Physiomics Plc
Annual Report and Financial Statements
For the Year Ended
30 June 2023
Company Registration No. 04225086
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Contents
OFFICERS AND PROFESSIONAL ADVISORS
HIGHLIGHTS
CHAIRMAN AND CHIEF EXECUTIVE OFFICER’S STATEMENT
STRATEGIC REPORT
DIRECTORS’ REPORT
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF PHYSIOMICS PLC
INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2023
STATEMENT OF COMPREHENSIVE INCOME
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2023
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2023
CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2023
NOTES TO THE FINANCIAL STATEMENTS
4
5
6
8
16
24
30
31
32
33
34
35
3
Officers and Professional Advisors
DIRECTORS
Dr J S Millen
Dr C D Chassagnole
Dr T H Corn
Mr S Kumar
SECRETARY
Strategic Finance Director Limited
REGISTERED OFFICE
The Magdalen Centre
Robert Robinson Avenue
Oxford Science Park
Oxford
OX4 4GA
REGISTRAR
Link Group
Central Square
29 Wellington Street
Leeds
LS1 4DL
BANKER
National Westminster Bank Plc
Norwich Gentleman’s Walk
Norwich
Norfolk
NR2 1NA
SOLICITOR
Mishcon de Reya LLP
Merlin Place
Milton Road
Cambridge
CB4 0DP
Chairman and Chief Executive
Chief Operating Officer
(Appointed 1 September 2022)
AUDITOR
Shipleys LLP
10 Orange Street
Haymarket
London
WC2H 7DQ
BANKER
Barclays Bank UK Plc
Leicester
LE87 2BB
NOMINATED ADVISER
Strand Hanson Limited
26 Mount Row
Mayfair
London
W1K 3SQ
BROKER
Hybridan LLP
3rd Floor, Moor Place
1 Fore Street Avenue
London
EC2Y 9DT
Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in the United
Kingdom.
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Highlights
Financial Highlights
•
•
•
•
•
•
Total income (revenue and grant income) decreased 33% to £605,734 (2022: £900,707)
The operating loss increased 60% to £573,733 (2022: £359,114)
The loss after taxation increased 89% to £477,257 (2022: £253,138)
At 30 June 2023, the surplus of shareholders’ funds was £531,720 (30 June 2022: £974,807)
Cash and cash equivalents at 30 June 2023 of £416,592 (30 June 2022: £687,674)
Order pipeline of potential projects that could start in the current financial year ending 30 June
2024 of over £1m.
Operational highlights
•
•
•
•
•
•
•
•
Completion of a fundraise to raise gross proceeds £380,477 to fund further expansion and diversification
of the Company’s client base, expansion of its consulting business into the adjacent area of
pharmaceutical biostatistics services and exploration of opportunities around its personalised oncology
software offering
Successful completion of the NIHR-sponsored PARTNER study at Portsmouth Hospitals University
NHS Trust
Announcement of collaboration with Beyond Blood Diagnostics for personalised cancer treatment
Announcement of collaboration with wholly owned ValiRx subsidiary Inaphaea Biolabs Ltd
Podium presentation at American Association for Cancer Research (AACR) on project with client
Merck KGaA
First contract directly with Cancer Research UK (relating to the clinical development of Aleta
Biotherapeutics ALETA-001)
Follow on contracts with existing clients Merck KGaA, Numab Therapeutics, Ankyra Therapeutics
and Bicycle Therapeutics
Appointment of a second highly experienced independent Non-Executive Director, Shalabh Kumar
Post period end
•
•
•
Received £339k in net proceeds from the fundraise
Closed four deals with three existing and one new customer
Announced the recruitment of an experienced Chief Operating Officer, Dr Peter Sargent
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Executive Chairman and Chief Executive Officer’s Statement
Overview
In what was a difficult year for the Company, its total income was significantly impacted by cost reduction
measures carried out by a major client, however these were partially mitigated by Company initiatives (taken
over several years and still ongoing) to diversify its client base, with the proportion of revenues derived from
its largest customer falling from 85% in FY19 to less than 35% in FY23. As a result of this diversification drive,
the Company took on a significant volume of repeat business (from clients that have been with us for up to five
years) as well as attracting new clients including Aleta Biotherapeutics (through CRUK), Arjuna Therapeutics
and the University of Sheffield. For the first time ever, the Company has felt in a position to quantify the value
of its pipeline of potential new contracts that could start in the current financial year which remains at over
£1m despite four opportunities having been converted into signed projects during August. This was facilitated
through the implementation of a formal CRM process to manage and track opportunities.
The Company completed its personalised dosing PARTNER trial in Portsmouth and is actively exploring possible
augmentation of the tool to incorporate the effect of the use of the biological product G-CSF, in preventing
neutropenia, with a view to developing a risk scoring algorithm for use by clinicians treating patients with this
drug. To complement its in-house activities in this area the Company was further pleased to announce an
important collaboration with Beyond Blood Diagnostics.
Finally, the Company completed a fundraise to fuel continued diversification of its client base, exploration of
further personalised dosing initiatives and expansion of its consulting activities into the field of biostatistics.
Financial Review
The Company’s total income for the year ended 30 June 2023 of £605,734 represents a 33% decrease from the
year ended 30 June 2022, due primarily to reduction in spend by the Company’s largest client but partially
mitigated by increased revenues from a diversified client base.
Largely as a result of lower revenues, the loss after taxation increased 89% to £477,257 (2022: £253,138).
At 30 June 2023, the surplus of shareholders’ funds was £531,720 (30 June 2022: £974,807) of which cash and
cash equivalents were £416,592 (30 June 2022: £687,674). However, this was just prior to receipt of funds
from a fundraise completed on 3rd July 2023 whose gross proceeds were £380,477.
Staff
The Company continued to build its technical team with the addition of two highly qualified new scientists,
chosen from among a strong field of applicants. The Company continues to attract significant interest from
those who want to be involved at the cutting edge of cancer care and data modelling.
Staff utilisation rates are regularly reviewed as part of the Company’s workforce planning process and the
Company would like to thank all its staff for their continuing hard work and commitment during the year.
Outlook
The impact of the Company’s strengthened Board is already being felt through the implementation of new
marketing activities, collaborations such as with Inaphaea and Beyond Blood and through the proposed
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expansion of its consulting business into the field of biostatistics. The Company is looking forward to a
successful financial year 2024 during which it aims to achieve a new best ever level of total income, generated
from its current core business and emerging biostatistics consulting offering.
Dr Jim Millen, Executive Chairman and Chief Executive Officer
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Strategic Report
Principal activities
Physiomics is engaged in providing consulting services to pharmaceutical companies in the areas of outsourced
quantitative pharmacology and computational biology, using a combination of industry standard technologies
and its own proprietary technology platform, Virtual Tumour™. In simple terms, this means helping companies
to put the right drugs together, at the right dose, in the right types of cancer to help achieve the best possible
results at the lowest cost.
Modelling and simulation using Virtual Tumour™ and other tools
The Company’s focus is almost exclusively on the provision of modelling, simulation and data analysis services,
covering the full range of oncology R&D and with a focus on quantitative pharmacology techniques. The
Company generates fee for service revenues by providing insights to clients based on its modelling. The
Company utilises its proprietary Virtual Tumour™ predictive software, industry standard tools (such as NONMEM
and MATLAB), as well as developing bespoke models using the R programming language. Extensions to Virtual
Tumour™ have been developed over the last few years to address specialist areas such as immuno-oncology,
DNA damage repair inhibitors, radiation therapy and other areas of specialism. Projects often require a blend
of several approaches to deliver the optimal insights to clients. Client companies rely heavily on the knowledge
and experience of our team when evaluating data and devising new programmes. The team’s exposure to and
expanding expertise in a wide range of cancer treatment modalities is attractive to new and existing clients.
The Company’s expertise in the late discovery, preclinical and clinical phases of pharmaceutical R&D, enables
it to add value by helping companies to efficiently derive insights from their data. This is achieved in a variety
of ways ranging from data analysis, visualisation and interpretation, to mathematical modelling of the
performance of drugs. The end result is that our clients are in a better position to optimise the treatments
they are developing by selecting the right targets, drugs, dosages, timing and combinations. We believe that
we add particular value in early development during the transition from pre-clinical to first-in-human studies.
We believe our experience and capabilities have been helpful in supporting clients in identifying optimal clinical
trial designs and justifying them to regulatory authorities. In recent projects, the Company has been able to:
• Work with one biotech company to support the selection of its first human dose for its lead product
• Work with another biotech company to model the PK of its drug, confirming its potential advantages
vs a competitor and contributing to its eventual acquisition
•
•
Support a big pharma company in optimising the balance of efficacy and toxicity for complex
combination cancer regimens
Support another big pharma in exploring the mechanism of action of a new immune-oncology drug
targeting NK cells and creating a model to predict its efficacy in preclinical and clinical settings
Personalised Medicine
In addition to its core modelling and simulation business, the Company has continued to develop its technology for
use in the field of personalised medicine. The term “personalised medicine” is used in many ways but is most often
associated with the use of genetic markers in the selection of drugs to treat a particular group of patients. Physiomics’
approach has been to use its expertise in interpreting pre-clinical and clinical cancer data to help predict when to
8
treat patients and with what dose of drug. This approach relies on advanced analytical techniques, many of which
(such as machine learning and neural networks) are in the field of artificial intelligence (AI). To date this work has
been funded by two Innovate UK Grants and one NIHR grant and has not drawn materially on shareholder funds. The
Company completed its observational “PARTNER” study at Portsmouth University Hospitals NHS Trust which validated
the ability of the tool to predict levels of neutropenia. Although this was felt to be of interest by clinicians, it was
determined that the tools use to guide the use of the expensive biological drug GCSF (used to counteract neutropenia)
might have a higher commercial value and the Company is currently actively exploring ways to further develop its
tool to facilitate this.
