partners and increase our profit margins. While sales
through retail partners offer potential benefits in generating volume,
and increase the awareness and credibility of OPTI products, margins
are lower and the uniqueness of our formulations and their functional
benefits are often lost to retail staff and consumers among the many
competing brands on offer.
With our first generation products gaining traction in the USA, China,
and India and the upcoming launch of our second-generation products,
OPTI is well placed to become a major player in the expanding
microbiome market.
Commercial and scientific overview
During the year we have focused on driving sales growth through the
more active management of existing key accounts; increasing the
number of partners in key strategic markets, particularly the USA, China,
and India; and investing to increase direct sales to customers through
ecommerce channels in the UK and subsequently internationally.
Key developments during the financial year included:
Active management of existing key accounts:
•
An increase in sales of LeanBiome® to The Hut Group for inclusion
in its Myprotein range.
An increase in sales to Holland & Barrett health and wellbeing retail
and online business in the UK, albeit from a very low base in 2022.
An increase in sales of SlimBiome® to Paradise Fruits, a German
company producing gummies for Walmart and for sale online in
China.
Increased sales of our OptiBiome® prebiotic fibre (an alternative
trademark to SlimBiome®) to Optipharm in Australia following the
launch online of their Optislim and Optiman ready meal ranges
incorporating a ready meal OptiBiome sprinkle and a significant
new investment in marketing.
•
•
•
•
•
•
Increasing the number of new partners, particularly in
the USA and India:
•
Recruiting four new partners for SlimBiome® in Asia through our
partnership with Nutraconnect Pte, all of which placed initial
orders before the end of 2023 and which we expect to contribute
revenues of £125,000 to £150,000 in 2024.
•
•
•
•
Securing a license agreement with Tata Chemicals – part of the
$300bn turnover Tata Group – to incorporate its proprietary
Fossence® into our SlimBiome® and WellBiome® products for the
Indian market. This brings the assurance and familiarity of a
branded ingredient from a well-known and trusted local source
to the attention of Indian consumers
Reaching a new distribution agreement for SlimBiome® in Australia
and New Zealand with Ravenswood Ingredients, part of the
Brenntag group which is a global leader in specialised food
ingredients.
One of our partners, Optipharm, securing an international listing
for products containing SlimBiome® with CostCo, the fifth largest
retailer in the world.
Ongoing discussions with a leading US corporate on a global
launch of SlimBiome® in 2025 in multiple territories.
Investing in ecommerce channels:
•
investments
The Company has made significant
in new
ecommerce channels, including Amazon in the UK, Walmart in the
USA, and Tmall.com in China, to increase the proportion of our
sales made direct to consumers. This has generated strong growth
in turnover, with total ecommerce sales up approximately
threefold in 2023 from 2022 and continued growth in Q1 2024
which we hope will continue as more channels come on line.
Successfully launching new products including our reformulated
gut and digestive health WellBiome® functional fibre and mineral
blend, which has been selling strongly through both our own
website and Amazon UK.
An increase in the number of Apollo pharmacies in India and
Nahdi pharmacies in Saudi Arabia selling GoFigure® products.
A reduction in SlimBiome® stock held by partners: there was 13.9
metric tonnes of SlimBiome® taken from stock held by two
partners (Maxum and Cambridge Commodities)
in 2023
compared to 2022 (up 39%) representing a value of approximately
£417K based on retail price of £30 per kg. The Company has
commenced manufacture of replacement stock for Cambridge
Commodities as it anticipates most of this stock will be used for
existing orders planned for delivery in the first half of 2024.
Other developments:
•
A shift in our commercial focus to selling SlimBiome® Medical
sachets in Europe and SlimBiome® shots in India and the Gulf
states. These have been developed to help users manage their
weight by reducing hunger and food cravings. This is a highly
differentiated product which leverages growing market interest
in anti-obesity GLP-agonist drugs like Semaglutide which work by
reducing appetite. SlimBiome® compares favourably with these
drugs and offers a healthy, natural and safe approach to weight
management, with no observed side effects in multiple human
studies. GLP-agonists have a number of reported common adverse
5
OptiBiotix Health Plc
Chief Executive’s Report (continued)
effects and potentially serious side effects in some groups.
SlimBiome® can be used with any weight management or calorie
restriction plan and so complements rather than competes in a
crowded marketplace. The product enjoys high margins and
became a top-selling line within its market segment on Amazon
UK in 2023.
Roehampton University submitting the results of a third human
study on SlimBiome® for publication, which demonstrated
statistically significant benefits to appetite and hunger regulation
with no safety, compliance or tolerance issues reported by the
participating volunteers. This study underlined the effectiveness
of a single dose of SlimBiome® in delivering hunger-free weight
loss by non-invasive means, and was timely in view of the growing
consumer, media and pharmaceutical interest in this field.
Securing a grant from the Biotechnology and Biological Science
Research Council to fund a research project by the University of
Leeds into the impact of WellBiome® on the gut microbiome
throughout the digestive tract. This is expected to provide further
substantiation of existing health claims for WellBiome® in
international markets.
Hull University securing NHS Ethics approval as part of a large
programme grant (£2.7 million) amongst which is the proposal to
explore WellBiome® impact post-surgery. This is a project
independent of OptiBiotix in which Hull University have purchased
WellBiome® to explore its impact on post-surgical recovery times.
•
•
•
North America
We have a strong sales pipeline in North America and the USA made up
of small, medium size, and a number of large US corporates (including
a £9bn Multi-Level Marketing company -MLM) that offer opportunities
for sales growth in 2024 and beyond. The Company was pleased to
receive a first order of £116k from Muscletech in 2023, a leading weight
management and sports nutrition brand in the USA. This is a major
sports nutrition brand who are making a significant investment in
LeanBiome® as a key differentiator in the protein market and, if
successful on launch could have a material impact on future revenues.
The Company reported at the start of 2024 the launch of LeanBiome®
in MuscleTech’s Nitro Tech Ripped range, a premium protein powder
designed to support athletes who want to lose fat and build lean
muscle. LeanBiome® is now included in two leading sports nutrition
brands, Myprotein and MuscleTech, across the world, a market worth
$45.2bn in 2023, and expected to grow at a CAGR of 7.5% pa to 2030,
(Grand View Research, 2023). The Company sees the sports nutrition
market as an area of growing interest and opportunity for its
LeanBiome® brand with the scientific evidence increasingly showing
that optimising an athletes gut microbiome could improve an athletes’
stamina, lower inflammation, and support physical fitness (Frontiers |
Editorial: Nutrition to support gut health and the microbiome in athletes
(frontiersin.org). Having two major global sports nutrition brands making
a significant investment in LeanBiome® highlighting it as a key science
based differentiator should provide investors a good indication to the
potential opportunity developing within the sports nutrition market. If
successful, this could have a material impact on future revenues and
open up further opportunities in sports nutrition around the world. The
Company continued to advance projects and expand the pipeline of
opportunities with large North American companies and exhibited its
SlimBiome®, LeanBiome®, and Wellbiome® products at Supply Side West,
USA, in November 2023. Our focus is on companies committed to
science and strong storytelling, especially in weight management,
wellness, and sports nutrition with a special emphasis on e-commerce,
direct selling, and retail brands.
The Company is hopeful that further announcements with corporate
partners in the USA and Canada in 2024 will be made in due course.
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
of 1.4bn consumers, forecast to have a middle-class population of 475
million by 2030 and the world’s largest cohort of medium to high level
income customers by 2035. With obesity prevalence currently measured
at 40.3%, India represents a huge area of opportunity for weight
management products.
The formation of OHI has helped OPTI to avoid high import taxes and
to control the purchase and sale of both ingredients (SlimBiome®) and
finished product (GoFigure®, Morepen) manufactured and sold in India.
After a slow start following the launch of products with Apollo
Pharmacies in September 2022, momentum built during the year
resulting in GoFigure® products being sold through approximately 1,000
stores by the year-end.
