Physiomics Plc
Annual Report and Financial Statements
For the Year Ended
30 June 2024
Company Registration No. 04225086
2
This page is intentionally blank
3
Contents
OFFICERS AND PROFESSIONAL ADVISORS
4
HIGHLIGHTS
5
CHAIRMAN AND CHIEF EXECUTIVE OFFICER’S STATEMENT
7
STRATEGIC REPORT
9
DIRECTORS’ REPORT
18
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF PHYSIOMICS PLC
26
INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2024
32
STATEMENT OF COMPREHENSIVE INCOME
33
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2024
34
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2024
35
CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2024
36
NOTES TO THE FINANCIAL STATEMENTS
37
4
Officers and Professional Advisors
DIRECTORS
Dr J S Millen
Non-Executive Chairman
Dr T H Corn
Non-Executive Director
Mr S Kumar
Non-Executive Director
Dr P J Sargent (Appointed 22 January 2024)
Chief Executive Officer
SECRETARY
Strategic Finance Director Limited
REGISTERED OFFICE
AUDITOR
Bee House
Shipleys LLP
140 Eastern Avenue
10 Orange Street
Milton Park
Haymarket
Abingdon
London
OX14 4SB
WC2H 7DQ
REGISTRAR
BANKER
Link Group
Barclays Bank UK Plc
Central Square
Leicester
29 Wellington Street
LE87 2BB
Leeds
LS1 4DL
BANKER
NOMINATED ADVISER
National Westminster Bank Plc
Strand Hanson Limited
Norwich Gentleman’s Walk
26 Mount Row
Norwich
Mayfair
Norfolk
London
NR2 1NA
W1K 3SQ
SOLICITOR
BROKER
Mishcon de Reya LLP
Hybridan LLP
Africa House
Birchin Court
70 Kingsway
20 Birchin Lane
London
London
WC2B 6AH
EC3V 9DU
Physiomics Plc is a limited liability company incorporated in England & Wales and domiciled in the United
Kingdom.
5
Highlights
Financial Highlights
•
The financial year ending 30 June 2024 resulted in a record year for the total value of new contracts
won (more than £1.1m) during the period and ended with a record level (based on last six years of
data) of contracted revenue to be taken forward into the following year (more than £500k)
•
Total income (revenue and grant income) decreased 6% to £570,561 (2023: £605,734)
•
The operating loss increased 17% to £670,816 (2023: £573,733)
•
The loss after taxation increased 28% to £609,352 (2023: £477,257)
•
At 30 June 2024, the surplus of shareholders’ funds was £282,527 (30 June 2023: £531,720)
•
Cash and cash equivalents at 30 June 2024, and before the post year end funding of £191,072 (30
June 2023: £416,592)
Operational highlights
•
Appointment of Chief Operating Officer, Dr Peter Sargent in September 2023, with his transition to
Chief Executive Officer and Director in January 2024; coinciding with Dr Jim Millen’s appointment
as Non-Executive Chairman
•
Awarded a grant by Innovate UK and the Office for Life Sciences to advance the development of the
Company’s G-CSF dosing tool. The Company will receive £137,376 out of the total £570,651 grant
award
•
Implementation of the Company’s Personalised Dosing Software onto DoseMe’s newly launched
platform, allowing access to the software for research purposes initially, with the aim to add paid
for functionality later
•
Awarded two large contracts exceeding £286k, in aggregate, with two new clients, one of whom is
at the forefront of AI driven drug discovery
•
Follow-on contracts with Bicycle Therapeutics, Numab Therapeutics, Merck KGaA and Sheffield
University exceeding, in aggregate, £822k
•
Continued operational build of a Biostatistics service line, with the initial appointment of a Head of
Biostatistics and then the onboarding of a Principal Biostatistics consultant
Post period end
•
Successful completion of a fundraise, with gross proceeds raised of £406,417. Funds were raised to
continue driving growth in the business, including the following key activities:
•
Recruitment of a Head of Modelling & Simulation: currently in final stages of candidate
recruitment
6
•
Continued investment into business development and marketing across Modelling and
Biostatistics service lines
•
Exploration of strategic opportunities in Biostatistics
•
Development of personalised dosing tool
7
Chairman and Chief Executive Officer’s Statement
Overview
Following a strategic review at the start of the year, the Company has begun implementing the operating model
changes necessary to position the business for growth. Even though these changes are yet to effect total
income, which was down approx. 6% on the previous year, significant increases in other performance metrics
were seen. The Company achieved record levels of contract awards, with more than £1.1m of new contracts
signed during the financial year and a record level of contracted revenue (more than £500k) to be taken forward
into the next financial year ending 30 June 2025. Additional revenue has also been contracted for the two years
ended 2026 and 2027.