During the year, the Company’s US partner DoseMeRx announced that it had been divested by its owner Tabula Rasa
Healthcare (TRHC) and acquired by a private equity company. Since then, the Company has re-established contact
with DoseMeRx and discussions are ongoing around how the Company’s tool might be used in the US.
In addition to this partnership, the Company also entered into a collaboration with UK based start-up Beyond
Blood Diagnostics which is developing a miniature device to measure blood counts including white cell levels
which are required to calibrate our tool for individual patients. Feedback from clinicians suggests that enabling
patients to undergo these diagnostic tests in a primary care or home setting would facilitate use of our tool
and as such we are actively exploring opportunities to work with Beyond Blood.
Business Model
The Company’s main commercial business is the provision of consulting services which rely substantially on our
Virtual Tumour™ pre-clinical and clinical models that are proprietary to the Company. Physiomics works
primarily on a fee for service basis, although we are open to and continue to explore other approaches including
risk sharing and collaboration. An example of this includes the risk-sharing deal with ValiRx plc announced in
February 2021 for which terms have been fully disclosed and which would be triggered by the receipt by ValiRx
of licensing revenues related to VAL-201.
Although the Company continues to be open to alternative approaches, it is envisaged that fee-for-service
consulting will continue to be the main driver of revenues in the short to medium term.
Key strengths
The consulting business is the core of the Company’s commercial activity and we believe that it is unique in a
number of respects:
• We focus almost exclusively on oncology. Our team has over 140 years of combined experience in the
development of cancer drugs and computational biology, and in particular of quantitative pharmacology
(essentially analysing how much drug to use and trying to predict what effect it will have). Over the
Company’s lifetime it has completed over 100 projects covering hundreds of targets, cell lines, drugs,
and cancer types;
• We use a proprietary in-house platform called Virtual Tumour™. Although the team can take advantage
of all commonly used modelling, simulation and data analysis techniques in the cancer field, we also
have access to an internally developed platform that is uniquely useful when considering combinations
of cancer drugs (and most anti-cancer regimes eventually involve using multiple agents simultaneously);
• We have particular expertise in the sourcing, curating and analysis of healthcare data. Whether
originating from clients or within the public domain, our team comprises experts in data analysis,
coding and machine learning (AI) techniques that underpin the modelling activities we carry out on
behalf of our clients; and
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• We provide a responsive and dedicated service. Many large companies offer services in the cancer
space though do not restrict themselves to cancer nor to quantitative pharmacology. As a result, we
believe, many of these companies cannot offer the same level of bespoke, responsive service that
Physiomics can and does.
Our strategy
Physiomics’ strategy is to grow its consulting business while actively investigating other possible applications
of our core modelling and simulation capabilities such as in personalised medicine. Our main strategic aims
are as follows:
• Continue to expand and diversify our core consulting business both through repeat business and through
the acquisition of new clients;
•
Supplement our core consulting revenues through grant funded projects, especially in the field of
personalised medicine (CRUK, Innovate UK, NIHR etc);
• Expand our core consulting business into related fields, starting with biostatistics. This will be the
subject of further announcements later this calendar year;
• Develop new, complementary areas of business such as personalised medicine and other service
offerings in drug discovery and development that can add long term value to the business.
Obligations under s172 of the Companies Act
The Directors are mindful of their obligations under s172(1) of the Companies Act 2006 to act in good faith to
promote the success of the Company for the benefit of its members as a whole, and in doing so have regard
(amongst other matters) to the following:
Principle
Company’s actions
The likely consequences of any decision in the long
term.
The Company has a long term vision as set out in this
report.
The interests of the company's employees.
The need to
relationships with suppliers, customers and others.
foster the company’s business
The Company values its employees and implements
training, offers development opportunities and has in
place appropriate incentive programs to support
their retention.
The Company spends significant effort in reaching
out to new and existing customers and in soliciting
their feedback following engagements.
The impact of the company’s operations on the
community and the environment.
The Company’s operations have minimal impact on
the community and environment.
The desirability of the company maintaining a
reputation for high standards of business conduct.
The Company maintains a high standard of business
ethics, complying with the QCA code for corporate
governance.
The need to act fairly as between members of the The Company treats all members equitably and
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Principle
company.
Review of Business
Company’s actions
attempts to ensure a timely and accurate flow of
information to all members.
The Company is principally engaged in providing consulting services to pharmaceutical companies in the areas
of outsourced quantitative pharmacology and computational biology.
• Total income (revenue and grant income) decreased 33% to £605,734 (2022: £900,707)
• The operating loss increased 60% to £573,733 (2022: £359,114)
• The loss after taxation increased 89% to £477,257 (2022: £253,138)
• At 30 June 2023, the surplus of shareholders’ funds was £531,720 (30 June 2022: £974,807)
• Cash and cash equivalents at 30 June 2023 of £416,592 (30 June 2022: £687,674)
Consulting Business
Physiomics’ consulting business is at the heart of its offering to clients. The Company uses its proprietary
Virtual Tumour™ software platform but also develops mathematical models from scratch and leverages models
in the public domain. It is a combination of our technology and the oncology experience of our team that
enables us to be able to deliver clients both a targeted product offering that meets their needs whilst at the
same time delivering value for money. We believe that we are unique in offering a combination of:
• Deep experience and knowledge of oncology;
• An exclusive focus on model-based approaches to supporting our clients’ R&D projects; and
• A level of flexibility and responsiveness that is not typically found in larger organisations.
We have continued to develop our brand through a variety of marketing and business development activities
including:
• Engagement of an external marketing lead to support development and (working with our Head of BD)
execution of a marketing strategy
• Continued use of social media to engage with current and potential new clients;
• Attendance at key conferences such as this year at AACR where our poster (in collaboration with Merck
KGaA) was upgraded to a podium presentation; and
•
Further development of our website to include case studies based on actual client projects.
The Company has been particularly successful in attracting repeat business this year from clients such as Numab
Therapeutics and Bicycle Therapeutics which have helped to offset a reduction in revenues from long-standing
client Merck KGaA (although at the time of writing Merck has just signed its first new project with us since
2022).
The Company’s clients in this financial year have been located in the USA, UK, EU and Switzerland. In terms
of the mix of work, we continue to work across the full spectrum of R&D from discovery to development, though
we continue to focus increasingly on translational projects involving assets entering clinical development for
the first time. This is particularly exciting, as it raises our profile and can involve exposure to regulatory
authorities. The Company continues to work in the immuno-oncology space with several of its clients, and it is
11
anticipated that the industry focus on this treatment approach is likely to continue for some time.
Personalised Medicine
The personalised medicine and digital health space continues to generate significant interest from both
investors and healthcare systems. Many start-ups in this area focus on the use of genetic markers or the pattern-
recognition capabilities of artificial intelligence applications. However, we believe that there is a significant
opportunity in the analysis of existing clinical data to identify better ways to treat patient using existing drugs
and procedures.
The Company has developed a tool for personalised dosing, funded mainly by two Innovate UK and one NIHR
grant as noted above.
Strategic and financial performance indicators
The Company is focused on the creation of long-term value for its shareholders.
The Directors consider that the key performance indicators are those that communicate the financial
performance and strength of the Company as a whole, these being revenue, profitability, and shareholders’
funds. As well as looking at annual performance, the Board consider 3 year rolling figures that smooth variation
in individual years.
Total revenues during the last five financial years (year ended June 2019 to year ended June 2023) exceed the
total revenues of the seventeen years prior to that.
Considering performance trends across periods, total income for the past 3 financial years (year ended June
2021 to year ended June 2023) has averaged £746k annually, compared with £713k for the 3 years before that
(year ended June 2018 to year ended June 2020). The delayed client projects in FY23 have reduced the 3 year
average upward trend however it remains upward.
Similarly, loss after tax for the past 3 financial years (year ended June 2021 to year ended June 2023) has
averaged £320k, compared with an average of £117k for the 3 years before that (year ended June 2018 to year
ended June 2020). These increases result mainly from increased investment in technical and business staff
intended to drive the Company’s key strategic initiatives and increase revenues over time.
The Board anticipate improvements in both these annual 3 year average trends
Year-end net assets at 30 June 2023 of £532k have fallen from their year-end peak at June 2020 of £1,315k but
remain higher than all year ends prior to and including year end June 2017.
Principal Risks
The Company faces a number of risks and maintains a risk register that identifies specific risks, their potential
impact, their likelihood and mitigating actions. This register is updated as required and on an annual basis as
a minimum. Selected key risks are addressed below.
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Risk
Description
Mitigation
Loss of major
customer
The business has a high dependence on a
single large customer (Merck KGaA). This
leads to the risk that the customer could
significantly reduce or cancel its contracts
with the Company.
Competition
Physiomics operates in a competitive
environment which could lead to pricing
pressure. Whilst the business uses its own
proprietary technology a competitor could
attempt to replicate its Virtual Tumour™
technology.