Apollo’s own consumer survey showed an 87% customer return rate
among purchasers of GoFigure® products and 23% of new customers
visiting their pharmacies who just bought GoFigure® products. This
feedback is consistent with that from THG, who gained 40% new
customers with the introduction of LeanBiome® to their Myprotein
range. Such results create a positive platform for commercial discussions
with potential new partners, demonstrating the consumer appeal of our
products and their ability to attract both new and returning customers.
The licence agreement we secured with Tata Chemicals in October 2023
to incorporate its proprietary Fossence® into our SlimBiome® and
WellBiome® products for the Indian market which is anticipated to
increase their appeal to Indian consumers. In Q1 2024 we announced a
major new partnership agreement to sell products containing
SlimBiome® under the well-known and trusted Dr Morepen brand. This
is an established, well known, and trusted brand in the Indian market
Annual Report and Accounts 2023 6
Chief Executive’s Report (continued)
and represents a material step forward for our products in the Indian
market. OptiBiotix will receive revenue for both the ingredient and BTB
product sales with first orders placed for launch in Q3 2024. Based on
Morepens current forecasts this agreement could contribute in the
region of £6-7 million revenue per annum to OptiBiotix in the next four
to five years (see announcement March 2024).
Thanks to the work of the Department of Business and Trade and our
Business Development Director, Dr Taru Jain, we have high industry
awareness of OptiBiotix and its products throughput India. This has
created a strong pipeline of opportunities with emerging and leading
players in weight management and sports nutrition in India, where we
expect to build a substantial business in the years ahead.
Consumer Health and Ecommerce
The Consumer Health division grew rapidly during the year, with our
total Ecommerce sales increasing threefold in 2023 compared to 2022.
This was driven by strong growth in the sale of gummies in China and
large increases in Amazon Prime subscriptions.
Gummy sales in China during the year varied widely per month,
increasing rapidly in October and November with the aid of local key
opinion leader influencers and new sales through the TikTok platform.
Marketing on TikTok can increase sales rapidly but at a high cost and
tend to be impulse buys with lower repeat purchases. Our TikTok
account is managed by a Chinese agency with sales reconciled against
costs some time after revenue is received. They are only then included
in our accounts. We see TikTok as a means of increasing product and
brand awareness providing early sales growth with Tmall (Alibaba) a
more appropriate platform for sustainable growth.
In the UK we significantly increased our Amazon customer base by
successfully moving to the Fulfilment by Amazon (FBA) model that
allowed customers to receive faster deliveries through Prime accounts.
SlimBiome® is consistently among Amazon’s top sellers for appetite
suppressants, and achieved record sales during Prime month in July
2023 and was awarded Amazon choice in Q1 2024.
We are extending our customer reach through new Amazon channels
in Germany, the UAE and the Kingdom of Saudia Arabia, with Amazon
India to follow in H2 2024. We have also broadened our offer to
consumers with the launch of new products such as soups and
indulgence bars, initially through our own website with Amazon to
follow. Such additions to our range help to increase our average order
value online and to compensate for the usual seasonal peaks and
troughs in the weight management cycle.
heavy reliance on promotion through influencers and social media. In
adopting a similar approach, we believe we can demonstrate
competitive advantage on both price and product efficacy, including
on-pack health claims, and build similar sales and value.
Competitor analysis of WellBiome® also indicated value in a change in
positioning from healthy ageing to boosting gut and digestive health
which should allow us to attract more customers through more easily
understood messaging and benefits for the consumer. We have targeted
competitors with keywords/ads and successfully listed with Amazon
UK FBA.
The Consumer Health division has the advantage of receiving online
sales income immediately and allows more control of our brands and
messaging, while reducing our reliance on distributors to grow our
brands.
Results
The Group’s results for 2023 reflect its new structure following the listing
of ProBiotix Health (PBX) on the AQSE Growth Market on 31 March 2022.
When making comparisons with 2022, it should be noted that the prior
year accounts included revenues and costs for the combined Group
(OPTI and PBX) up to the end of March 2022.
Revenue for the year of £644,000 showed a pleasing 41% increase over
2022’s £457,000, with the move forward close to 50% once 2022’s first
quarter PBX sales are adjusted for. The change of CEO in March 2023
resulted in a significant improvement in revenue impetus following only
£16K of sales in the first two months of the year. Orders from our
wholesale business customers increased significantly year-on-year,
although delays setting up logistics with new partners meant that some
deliveries were delayed into 2024 with sales reportable in 2024. Our
investment in online direct to consumer business began to pay
dividends as sales exceed £100,000 for the first time, a three fold increase
on 2022.
Administrative expenses (excluding non-cash items such as share-based
payments and amortisation) were reduced by almost 30% to £1,778K
(2022: £2,498K), reflecting cost saving measures, the removal of PBX’s
costs after March 2022 and recovery of some of the doubtful debt
provided in the 2022 accounts. Actions to reduce 2023’s costs included
the removal of Cavendish as joint broker, announced in December 2022,
the departure of Rene Kamminga as CEO in March 2023, a 20%
reduction in all directors’ remuneration from January 2023 and the
retirement of two non-executive directors in July 2023. The former CEO’s
termination agreement saw us incur a one-off cost of £153K.
Competitor analysis of our WellBiome® range indicated a need to
increase awareness of the product through social channels. Competitors
such as Symprove have annual sales of around £20-£25m and are
exploring a £250m sale later this year (see Gut health supplement maker
Symprove plots £250m sale | Business News | Sky News). They have a
With gross margins in percentage terms remaining steady year on year,
the combination of improved sales and good control of administrative
expenses saw operating losses reduce to £1,664K from £2,489K. Overall
the Group recorded a loss before tax for the year of £2.08m, compared
with a profit of £2.59m in 2022. The prior year benefitted from a
7
OptiBiotix Health Plc
Chief Executive’s Report (continued)
significant gain on its investment in PBX offset by a loss on revaluation
of its shareholding in SBTX, whilst the current year’s results suffered from
the inclusion of a very disappointing £323K share of the total loss for the
year of PBX. On the plus side we netted a £487K accounting gain from
the disposal of further shares in SBTX that realised £1.1m in cash in 2023.
The Company retains a relatively healthy balance sheet with gross assets
of £9.4m (2022: £11.6m) and cash at the year-end of £0.6m (2022: £1.1m).
Since the year end a share placing and further sales of SBTX shares have
raised over £1.4m of additional funding to support the Group going
forward.
The Board, senior management and
advisers
We took decisive action in December 2022 and the first half of 2023 to
reduce Board, management and advisory costs in order to move the
Group to operational profitability as soon as possible.
As noted in the last annual report Rene Kamminga, who was appointed
CEO of OptiBiotix Ltd in March 2021, left the business on 28 February
2023 when Stephen O’Hara resumed the role of CEO of OptiBiotix Health
Limited. All directors voluntarily accepted a 20% reduction in their
salaries from 1 January 2023 and, with non-executive directors now
outnumbering executive directors by two to one, Stephen Hammond
and Chris Brinsmead agreed to step down as non-executive directors at
our AGM in July 2023, with our thanks for their contribution to the
business.
Graham Myers joined the Board on 1 December 2023 as Finance
Director, a part-time role in which he will work closely with the OptiBiotix
team to focus on driving each business unit to profitability. Graham
brings to us extensive experience in optimising financial controls,
managing budgets, building profitable businesses and delivering
mergers and acquisitions, all gained in a career of almost 30 years with
Croda International Plc; he remains Chair of Croda Pension Trustees
Limited.
On 28 December 2022 we served three months’ notice to terminate the
joint brokership of Cavendish Securities plc, with Peterhouse Capital
continuing as the Company’s sole broker. During the year we also
secured a 50% reduction in the fees charged by our corporate PR adviser.
Outlook
The Company set out a strategy of developing first generation products
using existing technology and highly innovative step change second
generation products in parallel and commercialising these in global
markets. Whist ambitious, costly and more time consuming, this strategy
gave shareholders exposure to multiple opportunities within the
emerging global human microbiome space and the potential for
multiple upside. This strategy is now coming to fruition.