The Company’s primary focus remains its core Modelling and Simulation service-line. For this, the business
continues to broaden its offering into new therapeutic areas and drug development phases, as well as
diversifying its client base. Driven by an increase in presence at both physical key global conferences and
virtually through various online channels, the Company has achieved a 5-fold increase in the total value of new
client contract wins compared with the previous year, whilst still nurturing and delivering on work for
established clients (i.e. Numab, Merck KGaA, CRUK, Bicycle Therapeutics). The financial year ended 30 June
2024 has seen the Company win contracts outside oncology, in areas such as dermatology, as well as in areas
outside its typical translational modelling focus, such as data science and target identification (discovery
phase).
Progress has also been made with the Company’s Personalised Dosing Software initiative. In November 2023,
the Company was awarded a grant from Innovate UK and the Office for Life Sciences to fund a project in
collaboration with Beyond Blood Diagnostics and Blackpool Teaching Hospital NHS Foundation Trust to further
develop its personalised dosing tool. Physiomics will receive £137,376 of the £570,651 total award over the
course of the project, which is due to complete in October 2025. In June 2024, the Company also announced
the re-engagement of its US partner, DoseMe, resulting in an agreement to implement its Personalised Dosing
Software on the partner's newly updated platform. Through the platform, the Company’s dosing software will
be made available to selected DoseMe clients on a research basis with an objective of adding paid for
functionality later.
Finally, the Company continues to build out its second consultancy service-line providing biostatistics solutions.
During the year, both organic and in-organic options to build this capability have been progressed in parallel.
Shortly following recruitment of a Head of Biostatistics in October 2023, the Company decided that alternative
expertise was required and that until a suitable replacement Head of Biostatistics can be identified,
experienced biostatistician contractors will be utilised. The Company now has two senior biostatistics
contractors and with their support, it has started early engagement with prospective clients. In addition to
organic development of this service-line, a European-wide search for Biostatistics service companies was
conducted and the Company continues partnership and acquisition discussions with a number of targets.
8
Financial Review
The Company’s total income for the year ended 30 June 2024 of £570,561, which represents a 6% decrease
from the financial year ended 30 June 2023, despite the Company having signed a record £1.1m of new
contracts during the period. The relatively long sale cycle of 6-18 months associated with modelling and
simulation services means that only approximately 44% of this total contract value has been recognised as
revenue in the financial year ended 30 June 2024, however, as noted above, over £500k of carried forward
contracts are expected to be completed in the current financial year ending 30 June 2025.
The disappointing lack of revenue growth, combined with necessary investment in operating model changes led
to an increase in loss after taxation of 28% to £609,352 (2023: £477,257).
At 30 June 2024, the surplus of shareholders’ funds was £282,527 (30 June 2023: £531,720) of which cash and
cash equivalents were £191,072 (30 June 2023: £416,592). However, this was just prior to the receipt of funds
from a fundraise completed on 4 July 2024 the gross proceeds of which were £406,417.
Staff
As a result of a strategic review of its operating model, the Company has completed a restructuring at both
Board and operating level staff to better position the business for growth. This includes the recruitment of Dr
Peter Sargent as Chief Executive Officer and Director, the decision to recruit service-line leads and the
redundancy of the Chief Scientific Officer role.
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 strategic review of its operating model earlier in the year and its increased
investment in business development and marketing activities has already resulted in key performance metrics
hitting record levels. As a result, the Company started the financial year ending 30 June 2025 with more than
£500k of contracted revenue and momentum across its key initiatives, such as its personalised dosing software
and biostatistics service line. The Company is actively seeking to build upon this solid base and the Board looks
forward to a successful financial year 2025.