Over the course of the financial year ended 30 June
2023 Merck did in fact take cost containment measures
affecting its US operations which led to a significant
reduction in Company revenues as noted in several
Company press releases. Fortunately the Company had
already taken steps to broaden its customer base (and
continued to do so) such that the adverse effect of the
reduction in Merck revenue was partially mitigated.
The Company continues to foster a close relationship
with its main big pharma client Merck KGaA and post
the year end has signed a further agreement with this
client.
Our focus on oncology and the way in which we employ
Virtual Tumour™ requires a combination of technology
and specialised skills, which we believe is hard to
replicate.
We continually develop our model to improve the scope
and applicability of the technology, adding further
value to our clients and differentiating our service from
our competitors.
In addition, in the last three years we have developed
a personalised medicine offering that we are currently
seeking to commercialise and which would help reduce
dependency on our consulting business.
We are in parallel seeking other ways in which to
broaden the base of activities of the Company and in
particular recently announced a proposed expansion of
its consulting business into the field of biostatistics.
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Risk
Description
Mitigation
Personnel &
skills
The success and future growth of the
Company is in part dependent on the
continued performance and delivery of
certain Directors, managers, key staff and
contractors. The Company operates in a
highly specialised field where there is
strong competition for required skills and
talent.
Key personnel leaving the Company could
lead to a short-term reduced capacity to
service client projects.
Financial
The financial risks faced by the Company
include the ability to cover working capital
needs, raise sufficient funds to support the
Company through to profitability and failure
to secure further contracts.
The process of winning major contracts is
typically protracted and the Company
operates in a competitive environment.
This means the Company often faces
significant uncertainties in its cash flow.
The Company seeks to recruit, develop, and manage
talent on a continuous basis and has built a network of
contracted specialists who can provide additional
resource when required.
In order to attract the best talent, the Company offers
competitive packages to its staff which includes a share
option scheme, private medical insurance and flexible
working. A collegiate working environment and
opportunities
professional
personal
development also help to maintain staff satisfaction.
and
for
Over the course of this financial year, the Company
took on two new technical team members from a field
of highly qualified applicants.
financial uncertainties by
The board addresses
monitoring actual performance against
internal
projections and responding to significant variances.
The Company also employs tight cost controls across
the business and has from time to time raised funds
from investors.
The Company seeks to ensure cash availability for
working capital purposes and to reduce credit risk
arising from cash and short-term deposits with banks
and other financial institutions by holding deposits with
an institution with a medium grade credit rating or
better.
In July 2023 the Company completed a fundraise of
£380k gross to support expansion including into the
related biostatistics field and for the purposes of
working capital.
Regulation
Changes
The Company’s customers are
predominately pharmaceutical companies
who require outsourced quantitative
pharmacology and computational biology
services. There is a risk that the business
model is impacted by future changes in
regulations in the medical and
pharmaceutical industry.
The Company regularly reviews regulations changes
through proactive discussions with key industry
officials, professional advisors and regulatory bodies
where appropriate.
Major agencies such as the FDA are actively promoting
the use of modelling and simulation and issue advisory
papers which set out their thinking.
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Risk
Description
Mitigation
Systems &
infrastructure
The Company is dependent on its IT
technical infrastructure and systems for the
management of its core operations and
research and development programmes.
Continuity of access to data and integrity of data is
maintained through the implementation of a system of
data storage, offsite backup and monitoring of key
coding and modelling data. The company maintains
CyberEssentials accreditation of its systems hardware
and processes in order to increase resilience vs cyber
related attacks and risks.
Prevailing
economic
conditions
The biotech market has seen a significant
reduction in funding from both public and
private sources since the beginning of 2022.
Publicly listed biotech companies share
prices have come under some pressure as a
result and our clients’ ability to raise capital
may be impacted by this as well as adverse
sentiment related to energy prices and the
war in Ukraine.
Several projects that were anticipated to be signed in
the financial year 2023 were cancelled or delayed. It
is not possible to say for sure what combination of
factors led to this however the Company continues to
invest in marketing activities to attract new customers
and has been successful in generating repeat business.
In addition, as noted above, the Company announced
its intention to expand its consulting business into the
related field of biostatistics consulting which further
broadens the base of activity and mitigates the risks of
being too narrowly focused.
By order of the board
Dr Jim Millen
Executive Chairman and Chief Executive Officer
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Directors’ Report
The Directors submit their report and the audited financial statements of Physiomics Plc for the year ended 30
June 2023.
Results
There was a loss for the year after taxation amounting to £477,257 (2022 loss after tax: £253,138). In view of
accumulated losses, and given the stage of the Company’s development, the Directors are unable to
recommend the payment of a dividend.
Directors
The directors who served during the year were:
Dr James Millen
Dr C D Chassagnole
Dr T H Corn
Mr S Kumar (from 1 September 2022)
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law
the Directors have elected to prepare the financial statements in accordance with International Financial
Reporting Standards (IFRS) as adopted by the United Kingdom (UK). 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 Company and the financial performance and cash flows of the Company for that year.
The financial statements are required by law, and IFRS as adopted by the UK, to give a true and fair view of
the state of affairs of the Company.
In preparing the Company financial statements, the Directors are required to:
a. select suitable accounting policies and then apply them consistently;
b. make judgements and estimates that are reasonable and prudent;
c. state whether in preparation of the financial statements the Company has complied with IFRS as
adopted by the UK, subject to any material departures disclosed and explained in the financial
statements; and
d. prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Company’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 Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
16
The Directors are also responsible for the maintenance and integrity of the Physiomics Plc website. Legislation
in the United Kingdom governing the preparation and dissemination of the financial statements may differ from
legislation in other jurisdictions.
Substantial shareholdings
The Company has been informed, based on a beneficial ownership search carried out by its registrar, that as
at 14 August 2023, the following individual shareholders had over 3% interests in the issued ordinary shares of
the Company.
Mr Gary Marshall
Shares (m)
Holding %
4,500,000
3.32%
On 14 August 2023, Dr Jim Millen held 1,884,393 ordinary shares and Dr Christophe Chassagnole held 1,102,723
ordinary shares. The holding percentages were 1.39% and 0.81% respectively.
Directors’ remuneration
Details of Directors’ remuneration in the year ended 30 June 2023 is set out below:
Emoluments
£
Bonus Benefits
£
£
Pension
Contributions
£
Total
2023
£
Total
2022
£
Dr J S Millen
125,970
Dr C D Chassagnole
75,555
Mr S Kumar
Dr T H Corn
Dr P B Harper
23,667
20,000
-
Total
245,192
Corporate governance
-
-
-
-
-
-
2,028
10,608
138,606
138,442
1,655
10,267
87,477
80,681
-
-
-
-
-
-
23,667
-
20,000
5,000
-
34,595
3,683
20,875
269,750 258,718
Physiomics Plc has chosen to comply with the Quoted Companies Alliance (“QCA”) Corporate Governance Code.
High standards of corporate governance are a priority for the board, and details of how Physiomics addresses
key governance principles defined in the QCA code are set out below.
1. Establish a strategy and business model which promote long-term value for shareholders
The Company’s business model is focused on helping big pharma and biotech clients to reduce costs and
optimise outcomes of their oncology R&D though modelling and analysis of client and other data. In particular,
17
the Company leverages its own in-house technology, Virtual Tumour™, which is specifically focused on
predicting the effects of combination drug treatments. The Company operates mainly on a fee for service basis
but is also open to other arrangements such as risk-based milestones and licensing although these have not
formed a material part of the Company’s revenues historically. In addition to its commercial business the
Company engages in grant driven projects which do not generate profit but which provide valuable “paid for”
R&D which can then be leveraged through the Company’s commercial activities. The Company aims to deliver
shareholder value by increasing the number and value of its commercial clients and by increasing the amount
and value of grant projects and by investigating the commercial potential of new areas such as personalised
medicine. The Company believes that its strategy will be effective in helping it to meet challenges such as
competitive pressure and the rapid pace of technological change in the pharmaceutical industry.
2. Seek to understand and meet shareholder expectations
The Company maintains a dedicated email address which investors can use to contact the Company which is
prominently displayed on its website together with the Company’s address and phone number. The Company
holds an annual general meeting (“AGM”) to which all members are invited and during the AGM, time is set
aside specifically to allow questions from attending members to any board member. As the Company is too
small to have a dedicated investor relations department, the CEO is responsible for reviewing all
communications received from members and determining the most appropriate response. In addition to these
passive measures, the CEO typically engages with members through a roadshow once or twice each year and
the Company subscribes to the InvestorMeetCompany online investor relations platform.
3. Take into account wider stakeholder and social responsibilities and their implications for long-term
success
In addition to members, the Company believes its main stakeholder groups are its employees and clients. The
Company dedicates significant time to understanding and acting on the needs and requirements of each of
these groups via meetings dedicated to obtaining feedback (see principle 2 above).
In addition, the Company has a close relationship with the University of Oxford and the Oxford University
Hospitals NHS Foundation Trust. Prof Mark Middleton, who leads oncology research at these institutions is an
advisor to the Company and has been a collaborator on several grant projects. The relationship with the
Company is mutually beneficial as the University and NHS Trust also has a mandate to encourage and collaborate
with local businesses.
With regards corporate social responsibility, there is little direct impact of the Company’s day-to-day activities
however the Company is proud that its overarching goal is to support the treatment of cancer, a disease that
has a profound impact on society.