Whilst this strategy has taken longer to deliver than anticipated the
Company is now at a tipping point with first generation products
gaining widespread international acceptance with growing sales in
multiple territories and the upcoming launch of our second generation
products generating industry interest. This creates a range of
opportunities to support future sales growth and value creation.
SlimBiome®/OptiBiome®/LeanBiome®
The Company has four human studies on SlimBiome which consistently
demonstrate it reduces hunger and cravings leading to changes in the
amount of food and type of food people eat and sustainable weight
loss. The studies have allowed the Company to gain on pack health
claims in major markets (Europe, Australia, USA, and Asia) leading to
agreements with major international and national companies like Iovate
(Muscletech), TheHutGroup (Myprotein), Apollo, and Morepen. The
partnership with Morepen and first order of over £175K plus ingredient
sales of £27K in H1 2024 is the first step in an agreement in a major
market and based on Morepen’s forecast could contribute in the region
of £6-7 million revenue per annum in the next four to five years. We
believe these agreements, plus other deals in the pipeline, and our focus
on selling finished products via e-commerce in multiple channels have
the potential to achieve sales of £30m+ in the future.
WellBiome®
WellBiome® is a patented food supplement, designed to support gut
health for wellbeing with health claims for improving gut health, brain
and cognitive health, and improve immune function. Research studies
have shown that a combination of fibres like WellBiome® can increase
gut microbiome diversity more than single fibres. The Company has a
number of human studies ongoing with WellBiome® including
exploring its impact on post surgical recovery times with Hull University
and a study on the impact on stress, anxiety, and sleep with
Southampton University. Gut Health is a large and growing area in
consumer health with companies like Symprove with single products
reporting annual sales of around £20-£25m and a valuation of
approximately £250m (see Gut health supplement maker Symprove
plots £250m sale | Business News | Sky News). We believe WellBiome®
has a number of significant advantages over Symprove including cost,
shelf life, user convenience (sachet rather than bottle), and health claims
and see this as an area of high future growth with the potential for
similar sales and value.
Second generation products
(SweetBiotix and MicroBiome
Modulators/Synbiotics)
As with any step change innovation this has been a long and difficult
path with significant challenges, particularly on scale up, and during the
two years of COVID when development stopped. These challenges have
Annual Report and Accounts 2023 8
Chief Executive’s Report (continued)
now been overcome and we have been pleased that the scale of the
opportunity and uniqueness of our patented approach has attracted
the interest of major global partners both in the manufacture (e.g DSM-
Firmenich) and application of these products (e.g Coca Cola, Nestle, Arla
etc). These partners bring scale and global networks albeit time
consuming and with stringent confidentiality conditions. We have been
pleased with the progress made by DSM-Firmenich and its preliminary
forecast for SweetBiotix® of >100,000 metric tonne per annum,
demonstrating its intent and potential scale of the opportunity. If this
forecast materialises at an expected price of £30 per kg this would
represent substantial sales revenue. Experience tells us that partner
forecasts tend to be optimistic, increases in volume often take longer,
and over time the sales price is likely to be eroded to £18-£20 per kg,
however this gives an indication of the potential scale of the
opportunity. We are currently working with a manufacturer who
supplies products to major corporates and uses 10,000 metric tonnes
of sugar per annum. We are progressing incrementally and have
included SweetBiotix® in a finished product for a large global partner
with a view for an upcoming launch. The Company is also working on
including SweetBiotix® in our own products and launching a bulk sugar
replacement product with the aim of seeing SweetBiotix® in an
increasing number of products in 2024 and beyond.
Whilst SweetBiotix® has captured investors interest, the Company has
another group of products which it believes create comparable
opportunities for revenue growth and value creation. OptiBiotix has
developed a number of unique, patented technologies, which allow it
to create dietary ingredients and/or therapeutic products to precision
engineer the microbiome. This is achieved by technologies which allow
us to examine a microbe’s genome to identify its ability to utilise specific
substrates. With this information protein synthesis techniques can be
used for large-scale production of unique substrates specific for the
optimum growth of that microbe. This allows the creation of substrates
which boost the growth of specific genera or species of microbes that
have been connected with cancer, improving drug treatments, the
development of chronic diseases, or even the ageing process Healthy
longevity: The role of the gut microbiome (medicalnewstoday.com). This
ability to identify and create products which selectively enhance the
growth and activity of specific microbes is a new concept but has the
potential to revolutionise microbiome-based products and therapies.
Microbiome modulating approaches are a largely unexplored area of
opportunity for both the food and pharmaceutical industry but have
the potential to transform healthcare. If the microbiome is the future of
healthcare, having an approach to precision engineer the microbiome
to enhance those microbes that deliver health benefits is the pathway
to achieving that aim.
As would be expected the Company has a high level of corporate
interest in its second-generation products. The Company is in discussion
with a wide range of industry partners over product application and
launch timescales, some already announced and some with new
9
OptiBiotix Health Plc
potential partners, across a wide range of areas and will make
announcements once these have been concluded. Given previous
experience with some investors contacting partners pretending to be
employed or representing OptiBiotix and damaging relationships, the
Company wishes to maintain confidentiality in this area to protect the
best interests of shareholders.
The focus for 2023 has been on recovering sales and moving the
business to profitability by a reduction in costs, a focus on existing
partners returning to forecast, bringing in new partners particularly in
the USA and Asia, and expanding ecommerce channels to increase
margins and reduce partner dependency. Good progress has been
made in each of these areas which has led to a recovery of growth in
2023 which has carried forward into 2024 with sales orders in H1
approaching FY 2023. In the last year and into 2024 we have been
particularly pleased with the pipeline of high-quality partners like Iovate,
Dr Morepen, TheHutGroup, the high conversion rate of interest to new
accounts, and the progress we are making with online sales, particularly
in China. These all have the potential to bring in significant future
revenues.
The fundamentals of our marketplace remain very exciting, with
appetite suppression, gut health, sugar alternatives, and modulation of
the human microbiome attracting ever-increasing interest as the
potential solution to a wide and growing range of lifestyle-related health
challenges. OptiBiotix has patented products with clinical studies in
many of these areas. Our unique, innovative products are based on
strong science, proven in clinical studies, comprehensively protected by
our global portfolio of patents and trademarks, and are achieving
growing international recognition through both industry awards and
positive customer reviews and growing sales.
We look to the future with a high degree of confidence in our products,
a growing online presence in international markets and the excitement
of bringing our industry changing second-generation products to
market.
We have achieved with minimal shareholder dilution, no debt, a strong
balance sheet, and significant exposure to the considerable growth
potential of the microbiome through our shareholdings in PBX and
SBTX.
We would like to thank shareholders for their patience and support and
look forward to growing the business and shareholder value in the years
ahead.
Stephen O’Hara
Chief Executive
28 June 2024
Strategic Report
For the year ended 31 December 2023
REVIEW OF BUSINESS
A review of the business of the Group, together with comments on
future developments is given in the Chairman and Chief Executive’s
reports – pages 3- 9.
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.
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 22
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 £635k as at 31 December 2023 and had no short-term borrowings.
The Board continues to monitor the balance sheet to ensure it has an
adequate capital structure.
10
Annual Report and Accounts 2023 10
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 continues to grow 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 five-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.
11
OptiBiotix Health Plc
Strategic Report (continued)
KEY PERFORMANCE INDICATORS
Financial
Year to
31 December
2023
£’000
Year to
31 December
2022
£’000
Revenue
Operating Loss
Profit/(Loss) for the period
Cash as at 31 December
644 457
(1,695) (2,489)
(2,039) 2,587
1,052
635
During the year to 31 December 2023 the company has achieved a
number of key objectives to build shareholder value, these are laid out
in the Chairman and Chief Executive’s reports – pages 3-9.
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 2023 the primary KPI’s were the completion of commercial
agreements and the recovery of turnover to pre COVID levels. 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
No dividends can be distributed for the year to 31 December 2023.
FUTURE DEVELOPMENTS
The Chairman and Chief Executive’s reports – pages 3-9 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
G Myers Executive Director – Finance 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, the Finance
Director and one Non-Executive Director.