Dr James Millen, Non-Executive Chairman
Dr Peter Sargent, Chief Executive Officer
9
Strategic Report
Principal activities
Physiomics is engaged in providing consulting services to pharmaceutical companies and research institutes in
the areas of outsourced quantitative pharmacology, computational biology and biostatistics, using a
combination of industry standard technologies and its own proprietary technology platform, Virtual Tumour™.
In simple terms, this means helping drug developers accelerate the development of their therapies towards
market by supporting them gain insights from their data that will better inform their research decisions and
support regulatory review.
Modelling and simulation using Virtual Tumour™ and other tools
The Company’s focus is almost exclusively on the provision of modelling, simulation and data science services,
to support discovery, preclinical and clinical drug development activities. 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 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, as well as in other therapeutic areas, is attractive to new and existing clients.
The Company’s expertise in 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 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
Biostatistics
In addition to its core modelling and simulation business, the Company has started building capabilities in
biostatistics, expanding its offering to clients as part of a second service line. Biostatistics is an essential
component of clinical research, playing a pivotal role in the setup, conduct and reporting of trials. It ensures
studies are well designed, data are accurately collected and analysed, and results are interpreted correctly.
10
The strategic rationale for developing Biostatistics service capabilities is three-fold; firstly, the application of
Modelling & Simulation and Biostatistics in drug development overlaps, with often the output of the former
being a key input to the latter, allowing for natural follow-on work to be offered to clients. Secondly,
biostatistics is a necessary component to the setup, conduct and reporting of any interventional clinical trial,
from Phase 1 through to Phase 4, regardless of the therapeutic area. This opens up a significant market for the
Company, giving greater opportunity to scale. Finally, with both service lines utilising the same business model
and similar expertise across mathematics and data science, this allows the Company to operate flexible staffing
across service lines to meet demand and maximise utilisation.
Personalised Medicine
In addition to its consultancy service business, the Company has continued to develop its technology for use in the
field of personalised medicine. Physiomics’ approach is to apply its technology and expertise in interpreting pre-
clinical and clinical cancer data to help predict when to 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 three 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 software to predict levels of neutropenia. Although this was felt to be
of interest by clinicians, it was determined that the software’s use to guide the use of the expensive biological drug
GCSF (used to counteract neutropenia) might have a higher commercial value. Funded through the latest Innovate
UK grant award announced in November 2023, the Company has kicked off project (PREDICT-ONC) in partnership
with UK based start-up Beyond Blood Diagnostics and Blackpool Teaching Hospital NHS Foundation Trust to generate
data that will help further validate the software’s use to guide dosing of GCSF. The project, which is due to run until
October 2025, will leverage Beyond Blood Diagnostics’ miniature device that allows blood count measurement in
community and primary care settings.
During the year, the Company re-engaged with its US partner DoseMe and entered an agreement to implement its
personalised medicine software onto their newly updated platform. Once implemented, the software will be initially
made available to a selection of DoseMe’s clients for research purposes only, with an objective of adding paid for
functionality later.
Business Model
The Company’s main commercial business is the provision of consulting services which rely substantially on its
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.
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.
11
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:
•
Our expertise and tools can be applied across multiple therapeutic areas. Our team has accumulated
over 140 years of combined experience in the development of new 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 120 projects
covering hundreds of targets, cell lines and drugs. A large percentage of these projects have focussed
on oncology therapies; however, the Company is increasingly working in other therapeutic areas;
•
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
•
We provide a flexible and bespoke service. We differentiate ourselves in the market by offering
flexible, bespoke services that best answers our client’s questions and fits in with their timelines. Some
competitor companies often try and answer their clients’ questions with off the shelf models and offer
less flexibility in their service.
Our strategy
Physiomics’ strategy is to grow its consulting business across modelling & simulation and biostatistics while
actively applying this expertise in the development of personalised medicine assets. Our main strategic aims
are as follows:
•
Continue to expand and diversify our core consulting business (Modelling & Simulation) both through
repeat business and through the acquisition of new clients;
•
Expand our services into related fields, starting with biostatistics. This will be the subject of further
announcements later this calendar year;
•
Supplement our core consulting revenues through grant funded projects, especially in the field of
personalised medicine (CRUK, Innovate UK, NIHR etc);
•
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:
12
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 Company values its employees and implements
training, offers development opportunities and has in
place appropriate incentive programs to support
their retention.