4. Embed effective risk management, considering both opportunities and threats, throughout the
organisation
The Company maintains a register of risks across several categories including personnel, clients, competition,
finance, technical and legal. For each risk we estimate the impact, likelihood as well as identify mitigating
strategies. This register is reviewed periodically as the Company’s situation changes and as a minimum
annually. During such reviews, each risk category is considered by the Directors with a view to understanding
(i) whether the nature, impact or likelihood of any risks has changed, (ii) whether the mitigating actions taken
by the Company should change as a result and (iii) whether any new risks or categories of risk have arisen since
the last review. The Company’s risk register is reviewed by its auditor as part of its annual audit process,
providing a degree of external assurance as to the suitability of its risk management strategy.
18
5. Maintain the board as a well-functioning, balanced team led by the Chairman
The board of Physiomics Plc currently comprises two Executive Directors, two independent Non-Executive
Directors and a secretary (non-director). The board meets at least monthly for one day (except August) and all
current board members have attended all board meetings in the current financial year (since their
appointment). Each Director is re-elected to the board on a rotating basis by a vote of members at the
Company’s AGM.
Executive Directors are employees of the Company. Non-Executive Directors’ contracts require that directors
dedicate a minimum of one day per month. In addition, non-executive directors may provide additional paid
consulting services at rates specified in their contracts.
The Company notes that, following the departure of the former Chairman, Dr Paul Harper, in February 2022,
Dr Jim Millen has fulfilled the roles of both Executive Chairman and CEO. Since then, however, the Company
has taken on two new independent Non-Executive Directors, providing a more balanced ratio of executive and
non-executives on its board. The Company’s board composition, and in particular the role of Chairman, will
continue to be reviewed by the new expanded board over the course of the current financial year, and the
Board is cognisant of the guidance in the QCA Code regarding separation of the roles of Chairman and Chief
Executive Officer.
6. Ensure that between them the directors have the necessary up-to-date experience, skills and
capabilities
The current directors of the Company, together with their experience, skills, and personal qualities relevant
to the Company’s business are outlined below:
• Dr Jim Millen (Executive Chairman & CEO) joined Physiomics in April 2016, bringing over 15 years’
experience in pharmaceuticals and biotechnology gained at a number of blue-chip global companies as
well as smaller UK-based organisations. At Allergan, Jim was responsible for corporate development in
its Europe, Africa and Middle East region where he was pivotal in expanding the Company’s geographical
footprint before moving to a senior role responsible for commercial strategy and market access. Prior
to that, at GSK, Jim held business development roles of increasing responsibility including within the
Company’s innovative Centre of Excellence for External Drug Discovery. Jim has also supported a
number of smaller companies in fund raising and strategic partnering activities. Over the course of his
career he has completed an array of deals worth many hundreds of millions of dollars, spanning
licencing, acquisition, divestment, development and commercialisation. Jim studied medicine at
Queens’ College, Cambridge University and qualified as a doctor from the London Medical School. He
holds an MBA from INSEAD. Jim’s ability to develop and grow businesses and drive towards ambitious
goals is of great value in his role as CEO.
• Dr Christophe Chassagnole (COO) has been involved in systems biology and bio-computing projects since
the mid-nineties, with experience in both academic and industrial environments. His Doctorate was
achieved at the Victor Segalen-Bordeaux II University, and then he held a post doctorate position with
IBVT at Stuttgart University. Before Joining Physiomics Dr Chassagnole worked in France as a senior
researcher for CRITT Bio-Industries (Toulouse) for 3 years. He joined Physiomics in May 2004 as project
leader to develop the technology portfolio of the Company. He was appointed Chief Operating Officer
of Physiomics in May 2007, in this capacity he has initiated and supervised the development of the
Virtual Tumour™ technology. Christophe remains the main source of scientific knowledge on the biology
of cancer and modelling/simulation as it relates to drug development. Christophe maintains his
knowledge through regular literature reviews and is highly valued by clients for this reason. Christophe
is also responsible for managing the Company’s R&D activities and in particular of our initiatives in
personalised medicine.
19
• Dr Tim Corn (NED) qualified in medicine at King's College Hospital and, after becoming honorary
Consultant and Senior Lecturer, joined the pharmaceutical industry in 1983. He has held senior
positions in both big and small pharma as well as at the MHRA and became CMO of several small but
highly successful venture-backed companies, such as EUSA Pharma and Zeneus Pharma. He has played
a key role in more than twenty regulatory approvals in the USA and Europe, is the author of more than
forty scientific publications, and was elected Fellow of both the Faculty of Pharmaceutical Medicine
and the Royal College of Psychiatrists.
• Mr Shalabh Kumar (NED) is a proven business executive with over 30 years of experience within the life
sciences consulting and services industry. Shalabh co-founded, and subsequently was the Chief
Executive Officer of Kinapse, a life sciences consulting and outsourcing service provider. The company
was later acquired by Syneos Health® (Nasdaq: SYNH) after growing to employ over 600 people across
UK, India and US. Prior to that he has worked in Accenture, Gillette (Procter & Gamble) and Unilever.
More recently, Shalabh has been working as an independent strategy consultant and angel investor in
the life sciences industry, working with biopharmaceutical companies, life sciences services and
technology companies and private equity firms. Recent roles include Chairman of the board of
Clustermarket Ltd, a lab software start-up; independent strategy consultant to the life sciences R&D
group of Accenture plc (NYSE: ACN); and Global Head of Services at Navitas Life Sciences, a technology-
backed life sciences contract research organisation. Shalabh is also Chairman of Pharmalancers Ltd, a
UK-based life sciences services tech start-up.
• Anthony Clayden, of Strategic Finance Director Ltd (Secretary) is Head of Finance and Company
Secretary with over 24 years’ experience directing or advising over 50 high growth potential businesses
of differing size and complexity and brings broad experience of strategic, operational, and financial
matters. His career encompasses numerous businesses in the life sciences and healthcare sector
including 6 years as Chief Financial Officer of AIM quoted Futura Medical Plc where he was involved in
its IPO and a series of placings. Previously, Anthony worked with KPMG and PwC on a range of corporate
finance matters including fundraisings, company sales and acquisition advice. Anthony has a B.Sc.
(Hons) in Natural Sciences from Durham University and is a Qualified Chartered Accountant. Although
Anthony is not a Director of the Company, he provides invaluable advice on all matters financial.
The Company holds annual briefings for the board covering regulations that are relevant to their role as
directors of an AIM-quoted company.
The Company has not to date sought external advice on keeping Director’s skills up to date but believes that
their blend of past and ongoing experience provides them with the relevant up to date skills needed to act as
board members for a small company. The Company keeps close contact with its NOMAD and nominated broker
on all such issues
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
Evaluation of the performance of the board has historically been implemented in an informal manner. The
board will formally review and consider the performance of each director at or around the time of the
Company’s annual general meeting.
On an ongoing basis, board members maintain a watching brief to identify relevant internal and external
candidates who may be suitable additions to or backup for current board members, however, the directors
consider that the Company is too small to have either an internal succession plan and that it would not be cost
effective to maintain an external candidate list prior to the need arising.
8. Promote a corporate culture that is based on ethical values and behaviours
The board believes that the promotion of a corporate culture based on sound ethical values and behaviours is
essential to maximise shareholder value. The Company maintains and annually reviews a handbook that includes
20
clear guidance on what is expected of every employee and officer of the Company. Adherence of these
standards is a key factor in the evaluation of performance within the Company, including during annual
performance reviews. In addition, staff matters are a standing topic at every board meeting and the CEO reports
on any notable examples of behaviours that either align with or are at odds with the Company’s stated values.
The directors believe that the Company culture encourages collaborative, ethical behaviour which benefits
employees, clients and shareholders. The directors further believe that all employees and consultants have
worked in line with the Company’s values during this financial year.
9. Maintain governance structures and processes that are fit for purpose and support good decision-
making by the board
The board of the Company, together with its sub-committees, is responsible for the following:
• The setting of and execution of the overall strategy of the Company;
• The setting of financial targets and monitoring of the Company’s performance vs these targets on a
monthly basis;
• The preparation and approval of interim and final results for the Company;
• The commissioning and oversight of the audit of the Company’s full year results;
• The preparation and approval of the Company’s annual report;
• The preparation of resolutions to be voted upon in the Company’s Annual General Meeting;
• Approval of regulatory communications;
• The setting of guidelines for remuneration of employees, Directors and consultants, including where
appropriate long-term incentives such as share option schemes;
• The approval and oversight of any changes to the capital structure of the Company such as the raising
of capital through placings;
• The identification, evaluation and monitoring of key strategic risks to the Company’s business; and
• The employment of key officers and Directors of the Company (the latter as recommendations to be
voted on at the Company’s AGM).