Role of the Board:
The role of the Board is to agree the Group’s long-term strategy and
direction and to monitor achievement of its business objectives. The
Board meets several times per annum, either by teleconference or in
person. Furthermore, it holds additional meetings as are necessary to
transact ongoing business.
Annual Report and Accounts 2023 12
Strategic Report (continued)
Board Committees:
Remuneration Committee
The Remuneration Committee is made up of Sean Christie , as Chairman
with Neil Davidson as a member and Stephen O’Hara and Graham Myers
attending by invitation 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 the
other member . This committee is required to monitor the integrity of
the financial statements of the Group, including the interim and annual
reports. The committee also reviews financial returns to regulators and
any financial information contained in announcements of a price
sensitive nature. The committee shall also consider and make
recommendations to the Board regarding resolutions to be put to
shareholders for approval at the Annual General Meeting, with respect
to the appointment or re-appointment of the Group’s external auditors.
The Audit Committee, together with the external auditors, are
responsible for determining the scope of the annual audit.
Nomination Committee
The Company does not currently have a nomination committee as the
Board does not consider it appropriate to establish such a committee
at this stage of the Company's development. Decisions which would
usually be taken by the nomination committee will be taken by the
Board as a whole.
Employees
The Group engages its employees in all aspects of the business and
seeks to remunerate them fairly. The Group gives full and fair
consideration to applications for employment regardless of age, gender,
colour, ethnicity, disability, nationality, religious beliefs or sexual
orientation. The Board takes employees’ interest into account when
making decisions. Any suggestions from employees aimed at improving
the Group’s performance are welcomed.
Suppliers and Contractors
The Group recognises that the goodwill of its contractors, consultants
and suppliers is crucial to the success of its business, and seeks to build
and maintain this goodwill through fair and transparent business
practices. The Group aims to settle genuine liabilities in accordance with
contractual obligations.
Health and Safety
The Board recognises that it has a responsibility to provide strategic
leadership and direction in the development and maintenance of
the Group’s health and safety strategy, in order to protect all of
its stakeholders.
Section 172 Statement
Under s172 of the Companies Act 2006 the Directors have a duty to act
in good faith in a way that is most likely to promote the success of the
Company for the benefit of its members as a whole, having regard to
the likely consequences of decisions for the long term, the interests of
the Company’s employees, the need to foster relationships with other
key stakeholders, the impact on the community and the environment,
maintaining a reputation for high standards of business conduct, and
the need to act fairly as between members of the Company.
Key decisions made by the Board during 2023 were related primarily to:
•
•
•
Active Management of existing accounts;
Increasing the number of partners particularly in the USA and
India; and
Investing in ecommerce channels
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.
13
OptiBiotix Health Plc
Strategic Report (continued)
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.
Social, Community and Human Rights
Issues
There was no adverse impact on the community or environment from
the decisions made by the board during the year.
ON BEHALF OF THE BOARD
S P O’Hara
28 June 2024
Annual Report and Accounts 2023 14
Directors’ Report
For the year ended 31 December 2023
The Directors present their report and the audited financial statements
of the group for the year to 31 December 2023.
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.
Non-executive Directors
R Davidson
M Christie
C Brinsmead (resigned 26th July 2023)
S Hammond (resigned 26th July 2023)
Directors’ Remuneration
The directors are entitled to receive relevant fees, as detailed in the
directors’ remuneration in Note 4.
DIRECTORS
Directors and their interests
The directors who served the company during the year and up to the
date of this report were as follows:
The directors of the Company held the following beneficial interests in
the shares and share options of Optibiotix at the date of this report:
Executive Directors
S P O’Hara
S Kolyda
G Myers (appointed 4th December 2023)
Issued Share Capital
Share Warrants
Share Options
Ordinary
shares of
£0.02 each
10,212,986
503,000
150,000
–
–
125,000
Percentage
Held
Ordinary
shares of
£0.02 each
Warrant
exercise
price
Ordinary
shares of
£0.02 each
Option
exercise
price
10.43%
0.51%
0.15%
–
–
0.13%
–
–
–
–
–
–
–
–
–
–
–
–
6,099,135
192,500
50,000
82,500
358,722
–
£0.08
£0.02
£0.02
£0.02
£0.20
–
S P O’Hara
R Davidson
M Christie
S Kolyda
S Kolyda
G Myers
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.
15
OptiBiotix Health Plc
Directors’ Report (continued)
SUBSTANTIAL SHAREHOLDINGS
Substantial shareholdings include directors as at 28 June 2024 were as
follows:
% of shares issued
Stephen O’Hara
10.43%
Finance Yorkshire Seedcorn LP 5.83%
The share price per share at 31/12/2023 was £0.27 (31/12/2022: £0.13)
FINANCIAL INSTRUMENTS
The Group’s exposure to financial risk is set out in Note 23 to the
financial statements.
RESEARCH AND DEVELOPMENT
The Chairman and Chief Executive’s reports – pages 3-9 gives
information on the Group’s research and development activities.
DIRECTORS INDEMNITY INSURANCE
The Group hold a Directors and Officers policy managed by CFC
Underwrting 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 23 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
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.
STATEMENT OF DIRECTORS’
RESPONSIBILITIES
The Directors are responsible for preparing the Directors’ Report and the
financial statements in accordance with applicable laws and regulations.
Company law requires the directors to prepare financial statements for
each financial period. Under that law the directors have, as required by
the AIM Rules for Companies of the London Stock Exchange, elected to
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.
Annual Report and Accounts 2023 16
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
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 10.
ON BEHALF OF THE BOARD
S P O’Hara
28 June 2024
indicated that
Gerald Edleman LLP has
is willing to seek
re-appointment as the Company’s auditor at the Annual General
Meeting. A resolution to appoint Gerald Edelman as the Company’s
auditor will be proposed at the Annual General Meeting.
it
17
OptiBiotix Health Plc
Independent Auditor’s Report to the Members of
OptiBiotix Health Plc
For the year ended 31 December 2023
Opinion
Independence
We have audited the financial statements of Optibiotix Health PLC (the
‘parent company’) and its subsidiaries (the ‘group’) for the year ended
31 December 2023 which comprise the consolidated statement of
comprehensive income, consolidated and company statements of
financial position, consolidated and company statements of changes in
equity, consolidated and company statement of cash flows, and notes
to the consolidated and company financial statements, including a
summary of significant accounting policies.
The financial reporting framework that has been applied in the
preparation of the group financial statements is applicable law and UK
adopted International Accounting Standards in conformity with the
requirements of the Companies Act 2006. The financial reporting
framework that has been applied in the preparation of the parent
company financial statements is applicable law and United Kingdom
Adopted International Accounting Standards.
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of
the group’s and of the parent company’s affairs as at 31 December
2023 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in
accordance with International Accounting Standards;
the parent company financial statements have been properly
prepared in accordance with International Accounting Standards
in conformity with the requirements of the Companies Act 2006;
the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
We remain independent of the Group and the Company in accordance
with the ethical requirements that are relevant to our audit of 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.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
director’s use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of
the directors’ assessment of the group and parent company’s ability to
continue to adopt the going concern basis of accounting included
reviews of cash reserves and critical review of forecasts for a period of
12 months from when the financial statements are authorised for issue.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the group’s ability to
continue as a going concern for a period of at least 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.
Overview
Key audit matters
1. Capitalisation and impairment of intangible
Basis for opinion
Materiality
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 believe
that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
assets (development cost and patents)
2. Recovery of parent company’s investments
Group financial statements as a whole $94,200
based on 1% of gross assets. Company financial
statements as a whole £70,700 based on 75%
of Group materiality.
Annual Report and Accounts 2023 18
Independent Auditor’s Report to the Members
of OptiBiotix Health Plc (continued)
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed
the risks of material misstatement in the financial statements. In
particular, we looked at where the directors made subjective judgments,
for example in respect of significant accounting estimates that involved
making assumptions and considering future events that are inherently
uncertain. As in all of our audits we also addressed the risk of
management override of internal controls, including evaluating whether
there was evidence of bias by the directors that represented a risk of
material misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough
work to be able to give an opinion on the financial statements as a
whole, taking into account the structure of the Group and the Company,
the accounting processes and controls, and the industry in which they
operate.