The need to foster the Company’s business
relationships with suppliers, customers and others.
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
Company.
The Company treats all members equitably and
attempts to ensure a timely and accurate flow of
information to all members.
Review of Business
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 6% to £570,561 (2023: £605,734)
•
The operating loss increased 17% to £670,816 (2023: £573,733)
•
The loss after taxation increased 28% to £609,352 (2023: £477,257)
•
At 30 June 2024, the surplus of shareholders’ funds was £282,527 (30 June 2023: £531,720)
•
Cash and cash equivalents at 30 June 2024 of £191,072 (30 June 2023: £416,592)
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.
13
We have continued to develop our brand through a variety of marketing and business development activities
including:
•
Engagement of external social media and marketing expertise to advise and support our Head of
Business Development in the execution of key marketing initiatives.
•
Continued use of social media to engage with current and potential new clients;
•
Increased attendance at key conferences such as this year at AACR-EORTC where we presented a poster
in collaboration with Ankyra, sponsoring the World ADC event, BIOEurope, Bio International and
Immuno-oncology UK; and
•
Further development of our website to refine our messaging and include case studies based on actual
client projects.
The Company continues to be successful in attracting repeat business this year from clients such as Merck KGaA,
Numab Therapeutics and Bicycle Therapeutics, whilst also driving business with new clients.
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. Even
though our primary focus is still on translational projects involving assets entering clinical development for the
first time, we are also delivering on projects supporting R&D activities as far upstream as discovery in areas
such as target identification, as well as projects outside of oncology, such as dermatology and immunology. We
are also supporting clients across a wide array of disease modalities, including but not limited to antibody drug
conjugates, radiopharmaceuticals, DNA damage repair agents and combination therapies.
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 three 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 indicators of future performance, being value of new contracts won, contracted future revenue
and pipeline value.
Total revenues during the last five financial years (year ended June 2020 to year ended June 2024) exceed the
total revenues of the first seventeen accounting periods (from incorporation to June 2019).
Considering performance trends across periods, total income for the past 3 financial years (year ended June
2022 to year ended June 2024) has averaged £692k annually, compared with £785k for the 3 years before that
(year ended June 2019 to year ended June 2021) and £360k for the 3 years before that (year ended June 2016
to year ended June 2018). The recent performances of FY23 and FY24 with delayed client projects in both
periods have caused the 3-year average trend to pause its upward growth.
14
Similarly, loss after tax for the past 3 financial years (year ended June 2022 to year ended June 2024) has
averaged £447k, compared with an average of £128k for the 3 years before that (year ended June 2019 to year
ended June 2021). 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.
Year-end net assets at 30 June 2024 of £282k have fallen from their year-end peak at June 2020 of £1,315k,
primarily due to contracting delays affecting income, along with increased investment in people and technology
needed to drive future growth.
The financial year ending 30 June 2024 resulted in a record year for the total value of new contracts won (more
than £1.1m), a peak unweighted pipeline value of more than £1.7m and a record level (based on last six years
of data) of contracted revenue to be taken forward into the following year (more than £500k).
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.
Risk
Description
Mitigation
Loss of major
customer
The business has a high dependence on
repeat business. This leads to the risk that
these existing customers could significantly
reduce or cancel its contracts with the
Company.
For the year ending 30 June 2024, new contracts from
repeat clients contributed to 74% of the value of all
contracts won in that period, with 26% of the value
coming from contracts signed with new clients. The
contracts resulting from repeat business however
came from four different clients. The total value of
new client contracts has increased 5-fold from the
previous year, financial year ending 30 June 2023.
15
Risk
Description
Mitigation
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.
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 four 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,
including the expansion of its consulting business into
the field of biostatistics. It is our intention in the
future to develop further service-lines beyond
Biostatistics.
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.
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
for
personal
and
professional
development also help to maintain staff satisfaction.
Over the course of this financial year, the Company
restructured its management team, taking on a new
CEO and terminating the CSO position in order to focus
resource on revenue generating activities.
16
Risk
Description
Mitigation
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 Board addresses financial uncertainties by
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 2024 the Company completed a fundraise of
£406k gross to support expansion of the core modelling
and simulation service-line, continued development of
biostatistics capability and continued development of
its personalised medicine software.
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.
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.