The key board roles are as follows:
• Chairman: The primary responsibility of the chair is to lead the board effectively and to oversee the
adoption, delivery and communication of the Company’s corporate governance model. The chair is also
responsible for making sure that the board agenda concentrates on the key issues, both operational
and financial, with regular reviews of the Company’s strategy and its overall implementation
• CEO: Charged with the delivery of the business model within the strategy set by the board. Works with
the other directors in an open and transparent way. Keeps the board up-to-date with operational
performance, risks and other issues to ensure that the business remains aligned with the strategy
The board has two sub-committees appointed by the board of directors. They are as follows:
• Audit Committee: The Committee meets to consider matters relating to the Company's financial
position and financial reporting. The Committee reviews the independence and objectivity of the
external auditors, Shipleys LLP, as well as the amount of non-audit work undertaken by them, to satisfy
itself that this will not compromise their independence. Details of the fees paid to Shipleys LLP during
the current accounting period are given in the notes to the accounts. The Audit Committee currently
comprises Dr Tim Corn and Dr Christophe Chassagnole, with Strategic Finance Director Ltd (Company
Secretary) attending as secretary
21
• Remuneration Committee: The Remuneration Committee has been established primarily to determine
the remuneration, terms and conditions of employment of the Executive Directors of the Company. Any
remuneration issues concerning Non-Executive Directors are resolved by this Committee and no Director
participates in decisions that concern his own remuneration. The Remuneration Committee comprises
Mr Shalabh Kumar and Dr Jim Millen, with Strategic Finance Director Ltd (Company Secretary) attending
as secretary
Finally, the Company gives regular consideration to how best to evolve its governance framework as it grows. It
currently does not have a nominations committee.
10. Communicate how the Company is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
On the Company’s website shareholders can find all historical RNS announcements, interim reports and annual
reports. Annual Reports and Annual General Meeting Circulars are made available to all registered shareholders
or nominees via electronic shareholder communication system managed by the Company’s registrar and results
of Annual General Meeting votes are also published on the Company’s website. The Company’s website allows
shareholders and other interested parties to sign up to a mailing list to enable them to directly receive
regulatory and other company releases. As described earlier, the Company also maintains email and phone
contacts which shareholders can use to make enquiries or requests.
Environmental and Social Governance
The Company has a relatively small environmental footprint and implements various policies to ensure it is kept
to a minimum, including:
• Use of modular office space with services shared with other occupiers
• Adoption of flexible “hot-desking”, especially in light of new more flexible home/ office working
models post-COVID
• Recycling of office waste where possible
The activities of the company are targeted at supporting companies developing drugs and therapies to fight
cancer and in addition, the computer-based modelling we undertake serves to reduce the volume of animal
testing needed in developing such therapies.
Finally, in terms of diversity and inclusion, of eight employees, four are women and three are non-UK nationals.
Post balance sheet events
On 3 July 2023, a date which is after the reporting date but prior to the signing of these financial statements,
the Board allotted 38,047,700 ordinary shares.
34,500,000 of these shares were placed through the Company's broker Hybridan LLC at £0.01 per share.
1,000,000 shares were issued via a direct subscription to the Directors of the Company and 2,547,700 shares
were placed via a retail subscription offer. All shares were placed at £0.01 per share.
There were no additional post reporting events to note.
22
Statement as to disclosure of information to auditors
The Directors in office on 27 September 2023 have confirmed that, as far as they are aware, there is no relevant
audit information of which the auditors are unaware. Each of the Directors have confirmed that they have
taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant
audit information and to establish that it has been communicated to the auditors.
Going concern, responsibilities and disclosure
After making appropriate enquiries, the Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for the foreseeable future. For this reason, they
continue to adopt the going concern basis in preparing the financial statements.
Internal controls and risk management
The board is responsible for the Company’s system of internal control and risk management and for reviewing
its effectiveness. The Directors have a reasonable expectation that the Company will safeguard the Company’s
assets. The risk management process and internal control systems are designed to manage rather than eliminate
the risk of failing to achieve business objectives and can only provide reasonable, but not absolute, assurance
against material misstatement or loss. The key features of the Company’s system of internal control are as
follows:
• a clearly defined organisational structure and set of objectives;
•
the executive Directors play a significant role in the day to day operation of the business; and
• detailed monthly management accounts are produced for the board to review and take appropriate
action.
Annual General Meeting
The Company values the views of its shareholders and recognises their interest in the Company’s strategy,
performance and the ability of the board. The AGM provides an opportunity for two-way communication and
all shareholders are encouraged to attend and participate. Separate resolutions will be put to shareholders at
the AGM, giving them the opportunity to discuss matters of interest. The Company counts all proxy votes and
will indicate the level of proxies lodged on each resolution, after each has been dealt with on a show of hands.
The Company intends to hold an in-person (rather than online) AGM this year, further details of which will be
announced shortly.
By order of the board
Dr Jim Millen
Executive Chairman and Chief Executive Officer
23
Independent Auditors’ Report to the Members of Physiomics Plc
Opinion
We have audited the financial statements of Physiomics Plc for the year ended 30 June 2023 which comprise
the income statement, the statement of comprehensive income, the statement of financial position, the cash
flow statement, the statement of changes in equity and the related notes. The financial reporting framework
that has been applied in their preparation is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the United Kingdom.
In our opinion:
•
•
•
the financial statements give a true and fair view of the state of the Company’s affairs as at 30 June
2023 and of its loss for the year then ended;
the financial statements have been properly prepared in accordance with IFRSs as adopted by the
United Kingdom; and
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the financial statements section of our report. We are independent of the Company in accordance with
the ethical requirements that are relevant to our audit of the financial statements in the UK, including the
FRC’s Ethical Standard as applied to listed entities and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
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 company'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.
24
Our assessment of risks of material misstatement
The assessed risks of material misstatement described below are those that had the greatest effect on our
audit strategy, the allocation of resources in the audit and directing the efforts of the engagement team.
In our opinion the financial statements:
• give a true and fair view of the state of the company's affairs as at 30 June 2023 and of its loss for the year
then ended;
• have been properly prepared in accordance with UK adopted international accounting standards; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Risk
Management override of controls
Journals can be posted that significantly alter
the Financial Statements and potentially give
rise to the risk of fraud.
How the Scope of our audit responded to the risk
We examined journals posted around the year end,
specifically focusing on areas which are more easily
manipulated such as accruals, prepayments, investment
valuation and the bank reconciliation.
Going Concern
There is a risk that the Company is not a going
concern.
Fraud in Revenue Recognition
There is a risk that revenue is materially
understated due to fraud.
Accounting Estimates
Potential risk of
inappropriate accounting
estimates giving rise to misstatement in the
accounts.
Overstatement of Administrative Expenses
There
administrative expenses are overstated.
the Company’s
is a
that
risk
We reviewed the Directors’ assessment of the business
remaining a Going Concern. We compared this assessment
to our own understanding of the risks, and the nature of
the Company’s operations and customer base. We then
conducted a review of going concern
in respect
of reviewing forecasts and current trading performance,
and carrying out stress testing. The work undertaken
considered a period of at least 12 months from the date
of approving these financial statements.
The disclosures in the financial statements adequately
reflect the Directors’ conclusions around the going
concern assumption remains appropriate.
Income was tested on a sample basis from contracts. No
evidence of fraud or other understatement was identified.
All areas were examined to identify any potential
accounting estimates. These estimates were then
reviewed and tested for adequacy.
A proof in total calculation and substantive testing were
both undertaken and no evidence of overstatement was
identified.
Grant Income
There is a risk that grant income may be
materially misstated.
Grant income was reviewed and a sample basis from
contracts. No evidence of misstatement was identified.
25
Our audit procedures relating to these matters were designed 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.
Our application of materiality
We define materiality as the magnitude of misstatement in the Financial Statements that of materiality makes
it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced.
We use materiality both in planning and in the scope of our audit work and in evaluating the results of our
work.
We determined materiality for the Company to be £18,172. We agreed with the Audit Committee that we would
report to them all audit differences in excess of 5% of materiality, as well as differences below that which
would, in our view, warrant reporting on a qualitative basis. We also report to the Audit Committee on
disclosure matters that we identified when assessing the overall presentation of the Financial Statements.
An overview of the scope of our audit
An audit involves obtaining evidence about the amounts and disclosures in the Financial Statements sufficient
to give reasonable assurance that the Financial Statements are free from material misstatement, whether
caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to
the Company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness
of significant accounting estimates made by the Directors; and the overall presentation of the Financial
Statements. In addition we read all the financial and non-financial information in the Annual Report to identify
material inconsistencies with the audited Financial Statements and to identify any information that is
apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the
course of performing the audit. If we become aware of any apparent material misstatement or inconsistencies
we consider the implications for our report.
Other information
The directors are responsible for the other information. The other information comprises the information
included in the annual report other than the financial statements and our auditor’s report thereon. Our opinion
on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial statements
or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material misstatement of the other information. If,
based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the strategic report and the directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
26
•
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 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, or returns adequate for our audit have not been
received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 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 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 Company or to cease operations,
or have no realistic alternative but to do so.
Our responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below:
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the
Company and determined the most significant are those that relate to the reporting framework (IFRS,
the Companies Act 2006)) and the relevant tax compliance regulations in which the Company operates.
• We understood how the Company is complying with those frameworks by making enquiries on the
27
management and those responsible for legal and compliance procedures. We corroborated our enquiries
through our review of board minutes and any correspondence received from regulatory bodies.
• We assessed the susceptibility of the Company’s financial statements to material misstatement,
including how fraud might occur by enquiring with management during the planning, fieldwork and
completion phase of our audit. We considered the controls that the Company has established to address
risks identified, or that otherwise prevent, deter and detect fraud and how management monitors those
controls. Where the risk was considered to be higher, we performed audit procedures to address each
identified fraud risk including revenue recognition. These procedures included testing manual journals
and were designed to provide reasonable assurance that the financial statements were free from fraud
or error.
•
Based on this understanding we designed our audit procedures to identify non-compliance with such
laws and regulations. Our procedures involved journal entry testing, with a focus on manual journals
and journals indicating large or unusual transactions based on our understanding of the business;
enquiries of the management and focus testing.