The Company and OptiBiotix Limited are significant components and
were subject to full scope audit procedures by the Group audit team.
Our scope on the non-significant components were the performance
of analytical review procedures by the Group audit team. We also
performed specified audit procedures over certain account balances
and transaction classes that we regarded as material to the Group.
Key audit matters
Key audit matters are those matters that, in our professional judgement,
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. In
addition to the matter described in the Material Uncertainty related to
going concern section, we have determined the matters described to
be the key audit matter to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Capitalisation and
(Development cost and patents)
impairment of
intangible assets
We have performed the following audit procedures:
The group is focused on product development in relation to its IP Portfolio
of products. Consequent to this, one of the Group’s most significant asset
on the consolidated statement of financial position is its intangible asset.
There is a risk that the intangible cost are not capitalised appropriately
under IFRS.
As explained in Note 2 to the consolidated financial statements, the
indicators of impairment assessment in relation to the intangible require
the exercise of significant judgement by Management and the Directors.
Management and the Directors are required to assess whether there are any
potential impairment triggers which would indicate that the carrying value
of the assets may not be recoverable for each cash generating unit.
Management and the Directors did not identify any indicators of
impairment. Given the significance of the assets to the Group’s consolidated
statement of financial position and the significant management
judgements and estimates involved in this area, we considered this a key
audit matter.
19
OptiBiotix Health Plc
• We evaluated the Directors’ and Management’s impairment review for
the intangible assets.
• We challenged if the capitalisation of the intangible asset is in line with
the relevant accounting standard and agreed a sample of transactions to
supporting invoices.
• We critically challenged the considerations made regarding indicators of
impairment in accordance with the relevant accounting standards by
performing the following procedures:
o We assessed the Directors’ and Management’s impairment indicator
review to establish whether it was performed in accordance with the
requirements of the relevant accounting standards.
o We obtained and inspected third party documents relating to the
patent status and to check legal title of the patents.
• We challenged management on their judgements of the valuation of the
intangible balances as at 31 December 2023. The intangible balances are
not considered impaired when assessed against the underlying entities
forecasted cashflow.
• We assessed the adequacy and reasonableness of disclosures in the
financial statement in this regard.
Key observations:
Based on the audit work performed, we are satisfied with the carrying
valuation of investments as at year ended 31 December 2023.
Independent Auditor’s Report to the Members
of OptiBiotix Health Plc (continued)
Key audit matter
How our audit addressed the key audit matter
Recovery of the Parent Company’s investment
We have performed the following procedures:
Directors are responsible to assess whether or not investments in
subsidiaries require impairment. As the only investments held in the year
relate to trading entities or support entities for the group, this is crucial for
investors’ understanding of the group.
As with intangibles, there is a level of inherent uncertainty involved in
forecasting and discounting future cashflows. Given the significant of the
Parents statement of financial position and significant management
judgements and estimates involved in this area, we consider this a key audit
matter.
• We evaluated the Directors’ and Management’s impairment review for
the investments.
• Conducted a review of Board minutes to see if any information has come
to light which might indicate the need for impairment;
• We challenged management on their judgements of the valuation of the
investments balances as at 31 December 2023. The investments are fairly
stated when assessed against the underlying entities forecasted
cashflow.
Key observations:
Based on the audit work performed, we are satisfied with the carrying
valuation of investments as at year ended 31 December 2023.
Our application of materiality
Materiality is assessed as the magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to
influence the economic decisions of the users of the financial statements. Misstatements below these levels will not necessarily be evaluated as
immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating
their effect on the financial statements as a whole. Materiality provides a basis for determining the nature and extent of our audit procedures.
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
£94,200
£70,000
How we determined it
1% of gross assets
Representing 75% of the Group financial
statements materiality
Rationale for
benchmark applied
We believe that gross assets is a primary measure
used by
the
shareholders
performance of the group
in assessing
We believe that gross assets is a primary measure
used by shareholders in performance of the
Company as the holding company within the
Group
Performance materiality
£56,500
£42,400
Basis for determining
performance materiality
60% of materiality. In reaching our conclusion on
the level of performance materiality to be applied
we considered a number of factors including the
expected total value of known and
likely
misstatements (based on past experience), our
knowledge of the Group’s control environment
and management’s attitude towards proposed
adjustments.
60% of materiality. In reaching our conclusion on
the level of performance materiality to be applied
we considered a number of factors including the
expected total value of known and
likely
misstatements (based on past experience), our
knowledge of the Group’s control environment
and management’s attitude towards proposed
adjustments.
Annual Report and Accounts 2023 20
Independent Auditor’s Report to the Members
of OptiBiotix Health Plc (continued)
Component materiality
For each component in the scope of our Group audit, we allocated a
materiality that is equal to or less than our overall Group materiality. The
range of materiality allocated across components is ranged from
£70,700 to £75,300. We set materiality for each significant component
of the Group based on a percentage of between 75% and 80% of Group
materiality dependent on the size and our assessment of the risk of
material misstatement of that component. In the audit of each
component, we further applied performance materiality levels of 60%
of the component materiality to our testing to ensure that the risk of
errors exceeding component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them
misstatements identified during our audit above £4,710 for the Group
and £3,536 for the Company audit 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
•
•
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
Company and its environment obtained in the course of the audit, we
have not identified material misstatements in the strategic report or the
directors' report.
We have nothing to report in respect of the following matters in relation
to which the Companies Act 2006 requires us to report to you if, in our
opinion:
•
•
•
•
adequate accounting records have not been kept by the Group
and Company, or returns adequate for our audit have not been
received from branches not visited by us; or
the Group and 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 Statement of Directors' responsibilities
statement set out on page 16, 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 Company or to cease operations,
or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of
the financial statements
The objectives of our audit, in respect to fraud are; to identify and assess
the risks of material misstatement of the financial statements due to
fraud; to obtain sufficient appropriate audit evidence regarding the
assessed risks of material misstatements due to fraud, through designing
and implementing appropriate responses; and to respond appropriately
to fraud or suspected fraud identified during the audit. However, the
primary responsibility for the prevention and detection of fraud rests
with both those charged with governance of the entity and
management.
21
OptiBiotix Health Plc
Independent Auditor’s Report to the Members
of OptiBiotix Health Plc (continued)
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:
In response to the risk of irregularities and non-compliance with laws
and regulations, we designed procedures which included, but were not
limited to:
•
•
•
•
•
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 in the United Kingdom;
we identified the laws and regulations applicable to the company
through discussions with directors and other management, and
from our knowledge and experience of the entity's activities.
we focused on specific laws and regulations which we considered
may have a direct material effect on the financial statements or
the operations of the company, including Companies Act 2006,
taxation legislation, data protection, employment and health and
safety legislation.
we assessed the extent of compliance with the laws and
regulations identified above through making enquiries of
management and reviewing legal expenditure; and
identified laws and regulations were communicated within the
audit team regularly and the team remained alert to instances of
non-compliance throughout the audit.
We assessed the susceptibility of the company's financial statements to
material misstatement, including obtaining an understanding of how
fraud might occur, by:
•
•
making enquiries of management as to where they considered
there was susceptibility to fraud, their knowledge of actual,
suspected and alleged fraud; and
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;
judgements and assumptions made
in
assessed whether
determining the accounting estimates were indicative of potential
bias. Key judgements and assumptions are comprised in the
impairment assessment of the carrying value of intangible assets,
investments and going concern as assessed within our Key Audit
Matters above; and
investigated the rationale behind significant or unusual
transactions.
•
•
•
agreeing financial statement disclosures to underlying supporting
documentation which included our evaluation of Management’s
assessment on the impact of climate change on the Group and
Company and related disclosures;
reading the minutes of meetings of those charged with
governance; and
enquiring of management as to actual and potential litigation and
claims.