17
Risk
Description
Mitigation
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.
Due to the drop in revenues in the financial year 2023,
the Company is still to recover back to revenue levels
seen previously. This primarily is down to the long sale
cycles (12+ months) typical of such service business.
Therefore, efforts made during the year ending June
2022 and start of the following year are only just
converting into contracts. This is evidenced by this
year being a record year for total value of contracts
won, whilst only approx. 44% of this total contract
value materialising into recognised revenue for the
year.
By order of the Board
Dr Peter Sargent
Chief Executive Officer
18
Directors’ Report
The Directors submit their report and the audited financial statements of Physiomics Plc for the year ended 30
June 2024.
Results
There was a loss for the year after taxation amounting to £609,352 (2023 loss after tax: £477,257). 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 J S Millen
Dr C D Chassagnole
(Resigned 31 May 2024)
Dr T H Corn
Mr S Kumar
Dr P J Sargent
(Appointed 22 January 2024)
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 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.
19
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, as at 16
August 2024, there are no individual shareholders who hold an interest of more than 3% in the issued ordinary
shares of the Company.
On 16 August 2024, Dr Jim Millen held 1,884,393 ordinary shares a holding percentage of 0.93%.
Directors’ remuneration
Details of Directors’ remuneration in the year ended 30 June 2024 is set out below:
Emoluments
Bonus
Benefits
Pension
Contributions
Total
2024
Total
2023
£
£
£
£
£
£
Dr J S Millen
61,361
-
2,245
3,827
67,433
138,606
Dr C D Chassagnole
69,117
-
1,667
9,681
80,465
87,477
Mr S Kumar
20,000
-
-
-
20,000
23,667
Dr T H Corn
20,000
-
-
-
20,000
20,000
Dr P J Sargent
72,946
-
-
5,800
78,746
-
Total
243,424
-
3,913
19,308
266,644 269,750
Corporate governance
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,
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
20
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.
21
5.
Maintain the board as a well-functioning, balanced team led by the Chairman
The Board of Physiomics Plc currently comprises one Executive Director, two independent Non-Executive
Directors, one Non-Executive Chairman 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.
Following a period when Dr Jim Millen has fulfilled the roles of both Executive Chairman and CEO, there is now
a more balanced ratio of executive and non-executives on the Company's Board. This also addresses 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 Peter Sargent (Chief Executive Officer) joined Physiomics in September 2023, initially joining the
Board as Chief Operating Officer before transitioning to Chief Executive Officer in January 2024. He
brings over 20 years of experience in life sciences, leading R&D and commercial teams across drug and
diagnostic development businesses. Prior to joining Physiomics, Dr Sargent held a senior management
role at global consultancy business Syneos Health Inc (NASDAQ: SYNH), leading large teams of
professionals and servicing a variety of clients in the biopharmaceuticals space. Among his earlier
roles, Dr Sargent has also been Head of Business Development for the UK’s National Institute for Health
and Care Research (NIHR), leading a team supporting global life science businesses access to funding
and research infrastructure in the UK. He holds a PhD in Biochemistry from King’s College London.
•
Dr Jim Millen (Non-Executive Chairman) 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 Non-Executive Chairman.
•
Dr Tim Corn (Non-Executive Director) 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.
22
•
Mr Shalabh Kumar (Non-Executive Director) 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 (Company 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 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 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
23
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 Peter Sargent and Mr Shalabh Kumar, with Strategic Finance Director Ltd (Company
Secretary) attending as secretary.
•
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
Dr Tim Corn and Dr Jim Millen, with Strategic Finance Director Ltd (Company Secretary) attending as
secretary
24
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 seven employees, five are women and two are non-UK nationals.
Post balance sheet events
On 9 July 2024, a date which is after the reporting date but prior to the date of signing these financial
statements, the Board allotted 67,736,240 ordinary shares. All shares were placed at £0.006 per share, with
gross proceeds raised of £406,417.
There were no additional post reporting events to note.
Statement as to disclosure of information to auditors
The Directors in office on 26 September 2024 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.
25
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 Peter Sargent, Chief Executive Officer
26
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 2024 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
2024 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.
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.
27
Risk
How the Scope of our audit responded to the risk
Management override of controls
Journals can be posted that significantly alter
the Financial Statements and give rise to fraud
and/or material misstatement in the financial
statements
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.