An auditor conducting an audit in accordance with ISAs (UK) is responsible for obtaining reasonable assurance
that the financial statements taken as a whole are free from material misstatement, whether caused by fraud
or error and in our audit procedures described above. Owing to the inherent limitations of an audit, there is an
unavoidable risk that some material misstatements of the financial statements may not be detected, even
though the audit is properly planned and performed in accordance with the ISAs (UK).
In our opinion, based on the work undertaken in the course of our audit:
•
•
The information given in the strategic report and the director’s 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.
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the director.
Conclude on the appropriateness of the director's use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the company's ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
•
•
•
•
28
auditor’s report. However, future events or conditions may cause the company to cease to continue as
a going concern.
•
Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.
Use of our report
This report is made solely to the Company's members, as a body, in accordance with chapter 3 of part 16 of
the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members
those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the
Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Benjamin Bidnell (Senior Statutory Auditor)
For and on behalf of Shipleys LLP,
Chartered Accountants and Statutory Auditor
10 Orange Street
Haymarket
London
WC2H 7DQ
29
Income Statement for the year ended 30 June 2023
Revenue
Other operating income
Total income
Net operating expenses
Operating loss
Finance income
Loss before taxation
Income tax income
Year
ended
30 June
2023
£
597,354
8,380
605,734
Year
ended
30 June
2022
£
830,266
70,441
900,707
(1,179,467)
(573,733)
(1,259,821)
(359,114)
1,724
142
(572,009)
(358,972)
94,752
105,384
Notes
3
3
4
7
9
for the year attributable to equity
Loss
shareholders
25
(477,257)
(253,138)
Earnings per share (shown in pence)
10
Basic and diluted
(0.49)p
(0.26)p
30
Statement of Comprehensive Income
Loss for the year
Other comprehensive income
Year ended
30 June
2023
£
(477,257)
Year ended
30 June
2022
£
(253,138)
-
-
Total comprehensive income/ (expense) for the year
(477,257)
(253,138)
Attributable to:
Equity holders
(477,257)
(253,138)
31
Statement of Financial Position as at 30 June 2023
Non-current assets
Intangible assets
Property, plant and equipment
Other receivables
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Deferred revenue
Total liabilities
Net current assets
Net assets
Equity
Called up share capital
Share premium account
Other reserves
Retained earnings
Total equity
Notes
12
13
14
14
18
19
22
23
24
25
2023
£
5,479
7,757
180
13,416
2022
£
3,005
14,365
395
17,765
244,385
416,592
409,977
687,674
660,977
1,097,651
674,393
1,115,416
122,656
20,017
142,673
518,304
531,720
126,347
14,262
140,609
957,042
974,807
1,283,096
5,936,478
147,651
(6,835,505)
1,283,096
5,936,478
281,660
(6,526,427)
531,720
974,807
The financial statements were approved by the board of directors and authorised for issue on 28 September 2023.
32
Statement of Changes in Equity for the year ended 30 June 2023
Balance at 1 July 2021
Year ended 30 June 2022:
Loss and total comprehensive income for the year
Issue of share capital
Transfer to other reserves
Share
capital
£
N
o
t
1,282,736
e
s
-
360
-
2
3
Share
premium
account
£
Other
Reserves
Profit and loss
reserves
Total
£
£
£
5,993,993
222,274
(6,273,289)
1,165,714
-
2,485
-
-
-
59,386
(253,138)
(253,138)
-
-
2,845
59,386
Balance at 30 June 2022
1,283,096
5,936,478
281,660
(6,526,427)
974,807
Year ended 30 June 2023:
Loss and total comprehensive income for the
year
Issue of share capital
Transfer to other reserves
Other movements
2
3
-
-
-
-
-
-
-
-
-
-
(477,257)
-
(477,257)
-
34,170
-
34,170
(168,179)
168,179
-
Balance at 30 June 2023
1,283,096
5,936,478
147,651
(6,835,505)
531,720
33
Cash Flow Statement for the year ended 30 June 2023
Notes
£
£
£
£
2023
2022
Cash flows from operating activities
Cash absorbed by operations
32
Tax refunded
Net cash outflow from operating
activities
Investing activities
Purchase of intangible assets
Purchase of tangible fixed assets
Proceeds on disposal of tangible fixed assets
Interest received
(372,422)
105,835
(468,767)
119,374
(266,587)
(349,393)
(3,350)
(3,285)
416
1,724
-
(9,370)
-
142
Net cash used in investing activities
(4,495)
(9,228)
Financing activities
Proceeds from issue of shares
Net cash generated from financing
activities
Net decrease in cash and cash
equivalents
Cash and cash equivalents at beginning of
year
Cash and cash equivalents at end of year
-
2,845
-
2,845
(271,082)
(355,776)
687,674
416,592
1,043,450
687,674
34
Notes to the Financial Statements
1
Accounting policies
Company information
Physiomics Plc is a company limited by shares incorporated in England and Wales. The registered office is
The Magdalen Centre, Oxford Science Park, Robert Robinson Avenue, Oxford, OX4 4GA. The Company’s
ordinary shares of 0.4p each are admitted to trading on the AIM market of the London Stock Exchange plc.
1.1 Accounting convention
The financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS, except as otherwise stated.
The financial statements have been prepared on the historical cost basis. The principal accounting policies
adopted are set out below.
1.2 Going concern
The accounts have been prepared on the going concern basis. The Company primarily operates in the
relatively defensive pharmaceutical industry.
The Company had £416,592 of cash and cash equivalents as at 30 June 2023 (2022: £687,674).
The board operates an investment policy under which the primary objective is to invest in low-risk cash or
cash equivalent investments to safeguard the principal.
The Company’s projections, taking into account anticipated revenue streams, show that the Company has
sufficient funds to operate for the next twelve months. In coming to this conclusion, the Company notes
that current cash and currently contracted projects are projected to cover budgeted expenses for the
majority of this period. In addition to currently contracted projects the Company anticipates a number of
new clients as well as repeat business from some existing clients.
After reviewing the Company’s projections, the Directors believe that the Company is adequately placed
to manage its business and financing risks for the next twelve months. Accordingly, they continue to adopt
the going concern basis in preparing the annual report and accounts.
1.3 Revenue recognition
The revenue shown in the income statement relates to amounts received or receivable from the provision
of services associated with outsourced systems and computational biology services to pharmaceutical
companies.
Revenue from the provision of the principal activities is recognised by reference to the stage of completion
of the transaction at the balance sheet date where the amount of revenue can be measured reliably and
sufficient work has been completed with certainty to ensure that the economic benefit will flow to the
Company.
35
1.4
Intangible assets other than goodwill
Intangible assets acquired separately from third parties are recognised as assets and measured at cost.
Following initial recognition, intangible assets are measured at cost or fair value at the date of acquisition
less any amortisation and any impairment losses. Amortisation costs are included within the net operating
expenses disclosed in the income statement.
Intangible assets are amortised over their useful lives as follows:
Trademarks
Licenses
Useful life
10 years
5 years
Method
Straight line
Straight line
Useful lives are also examined on an annual basis and adjustments, where applicable are made on a
prospective basis. The Company does not have any intangible assets with indefinite lives.
1.5 Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of
depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over
their useful lives on the following bases:
Fixtures and fittings
IT Equipment
3 years straight line
3 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale
proceeds and the carrying value of the asset and is recognised in the profit and loss account.
1.6 Research and development expenditure
Expenditure on research activity is recognised as an expense in the period in which it is incurred.
1.7
Impairment of tangible and intangible assets
Property, plant and equipment and intangible assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For purposes of
assessing impairment, assets that do not individually generate cash flows are assessed as part of the cash
generating unit to which they belong. Cash generating units are the lowest levels for which there are cash
flows that are largely independent of the cash flows from other assets or groups of assets.
1.8 Fair value measurement
IFRS 13 establishes a single source of guidance for all fair value measurements. IFRS 13 does not change
when an entity is required to use fair value, but rather provides guidance on how to measure fair value
under IFRS when fair value is required or permitted. The resulting calculations under IFRS 13 affected the
principles that the company uses to assess the fair value, but the assessment of fair value under IFRS 13
has not materially changed the fair values recognised or disclosed. IFRS 13 mainly impacts the disclosures
of the company. It requires specific disclosures about fair value measurements and disclosures of fair
values, some of which replace existing disclosure requirements in other standards.
36
1.9 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid
investments with original maturities of three months or less.
1.10 Financial assets
Financial assets are recognised in the Company’s statement of financial position when the Company
becomes party to the contractual provisions of the instrument.
Financial assets are classified into specified categories. The classification depends on the nature and
purpose of the financial assets and is determined at the time of recognition.
Financial assets are initially measured at fair value plus transaction costs, other than those classified as fair
value through the income statement, which are measured at fair value.
Trade and other receivables
Trade receivables are recognised and carried at the lower of their original invoiced value and recoverable
amount. Balances are written off when the probability of recovery is considered to be remote.
Impairment of financial assets
Financial assets, other than those at fair value through the income statement, are assessed for indicators
of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events
that occurred after the initial recognition of the financial asset, the estimated future cash flows of the
investment have been affected.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or
when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
1.11 Financial liabilities
Financial liabilities are classified as either financial liabilities at fair value through the income statement or
other financial liabilities.
Financial liabilities are classified according to the substance of the contractual arrangements entered into.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the Company’s obligations are discharged,
cancelled, or they expire.