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
noncompliance 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, including the opinions, has been prepared for and only for
the Company’s members as a body in accordance with Chapter 3 of Part
16 of the Companies Act 2006 and for no other purpose. We do not, in
giving these opinions, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior
consent in writing.
Hemen Doshi
For and on behalf of
Gerald Edelman LLP,
Charted Accountants
Statutory Auditor
73 Cornhill
London United Kingdom
EC3V 3QQ
28 June 2024
Annual Report and Accounts 2023 22
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2023
Year ended
31 December 2023
£’000
Year ended
31 December 2022
£’000
Notes
644
324
320
(6)
(205)
(1,804)
(2,015)
(1,695)
–
1
1
(323)
(513)
487
–
–
(2,043)
4
(2,039)
(2,039)
(2,039)
(2.24)p
(2.08)p
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
6
5
5
11
11
11
11
11
7
8
8
Revenue from contracts with customers
Cost of sales
Gross profit
Share based payments
Depreciation and amortisation
Other administrative costs
Total administrative expenses
Operating loss
Finance cost
Finance income
Share of loss from associate
(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
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 32 to 55 form part of these financial statements
23
OptiBiotix Health Plc
Consolidated Statement of Financial Position
As at 31 December 2023
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
Retained Earnings
Total Equity
LIABILITIES
Current liabilities
Trade and other payables
Non-current liabilities
Deferred tax liability
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
As at
31 December 2023
£’000
As at
31 December 2022
£’000
Notes
9
11
11
12
13
7
14
15
16
16
16
16
17
18
1,331
3,887
2,806
8,024
188
460
97
635
1,380
9,404
1,824
2,958
772
1,500
1,818
8,872
180
136
352
352
532
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
278
278
365
365
643
9,404
11,548
These financial statements were approved and authorised for issue by the Board of Directors on 28 June 2024 and were signed on
its behalf by:
S P O’Hara
Director
Company Registration no. 05880755
The notes on pages 32 to 55 form part of these financial statement
Annual Report and Accounts 2023 24
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
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 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 – – –
Balance at 31 December 2022 1,824 3,684 2,958 939 – 1,500 –
Loss for the year – (2,039) – – – – –
Movement on reserves – 173 – (173) – – –
Share options and warrants – – – 6 – – –
Total
equity
£’000
18,172
2,587
(10,258)
(93)
–
510
(24)
11
10,905
(2,039)
–
6
Balance at 31 December 2023 1,824 1,818 2,958 772 – 1,500 –
8,872
The notes on pages 32 to 55 form part of these financial statements
25
OptiBiotix Health Plc
Notes to the Consolidated Statement of Cash Flows
For the year ended 31 December 2023
Opening Cash
Operating activities
Operating loss
Amortisation
Impairment of patents
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 32 to 55 form part of these financial statements
Year ended
31 December 2023
£’000
Year ended
31 December 2022
£’000
Notes
1,052
2,007
(1,695)
205
5
6
(10)
61
(98)
–
(1,527)
–
–
1,110
1,110
–
–
(417)
635
(2,489)
224
–
11
(76)
1,116
(19)
124
(1,109)
(168)
(188)
25
(331)
485
485
(955)
1,052
Annual Report and Accounts 2023 26
Notes to the Consolidated Statement of Cash Flows
For the year ended 31 December 2023
1. Cash and Cash Equivalents
Cash and cash equivalents
The notes on pages 32 to 55 form part of these financial statements
Year ended
31 December
2023
£’000
Year ended
31 December
2022
£’000
635
1,052
27
OptiBiotix Health Plc
Company Statement of Financial Position
As at 31 December 2023
ASSETS
Non-current assets
Investments
Investment in associate
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 2023
£’000
As at
31 December 2022
£’000
Notes
11
11
13
14
15
16
16
16
16
17
5,858
3,212
9,070
32
434
466
9,536
1,824
2,958
1,500
772
2,400
9,454
82
82
9,536
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
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the Company
income statement.
The loss for the Company for the year was £1.579m (2022, profit: £3.008m).
These financial statements were approved and authorised for issue by the Board of Directors on 28 June 2024 and were signed on
its behalf by:
S P O’Hara
Director
Company Registration no. 05880755
The notes on pages 32 to 55 form part of these financial statements
Annual Report and Accounts 2023 28
Company Statement of Changes in Equity
For the year ended 31 December 2023
Called up
Share
capital
£’000
Share
Premium
£’000
Merger Share-based
Payment
reserve
£’000
Relief
Reserve
£’000
Retained
Earnings
£’000
Total
equity
£’000
Balance at 31 December 2021
1,759
2,537
1,500
928
11,056
17,780
Profit for the year
Dividends
Share options and warrants
Fundraising Commission
Issue of shares during the year
Balance at 31 December 2022
Loss for the year
Movement on reserves
Share options and warrants
–
–
–
–
65
1,824
–
–
–
–
–
–
(24)
445
–
–
–
–
–
2,958
1,500
–
–
–
–
–
–
Balance at 31 December 2023
1,824
2,958
1,500
The notes on pages 32 to 55 form part of these financial statements
–
–
11
–
–
939
–
(173)
6
772
3,008
3,008
(10,258)
(10,258)
–
–
–
11
(24)
510
3,806
11,027
(1,579)
(1,579)
173
–
–
6
2,400
9,454
29
OptiBiotix Health Plc
Company Statement of Cash Flows
For the year ended 31 December 2023
Opening Cash
Operating activities
Operating loss
Share based payments
Loan conversion to management change
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
Interest income
Net cash inflow from financing activities
Total movement
Cash and cash equivalents at end of period
1
The notes on pages 32 to 55 form part of these financial statements
Year ended
31 December 2023
£’000
Year ended
31 December 2022
£’000
Notes
865
1,705
(1,535)
–
14
(7)
–
–
901
(627)
(915)
1,110
195
–
1
1
(431)
434
(1,482)
11
–
416
50
42
756
(207)
(1,143)
25
(1,118)
485
–
485
(840)
865
Annual Report and Accounts 2023 30
Notes to the Company Statement of Cash Flows
For the year ended 31 December 2023
1. Cash and Cash Equivalents
Cash and cash equivalents
The notes on page 32 to 55 form part of these financial statements
As at
31 December 2023
£’000
As at
31 December 2022
£’000
434
865
31
OptiBiotix Health Plc
Notes to the Financial Statements
For the year ended 31 December 2023
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 2023.
2. Accounting Policies
Statement of compliance
The consolidated and parent company 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.
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.
Annual Report and Accounts 2023 32
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
Standards, amendments and interpretations effective and adopted in 2023
The accounting policies adopted are consistent with those of the previous financial year. In addition, the Group has adopted the
new, and amendments to, standards listed below. These amendments were either not applicable or not material to the Group or
Parent Company.
International Accounting Standards (IAS/IFRS)
Initial Application of IFRS 17 and IFRS 9—Comparative Information
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
Definition of Accounting Estimates (Amendments to IAS 8)
Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
International Tax Reform - Pillar Two Model Rules (Amendments to IAS 12)
Effective date
1 January 2023
1 January 2023
1 January 2023
1 January 2023
1 January 2023
New standards and interpretations not yet adopted
The International Accounting Standards Board (IASB) has issued the following standards, amendments and interpretations with an
effective date after the date of these consolidated financial statements. These are effective for annual reporting periods beginning
on or after the date indicated:
International Accounting Standards (IAS/IFRS)
Classification of liabilities as current or non-current and non-current liabilities with Covenants -
Amendments to IAS 1
Lease Liability in a Sale and Leaseback - Amendments to IFRS 16
Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7
Lack of exchangeability - Amendments to IAS 21
Effective date
1 January 2024
1 January 2024
1 January 2024
1 January 2025
The Group is assessing the impact of these new standards and the Group’s financial reporting will be presented in accordance with
these standards from the effective date.
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.
33
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are
accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted
to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling
interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners
of the Company.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate
of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the
assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Where certain assets of the subsidiary
are measured at revalued amounts or fair values and the related cumulative gain or loss has been recognised in other comprehensive
income and accumulated in equity, the amounts previously recognised in other comprehensive income and accumulated in equity
are accounted for as if the Company had directly disposed of the related assets (i.e. reclassified to profit or loss or transferred directly
to retained earnings).