1.12 Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. An equity
instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its
liabilities.
37
1.13 Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as
reported in the income statement because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable or deductible. The company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the
reporting end date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts
of assets and liabilities in the financial statements and the corresponding tax bases used in the computation
of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises
from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects
neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the
asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period
when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income
statement, except when it relates to items charged or credited directly to equity, in which case the deferred
tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally
enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate
to taxes levied by the same tax authority.
1.14 Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services
are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably
committed to terminate the employment of an employee or to provide termination benefits.
1.15 Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16 Share-based payments
The Company issues equity settled share based payments to certain employees. Equity settled share based
payments are measured at fair value at the date of grant. The fair value determined at the grant date is
expensed on a straight-line basis over the vesting period. Fair value is measured by use of a Black-Scholes
model.
38
1.17 Leases
At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16.
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset
for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the
company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-
use assets are included within tangible fixed assets, apart from those that meet the definition of investment
property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the commencement date plus any initial direct costs
and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset
and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement
date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The
estimated useful lives of right-of-use assets are determined on the same basis as those of other tangible
fixed assets. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for
certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the company's incremental borrowing rate. Lease payments included in the
measurement of the lease liability comprise fixed payments, variable lease payments that depend on an
index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any
options that the company is reasonably certain to exercise, such as the exercise price under a purchase
option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of
machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT
equipment. The payments associated with these leases are recognised in profit or loss on a straight-line
basis over the lease term.
1.18 Government grants
Government grants are recognised when there is reasonable assurance that the grant conditions will be
met and the grants will be received.
Government grants of a revenue nature are credited to the profit and loss account in the same period as
the related expenditure.
1.19 Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at
the dates of the transactions. At each reporting end date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains
and losses arising on translation are included in the income statement for the period.
39
1.20 Segment reporting
A business segment is a group of assets and operations engaged in providing products or services that are
subject to risks and returns that are different from those of other business segments. A geographical
segment is engaged in providing products or services within a particular economic environment that are
subject to risks and return that are different from those of segments operating in other economic
environments.
2
Critical accounting estimates and judgements
Revenue for projects started and completed during the financial year is recognised in full during the year.
Revenue from a project which commences in one financial year and is completed in a subsequent financial
year is recognised over the life of the project based on the expected period to completion as anticipated
at each balance sheet date less what has already been recognised during a previous financial period or
periods.
There were no other material accounting estimates or areas of judgements required.
3
Revenue & segmental reporting
An analysis of the Company's revenue is as follows:
Revenue
Other operating income
Grant income
2023
£
2022
£
597,354
830,266
8,380
70,441
The principal activities are the provision of outsourced systems and computational biology services to
pharmaceutical companies.
This activity comprises a single segment of operation of a sole UK base and entirely UK based assets.
Revenue was derived in the UK, European Union Switzerland and USA (2022: UK, European Union
Switzerland and USA) from its principal activity.
4
Operating loss
Operating loss for the period is stated after charging/(crediting):
Net foreign exchange losses/(gains)
Government grants
Fees paid to the Company's auditor, refer to below
Depreciation of property, plant and equipment
Profit on disposal of property, plant and equipment
Amortisation of intangible assets
Share-based payments
40
2023
£
491
(8,380)
11,025
9,563
(85)
876
34,170
2022
£
548
(70,441)
10,500
10,705
-
-
430
59,386
5
Auditors remuneration
Fees payable to the Company's auditor and associates:
For audit services
Audit of the Company's financial statements
2023
£
2022
£
11,025
10,500
6
Employees
The average monthly number of persons (including directors) employed by the Company during the year
was:
Their aggregate remuneration comprised:
Wages and salaries
Social security costs
Other pension and insurance benefit costs
Details of the remuneration of Directors are included in the Directors Report on page 17.
7
Finance income
Interest income
Bank deposits
8
Finance costs
2023
Number
2022
Number
10
8
2023
2022
£
£
514,836
55,419
47,312
484,570
52,026
44,528
617,567
581,124
2023
2022
£
£
1,724
142
Interest rate risk
The Company finances its operations by cash and short-term deposits. The Company’s policy on interest rate
management is agreed at board level and is reviewed on an ongoing basis. Other creditors, accruals and
deferred revenue values do not bear interest.
41
Interest rate profile
The Company had no bank borrowings at the 30 June 2023 and 30 June 2022.
9
Income tax expense
Current tax
Research and development tax credit: current year
Continuing operations
2022
£
2023
£
(94,752)
(105,834)
(94,752)
(105,834)
From 1st April 2023 the main rate in corporation tax increased from 19% to 25%. The expected effective rate of tax
applicable to the company for the year is a hybrid rate of 20.5%.
The charge for the year can be reconciled to the loss per the income statement as follows:
Loss before taxation
2023
£
2022
£
(572,009)
(358,972)
Expected tax charge based on a corporation tax rate of 20.5% (2022: 19.00%)
(117,262)
(68,205)
Expenses not deductible in determining taxable profit
Unutilised tax losses carried forward
Research and development expenditure tax credit
Deferred / (accelerated) capital allowances
Research and development enhancement
Loss surrendered for tax credits
Tax charge for the year
9,645
45,198
(94,752)
(667)
(72,462)
135,548
10,964
786
(105,834)
(315)
(68,125)
124,895
(94,752)
(105,834)
At 30 June 2023 tax losses of £4,112,999, (2022: £3,892,521) remained available to carry forward against
future taxable trading profits. These amounts are in addition to any amounts surrendered for Research and
Developments tax credits. There is an unrecognised deferred tax asset of £1,028,250, (2022: £737,640).
Deferred tax is calculated at 25%, the rate enacted at the balance sheet date (2022: 19%. Which was the
rate expected to apply when the asset became realised).
42
10 Earnings per share
Number of shares
Weighted average number of ordinary shares for basic earnings per share
Earnings - Continuing operations
2023
£
2022
£
97,424,778
97,372,997
Loss for the period from continued operations
(477,257)
(253,138)
Earnings for basic and diluted earnings per share being net profit attributable to equity
shareholders of the Company for continued operations
(477,257)
(253,138)
Earnings per share for continuing operations
Basic and diluted earnings per share (shown in pence)
Basic and diluted earnings per share
Loss from continuing operations (shown in pence)
(0.49)
(0.26)
(0.49)
(0.26)
The loss attributable to equity holders (holders of ordinary shares) of the Company for the purpose of
calculating the fully diluted loss per share is identical to that used for calculating the loss per share. The
exercise of share options would have the effect of reducing the loss per share and is therefore anti- dilutive
under the terms of IAS 33 ‘Earnings per Share’.
11
Financial instruments recognised in the statement of financial position
Held for trading:
Current financial assets
Trade and other receivables
Cash and cash equivalents
Current financial
Trade and other payables
liabilities
Deferred revenue
2023
£
2022
£
48,328
83,903
416,592
687,674
464,920
771,577
91,986
108,014
20,017
14,262
112,003
122,276
The Company’s financial instruments comprise cash and short-term deposits. The Company has various
other financial instruments, such as trade debtors and creditors that arise directly from its operations.
The main risks arising from the Company’s financial instruments are interest rate risk, liquidity risk and
foreign currency risk. The policies for managing these are regularly reviewed and agreed by the board.
It is and has been throughout the year under review, the Company’s policy that no trading in financial
instruments shall be undertaken.
43
Licenses
£
Trademarks
£
-
-
3,350
3,350
-
-
-
447
447
2,903
-
4,298
4,298
4,298
4,298
863
430
1,293
429
1,722
2,576
3,005
Total
£
4,298
4,298
4,298
7,648
863
430
1,293
876
2,169
5,479
3,005
12
Intangible assets
Cost
At 1 July 2021
At 30 June 2022
Additions- purchased
At 30 June 2023
Amortisation and impairment
At 1 July 2021
Charge for the year
At 30 June 2022
Charge for the year
At 30 June 2023
Carrying amount
At 30 June 2023
At 30 June 2022
44
13 Tangible fixed assets
Cost
At 1 July 2021
Additions
Disposals
At 30 June 2022
Additions
Disposals
At 30 June 2023
Accumulated depreciation and impairment
At 1 July 2021
Charge for the year
Eliminated on disposal
At 30 June 2022
Charge for the year
Eliminated on disposal
At 30 June 2023
Carrying amount
At 30 June 2023
At 30 June 2022
At 30 June 2021
14 Trade and other receivables
Trade debtors
Other receivables
Corporation tax recoverable
VAT recoverable
Prepayments and accrued income
Fixtures and
fittings
£
3,028
-
(179)
2,849
-
-
2,849
2,711
316
(179)
2,848
1
-
2,849
-
1
317
IT equipment
£
74,793
9,370
(3,182)
80,981
3,286
(2,539)
81,728
59,410
10,389
(3,182)
66,617
9,5619
(2,207)
73,971
7,757
14,364
15,383
Total
£
77,822
9,370
(3,362)
83,830
3,286
(2,539)
84,577
62,121
10,705
(3,361)
69,465
9,562
(2,207)
76,280
7,757
14,365
15,700
Due within one year
2023
£
32,320
16,008
94,751
1,853
99,453
2022
£
80,125
3,778
105,834
32,988
187,252
244,385
409,977
45
Prepayments and accrued income
15
Fair value of trade receivables
Due after one year
2023
£
180
2022
£
395
180
395
There are no material differences between the fair value of financial assets and the amount at which they are stated in the financial
statements.
16
Fair value of financial liabilities
There are no material differences between the fair value of financial liabilities and the amount at which they are stated in the
financial statements.
17
Liquidity risk
The Company seeks to manage financial risk by ensuring that sufficient liquidity is available to meet foreseeable needs and to
invest cash assets safely and profitably.
18
Trade and other payables
Trade creditors
Accruals
Social security and other taxation
Other creditors
19 Deferred revenue
Arising from invoices in advance
46
Due within one year
2023
£
18,130
57,793
30,670
16,063
2022
£
26,847
78,197
18,333
2,970
122,656
126,347
2023
£
2022
£
20,017
14,262
Analysis of deferred revenue
Deferred revenues are classified based on the amounts that are expected to be settled within the next 12 months and
after more than 12 months from the reporting date, as follows:
Current liabilities
20 Retirement benefit schemes
Defined contribution schemes
2023
£
2022
£
20,017
14,262
The Company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held
separately from those of the Company in an independently administered fund.
The total costs charged to income in respect of defined contribution plans is £38,421 (2022: £36,012).
As at the statement of financial position date the Company had unpaid pension contributions totalling £6,063 (2022: £2,970.
47
21
Share-based payment transactions
The Company operates two share option schemes: (1) under the Enterprise Management Initiative Scheme (“EMI”) and (2) an
unapproved share option scheme. Both are equity settled. Options are granted with a fixed exercise price equal to the market
price of the shares under option at the date of grant. Some options are subject to performance criteria relating to either share
price performance or the achievement of certain corporate milestones. The contractual life of the options is 10 years from the
date of issue.
A summary of the options at the start and end of period for directors and all other employees is presented in the following table:
Holder
Dr. C. Chassagnole
Dr. C. Chassagnole
Dr. C. Chassagnole
Dr. C. Chassagnole
Dr. C. Chassagnole
Dr. C. Chassagnole
Dr. J. Millen
Dr. J. Millen
Dr. J. Millen
Dr. P. Harper, former
director
Dr. P. Harper, former
director
Dr. P. Harper, former
director
Dr. P. Harper, former
director
Dr. P. Harper, former
director
Other staff
Other staff
Other staff
Other staff
Other staff
Other staff
Other staff
Other staff
Total
Outstanding
at start of
period
129,381
322,615
659,641
350,000
267,000
694,287
520,000
400,000
985,454
51,752
129,046
258,092
140,000
448,760
77,628
188,605
54,596
201,891
490,000
353,000
1,371,499
850,000
8,943,247
Granted during
period
Forfeited
during period
Exercised during
period
Outstanding at
end of period
Exercisable at
end of period
Exercise
price (p)
Date of
grant
Date of expiry
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
129,381
-
-
-
-
-
-
-
-
51,572
-
-
-
-
77,628
-
-
-
250,000
160,000
789,166
214,812
1,672,739
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13.20
11-Feb-13
11-Feb-23
322,615
659,641
350,000
322,615
6.17
24-Mar-15
24-Mar-25
659,641
2.50
28-Feb-17
28-Feb-27
350,000
5.35
26-Mar-18
26-Mar-28
267,000
267,000
3.16
26-Mar-19
26-Mar-29
694,287
520,000
400,000
985,454
694,287
520,000
7.55
02-Mar-21
01-Mar-31
5.35
26-Mar-18
26-Mar-28
400,000
3.16
26-Mar-19
26-Mar-29
985,454
7.55
02-Mar-21
01-Mar-31
-
-
13.20
11-Feb-13
11-Feb-23
129,046
258,092
140,000
448,760
129,046
6.17
24-Mar-15
24-Mar-25
258,092
3.50
21-Dec-15
21-Dec-25
140,000
5.35
26-Mar-18
27-Mar-28
448,760
7.55
02-Mar-21
01-Mar-31
-
-
13.20
11-Feb-13
11-Feb-23
188,605
188,605
6.17
24-Mar-15
24-Mar-25
54,596
54,596
3.50
21-Dec-15
21-Dec-25
201,891
240,000
193,000
582,333
635,188
201,891
2.50
28-Feb-17
28-Feb-27
240,000
5.35
26-Mar-18
26-Mar-28
193,000
582,333
3.16
26-Mar-19
26-Mar-29
7.55
02-Mar-21
01-Mar-31
-
4.38
29-Apr-22
29-Apr-32
7,270,508
6,635,320
There were no share options granted in the year. The weighted average share price at the date of the grant in the prior year was
£0.0438.
The options outstanding at 30 June 2023 had an exercise price ranging from £0.025 to £0.0755, and a remaining contractual life
ranging between 9 months and 9 years.
During the prior year, 850,000 options were granted on 29 April 2022. The weighted average fair value of the options on the
measurement date was £0.0438. Options vest according to time and performance based criteria.
Fair value was measured using Black-Scholes share option pricing model.
48
Inputs were as follows:
Expected volatility
Expected life
Risk free rate
2023
2022
-
-
-
56.70%
2.47 years
1.614%
The expected volatility is based on the sixty day average historical volatility of the Company over 3 years.
The expected life of options is now based on the share option exercise history with the Company. The risk free rate of return is
derived from UK treasury yields at 2 and 3 years.
Total expenses of £34,170 related to equity settled share based payment transactions were recognised in the year. (2022:
£59,386).
22
Share capital
Ordinary share capital, issued and fully paid
97,424,778 Ordinary of 0.4p each
2,481,657,918 Deferred of 0.036p each
2023
£
2022
£
389,699
389,699
893,397
893,397
1,283,096
1,283,096
The ordinary shares carry no rights to fixed income. The deferred shares have no voting rights and have no rights to receive
dividends or other income.
23
Share premium account
At 30 June 2022 & at 30 June 2023
£
5,936,478
The share premium account consists of proceeds from the issue of shares in excess of their par value (which is included in the
share capital account).
24 Other reserves: share-based compensation reserve
At 30 June 2021
Additions
At 30 June 2022
Additions
Other movements
At 30 June 2023
£
222,274
59,386
281,660
34,170
(168,179)
147,651
49
The share-based compensation reserve represents the credit arising on the charge for share options calculated in accordance with
IFRS 2.
In respect of cancelled and exercised options that had vested, £168,179 (2022: £Nil) was transferred from the share-based
payment reserve to retained earnings.
25 Retained earnings
At 1 July 2021
Loss for the period
At 30 June 2022
Loss for the period
Other movements
At 30 June 2023
£
(6,273,289)
(253,138)
(6,526,427)
(477,257)
(168,179
(6,835,505)
Retained earnings includes an amount of £237,889 (2022: £237,889) in relation to the Equity Swap Agreement in 2014 which
under the Companies Act is not distributable.
In respect of cancelled and exercised options that had vested, £168,179 (2022: £Nil) was transferred from the share-based
payment reserve to retained losses reserve.
26 Operating lease commitments
Lessee
Amounts recognised in the income statement as an expense during the period in respect of operating lease arrangements are as
follows:
Minimum lease payments under operating leases
2023
£
70,248
2022
£
64,012
At the reporting end date, the Company had outstanding commitments for future minimum lease payments under non-
cancellable operating leases, which fall due as follows:
Within one year
50
2023
£
7,354
2022
£
6,588
7,354
6,588
27 Capital commitments
At 30 June 2023 and 30 June 2022 the Company had no capital commitments.
28 Capital risk management
The capital structure of the Company consists of cash and cash equivalents and equity attributable to equity holders of the
Company, comprising issued capital, reserves and retained earnings as disclosed in notes 22 to 25.
The board’s policy is to maintain an appropriate capital base so as to maintain investor and creditor confidence and to sustain
future development of the business. The Company’s objectives when managing capital are to safeguard the Company’s ability to
continue as a going concern in order to provide returns for shareholders and benefits for stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. The Company has a record of managing the timing and extent of discretionary
expenditure in the business.
In order to maintain or adjust the capital structure the Company may issue new shares.
29 Events after the reporting date
On 3 July 2023, a date which is after the reporting date but prior to the signing of these financial statements, the Board allotted
38,047,700 ordinary shares.
34,500,000 of these shares were placed through the Company's broker Hybridan LLC at £0.01 per share. 1,000,000 shares were
issued via a direct subscription to the Directors of the Company and 2,547,700 shares were placed via a retail subscription offer.
All shares were placed at £0.01 per share.
There were no additional post reporting events to note.
30 Related party transactions
Remuneration of key management personnel
The remuneration of the Directors, who are the key management personnel of the Company, is set out on page 17.
Included in other debtors is £10,000 received from Directors which was received in advance for an equity issue in July 2023.
31 Controlling party
The Company does not currently have an ultimate controlling party and did not have one in this reporting year or the preceding
reporting year.
51
32 Cash absorbed by operations
Loss for the year after tax
Adjustments for:
Taxation credited
Investment income
Gain on disposal of tangible fixed assets
Amortisation and impairment of intangible assets
Depreciation and impairment of tangible fixed assets
Equity settled share-based payment expense
Movements in working capital:
(Increase)/decrease in debtors
Increase/(decrease) in creditors
(Decrease)/increase in deferred revenue outstanding
Cash absorbed by operations
2023
£
2022
£
(477,257)
(253,138)
(94,752)
(1,724)
(85
876
9,563
34,170
(105,834)
(142)
-
430
10,705
59,386
154,724)
(3,692)
5,755
(163,213)
12,305
(29,266)
(372,422)
(468,767)
52