The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on
initial recognition for subsequent accounting under IFRS 9 “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.
Annual Report and Accounts 2023 34
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
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.
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.
35
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
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.
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 using the effective
2.8
interest rate method.
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.
Annual Report and Accounts 2023 36
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
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.
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 2023.
37
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
2.19
Share-based compensation
The fair value of the employee and suppliers services received in exchange for the grant of the options is recognised as an expense.
The total amount to be expensed over the vesting year is determined by reference to the fair value of the options granted, excluding
the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions
are included in assumptions about the number of options that are expected to vest. At each statement of financial position date,
the entity revises its estimates of the number of options that are expected to vest. It recognises the impact of the revision to original
estimates, if any, in the income statement, with a corresponding adjustment to equity.
The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share
premium when the options are exercised.
The fair value of share-based payments recognised in the income statement is measured by use of the Black Scholes model, which
takes into account conditions attached to the vesting and exercise of the equity instruments. The expected life used in the model is
adjusted; based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
The share price volatility percentage factor used in the calculation is based on management’s best estimate of future share price
behaviour and is selected based on past experience, future expectations and benchmarked against peer companies in the industry.
2.20
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.
2.21
Intangibles – Patents and trademarks
Patents acquired by way of the fair value uplift by way of the reverse merger in 2014 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 these acquired
patents over their estimated useful life of twenty years once the patents have been granted.
Development costs for new patents and trademarks since 2014 that have been capitalized in line with the recognition criteria of
IAS38 have been estimated to have a useful economic life of 10 years.
2.22
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.
Annual Report and Accounts 2023 38
Notes to the Financial Statements (continued)
2. Accounting Policies (continued)
2.23
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.
2.24
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 uplift of the patents acquired by way of the reverse merger
in 2014 to be 20 years. Development costs of patents and trademarks since 2014 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 £1.331m (£1.540m).
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 2023.
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. The Directors believe there are no indicators which point
to a potential adverse impact on the asset.
39
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
3. Segmental Reporting
In the opinion of the directors, the Group has one class of business, in 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 geographical market
UK
US
India
China
Rest of world
Year ended
31 December 2023
£’000
Year ended
31 December 2022
£’000
221
202
–
75
146
644
136
100
61
–
160
457
During the reporting period one customer represented £104k (14.9%) of Group revenues. (2022: one customer generated £100k
representing 21.9% of Group revenues)
4. Employees and Directors
Wages and salaries
Directors’ remuneration
Social security costs
Pension costs
Year ended
31 December 2023
£’000
Year ended
31 December 2022
£’000
375
272
54
19
720
522
354
66
35
977
Within salaries and wages there is a charge of £153k (2022:NIL) for termination payments made to R Kamminga.
In addition to the costs disclosed above a further £177k of employee costs have been recharged to Probiotix Health Plc under a
shared services agreement.
Annual Report and Accounts 2023 40
Notes to the Financial Statements (continued)
4. Employees and Directors (continued)
The average monthly number of employees during the period was as follows:
Group
Directors
Selling, General & Administration
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
Remuneration for qualifying services
Company pension contributions to defined
41
OptiBiotix Health Plc
Year ended
31 December 2023
No.
Year ended
31 December 2022
No.
5
5
10
5
5
6
5
11
6
6
Year ended
31 December 2023
£’000
Year ended
31 December 2022
£’000
272
–
5
–
7
284
138
5
143
354
12
5
–
10
381
143
4
147
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 2023 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 138 – 5
S Christie 20 – –
R Davidson 44 – –
S Kolyda 44 – 2
C Brinsmead 11 – –
S Hammond 11 – –
G Myers 4 – –
Total 272 – 7
4 147
– 20
– 44
1 47
– 11
– 11
– 4
5 284
Total
2022
£’000
151
25
55
88
31
31
–
381
Benefits in kind relate to medical insurance.
5. Net Finance Income/(Costs)
Finance Income:
Bank Interest
Net Finance Income/(Costs)
Year ended
31 December 2023
£’000
Year ended
31 December 2022
£’000
1
1
–
–
Annual Report and Accounts 2023 42
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
43
OptiBiotix Health Plc
Year ended
31 December 2023
£’000
Year ended
31 December 2022
£’000
40
272
447
58
–
–
–
94
114
6
(104)
205
183
314
9
55
93
229
68
354
623
25
15
8
2
122
84
12
458
224
88
378
12
80
102
78
2,015
2,733
Year ended
31 December 2023
£’000
Year ended
31 December 2022
£’000
17
(13)
4
(38)
(108)
(146)
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 2023 nor for the year ended
31 December 2022.
Profit (Loss) on ordinary activities before income tax
Loss on ordinary activities multiplied by the effective rate of
corporation tax in UK of 23.5% (2022 – 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 2023
£’000
Year ended
31 December 2022
£’000
(2,043)
(480)
171
(63)
–
–
31
–
–
358
17
2,442
466
166
(1,068)
–
(38)
28
–
–
408
(38)
The group has estimated losses of £7.6m (2022: £6.1m) in respect of which a deferred tax asset of £1.9m (2022: £1.5m) 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.
Annual Report and Accounts 2023 44
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:
2023
Basic and diluted EPS
Basic EPS
Diluted EPS
Earnings
£’000
(2,038)
(2,038)
Weighted average
Number of shares
No.
90,190,661
98,273,568
2022
Basic EPS
Diluted EPS
Earnings
£’000
2,587
2,587
Weighted average
Number of shares
£
88,279,952
93,213,179
Profit per-share
Pence
(2.24)p
(2.08)p
Profit per-share
Pence
2.93
2.78
As at 31 December 2023 there were 7,082,907 (2022: 7,182,907) outstanding share options and NIL (2022: NIL) outstanding share
warrants.
9.
Intangible assets
Group
Cost
At 31 December 2021
Additions
Disposals
At 31 December 2022
Additions
Disposals
At 31 December 2023
45
OptiBiotix Health Plc
Development
Costs and
Patents
£’000
3,865
46
(1,370)
2,541
–
(4)
2,537
Notes to the Financial Statements (continued)
9.
Intangible assets (continued)
Group
Cost
At 31 December 2021
Additions
Disposals
At 31 December 2022
Additions
Disposals
Impairment
At 31 December 2023
Amortisation
At 31 December 2021
Amortisation charge for the year
Disposals
At 31 December 2022
Amortisation charge for the year
Disposals
Amortisation eliminated on impairment
At 31 December 2023
Carrying amount
At 31 December 2023
At 31 December 2022
Development
Costs and
Patents
£’000
3,865
46
(1,370)
2,541
–
–
(4)
2,537
1,225
224
(448)
1,001
206
–
(1)
1,206
1,331
1,540
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 31 December 2022 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.
Annual Report and Accounts 2023 46
Notes to the Financial Statements (continued)
10. Property, plant and equipment
Group
Cost
At 31 December 2021
Additions
Disposals
At 31 December 2022
Additions
Disposals
At 31 December 2023
Group
Depreciation
At 31 December 2021
Charge for the year
At 31 December 2022
Charge for the year
At 31 December 2023
Carrying amount
At 31 December 2023
At 31 December 2022
£
8,461
–
–
8,461
–
–
8,461
£’000
8
8
8
–
–
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 2023 was 15.25p.
During the year, 6,911,567 were disposed to generate gross proceeds of £1.1m with original cost of £622k. At 31 December 2023
the holding stood at 13.39%
Investments
At the beginning of the period
Revaluations
(Loss)/gain on investments
Disposal of shares during year
At 31 December
47
OptiBiotix Health Plc
2023
£’000
5,022
–
(513)
(622)
3,887
2022
£’000
13,651
(8,620)
–
(9)
5,022
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
2023
£’000
3,129
–
–
(323)
2,806
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 year to 31 December 2023.
Revenue
Loss from continuing operations
Total comprehensive loss
Current assets
Current Liabilities
Non-current liabilities
44% share of total comprehensive loss
2023
£’000
1,673
(729)
(735)
1,871
(566)
(97)
(323)
2022
£’000
–
11,242
(8,030)
(83)
3,129
2022
£’000
1,308
(237)
(189)
2,311
(307)
(89)
(83)
Annual Report and Accounts 2023 48
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
2023
£’000
5,022
(513)
(622)
3,887
1,986
–
(15)
–
1,970
5,858
2023
£’000
3,212
3,212
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
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. The Directors believe there are no
indicators which point to a potential adverse impact on the asset.
During the year to 31 December 2022 an impairment charge of £8.03m was 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 year to 31 December 2022 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.
49
OptiBiotix Health Plc
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 2023 the Company directly held the following subsidiaries:
Name and Country of
Registered office address Active/ incorporation
of company Nature of Business Dormant and place of business
Proportion of
equity interest
OptiBiotix Limited Research & Development Active United Kingdom
Innovation Centre Innovation Way,
Heslington, York, YO10 5DG
100% of ordinary shares
Optibiotix Health India Health foods Active India
Private Limited
House NO.243, Mcd Colony,
Vivekanand Puri Sarai,
Rohilla City, Delhi CITY, DELHI,
North Delhi, Delhi, India, 110007
The Healthy Weight Loss Company Limited was dissolved on 19 December 2023.
12. Inventories
100% of ordinary shares
Group Company
2023
£’000
2023
£’000
2022
£’000
Finished goods 188
178
–
During the period £334k (2022: £213k) has been expensed to the income statement.
13. Trade and other Receivables
Group Company
2023
Current £’000
2023
£’000
2022
£’000
Accounts receivable 345
Other receivables 97
Prepayments and accrued income 18
460
379
131
11
521
18
12
2
32
2022
£’000
–
2022
£’000
–
17
8
25
During the year Optibiotix Health PLC recharged Probiotix Health PLC £15,000 for Directors’ fees which was repaid after the year end.
During the year Optibiotix Health PLC loaned Optibiotix Limited £1,223,340 to finance working capital costs. Optibiotix Limited
recharged Optibiotix Health PLC £327,927 , (2022: £373,426) for salary costs. The balance at the year end of £895,381 (2022: £846,574)
was cancelled. There was no interest charged during the year. This does not impact on the consolidated Group accounts.
Annual Report and Accounts 2023 50
Notes to the Financial Statements (continued)
13. Trade and other Receivables (continued)
During the year Optibiotix Limited recharged Probiotix Health PLC £44,799(2022: £23,139) for directors’ fees. The balance at the
yearend was £NIL. There was no interest charged during the year.
During the year Optibiotix Limited transactions with Probiotix Limited were as follows: -
•
•
•
£490,786 (2022:£440,663) for salaries and administration costs;
£67,700 (2022: £60,676 income received on behalf of Probiotix limited; and
£425,639 repayments received.
There was no interest charged during the year. The remaining balance of £27,617 was received after the year end.
14. Cash and Cash Equivalents
Group Company
2023
£’000
2023
£’000
2022
£’000
Cash and bank balances 635
1,052
434
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 (2022: 91,190,661)
No new shares were issued during the year.
16. Reserves
2023
£’000
1,824
1,824
2022
£’000
865
2022
£’000
1,824
1,824
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.
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.
51
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
17. Trade and other payables
Group Company
2023
Current £’000
2023
£’000
2022
£’000
Accounts Payable 56
Accrued expenses 75
Other payables 49
Total trade and other payables 180
191
70
17
278
7
67
8
82
2022
£’000
34
39
10
83
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% (2022: 25%).
The movement on the deferred tax account is as shown below:
At 31 December
Movement in the period
At 31 December
2023
£’000
365
(13)
352
2022
£’000
552
(187)
365
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. Related Party Disclosures
Transactions and balances with Probiotix Health Plc are set out in note 13.
Key Management Personnel (KMP) disclosures have been made under note 4.
20. Ultimate Controlling Party
The Board consider that there is no overall controlling party.
Annual Report and Accounts 2023 52
Notes to the Financial Statements (continued)
21. 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
2023 2022 2023
No. No. £
2022
£
Outstanding at the beginning of the period 7,182,907 7,632,907 0.092
Granted during the period – 500,000 –
Forfeited/cancelled during the year (325,000) (950,000) 0.52
Exercised during the period – – –
Outstanding at the end of the period 6,857,907 7,182,907 0.08
0.18
0.02
0.70
–
0.092
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 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 are 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 475 days (2022: 830 days)
and the maximum term is 10 years.
The share price per share at 31/12/23 was £0.27 (31/12/2022: £0.13)
Where share options were cancelled 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.
53
OptiBiotix Health Plc
Notes to the Financial Statements (continued)
21. Share Based payment Transactions (continued)
(ii) 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
2023 2022 2023
No. No. £
2022
£
Outstanding at the beginning of the period – 329,336 –
Exercised – (125,060) –
Cancelled – (204,276) –
Outstanding at the end of the period – – –
0.08
0.08
–
0.08
There were no warrants in issue at 31 December 2023.
A charge of £NIL (2022: £Nil) has been recognised during the year for the share based payments over the vesting period.
22. 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.
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.
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.
Annual Report and Accounts 2023 54
Notes to the Financial Statements (continued)
22. Financial Risk Management Objectives and Policies (continued)
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.
23. Post Balance Sheet Events
On 25 March 2023 the company issued and allotted 6,627,500 shares of 2 pence per share exercised at a price of 20 pence per share
in the capital of the company.
On 25 March 2023 Mr Graham Myers, recently appointed Director of the company acquired 125,000 shares in the company
representing 0.13% of the Company’s issued share capital at a price of 20 pence per share.
55
OptiBiotix Health Plc
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
Peterhouse Capital Limited, 3rd Floor, 80 Cheapside, London, EC2V 6EE on 8 August 2024 at 12:00 noon for the following purposes:
1.
2.
3.
4.
5.
To receive the Company’s Report and Accounts for the year ended 31 December 2023.
To re-elect Stephen O’Hara, who retires by rotation, as a Director.
To re-elect Neil Davidson, who retires by rotation, as a Director
To re-elect Graham Myers, who retires by rotation, as a Director
To re-appoint Gerald Edelman LLP as auditors of the Company and to authorise the Directors to determine their remuneration.
Special Business
To consider and, if thought fit, to pass the following resolutions as to the resolution numbered 6 as an Ordinary Resolution and as
to the resolutions numbered 7 as Special Resolutions:
6.
7.
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 £652,954.24 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 2025,
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 6, 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 £587,658.82 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 2025, 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
28 June 2024
Registered Office:
Innovation Centre
Innovation Way
Heslington
York
YO10 5DG
Annual Report and Accounts 2023 56
Explanatory Notes to the
Notice of Annual General Meeting
Notes:
1.
A member of the Company is entitled to appoint a proxy or proxies to attend, speak and vote at the meeting in his stead. A
member may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares.
A member may not appoint more than one proxy to exercise rights attached to any one share. A proxy does not need to be
a member of the Company.
2.
To be effective Forms of Proxy can be registered as follows:-
• by visiting 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.
3.
4.
5.
In order for a proxy appointment to be valid the proxy must be received by Share Registrars Limited by 12:00 noon on 6 August
2024
To change your proxy instructions simply submit a new proxy appointment using the methods set out above and in the
notes to the Form of Proxy. Note that the cut-off times for receipt of proxy appointments (see above) also apply in relation
to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded.
To be entitled to vote at the meeting (and for the purpose of the determination by Company of the number of votes they
may cast), members must be entered in the Register of members at 12:00 noon on 06 August 2024 (“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.
57
OptiBiotix Health Plc
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 2023.
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
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 at the first AGM after their
appointment.
Resolution 5
The Auditors are required to be re-appointed at each Annual General Meeting at which the Company’s Audited Accounts are
presented.
Resolution 6
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 £652,954.24 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 7
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 £587,658.82. This resolution will be proposed as a special resolution.
Annual Report and Accounts 2023 58
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.
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