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
Fraud in Revenue Recognition
There is a risk that revenue is materially
understated due to fraud.
Income was tested on a sample basis from contracts. No
evidence of fraud or other understatement was identified.
Accounting Estimates
Potential risk of inappropriate accounting
estimates giving rise to misstatement in the
accounts.
All areas were examined to identify any potential
accounting estimates. These estimates were then
reviewed and tested for adequacy.
Overstatement of Administrative Expenses
There
is
a
risk
that
the
Company’s
administrative expenses are overstated.
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.
Trade Debtors
There is a risk that the trade debtors are not
recoverable
The trade debtors were reviewed and all relevant amounts
were recovered after the year end and by time of this
audit report.
R&D Tax Credit
There is risk that the Research and
Development Tax Credit is overstated and not
recoverable from HMRC
The assumptions and calculations behind the R&D Tax
Credit were reviewed and tested and agree that they are
in line with current guidance.
Our audit procedures relating to these matters were designed in the context of our audit of the Financial
28
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 £17,117. Performance materiality was determined for the
company to be £11,982 and triviality was determined for the company to be £856 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:
29
•
the information given in the strategic report and the directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
•
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the 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 18, 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.
30
•
We understood how the Company is complying with those frameworks by making enquiries on the
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
31
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
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
32
Income Statement for the year ended 30 June 2024
Year
ended
Year
ended
30 June
30 June
2024
2023
Notes
£
£
Revenue
3
543,250
597,354
Other operating income
3
27,311
8,380
Total income
570,561
605,734
Net operating expenses
(1,241,377)
(1,179,467)
Operating loss
4
(670,816)
(573,733)
Finance income
7
2,095
1,724
Finance costs
8
(33)
-
Loss before taxation
(668,754)
(572,009)
Income tax income
9
59,402
94,752
Loss for the year attributable to equity
shareholders
25
(609,352)
(477,257)
Earnings per share (shown in pence)
10
Basic and diluted
(0.45)p
(0.49)p
33
Statement of Comprehensive Income
Year ended
30 June
2024
Year ended
30 June
2023
£
£
Loss for the year
(609,352)
(477,257)
Other comprehensive income
-
-
Total comprehensive income/ (expense) for the year
(609,352)
(477,257)
Attributable to:
Equity holders
(609,352)
(477,257)
34
Statement of Financial Position as at 30 June 2024
Non-current assets
2024
2023
Notes
£
£
Intangible assets
12
4,379
5,479
Property, plant and equipment
13
16,829
7,757
Other receivables
14
-
180
21,208
13,416
Current assets
Trade and other receivables
14
210,323
244,385
Cash and cash equivalents
191,072
416,592
401,395
660,977
Total assets
422,603
674,393
Current liabilities
Trade and other payables
18
106,002
122,656
Deferred revenue
19
34,074
20,017
Total liabilities
140,076
142,673
Net current assets
261,319
518,304
Net assets
282,527
531,720
Equity
Called up share capital
22
1,435,287
1,283,096
Share premium account
23
6,122,115
5,936,478
Other reserves
24
151,387
147,651
Retained earnings
25
(7,426,262)
(6,835,505)
Total equity
282,527
531,720
The financial statements were approved by the Board of Directors and authorised for issue 26 September 2024
Signed on its behalf by:
Dr Jim Millen – Non-Executive Chairman
Company Registration No. 04225086
35
Statement of Changes in Equity for the year ended 30 June 2024
Share
capital
Share
premium
account
Other
Reserves
Profit and loss
reserves
Total
Balance at 1 July 2022
Year ended 30 June 2023:
£
1,283,096
£
5,936,478
£
281,660
£
(6,526,427)
£
974,807
Loss and total comprehensive income for the year
-
-
-
(477,257)
(477,257)
Transfer to other reserves
-
-
34,170
-
34,170
Other movements
-
-
(168,179)
168,179
-
Balance at 30 June 2023
1,283,096
5,936,478
147,651
(6,835,505)
531,720
Year ended 30 June 2024:
Loss and total comprehensive income for the
year
-
-
-
(609,352)
(609,352)
Issue of share capital
152,191
185,637
-
-
337,828
Transfer to other reserves
-
-
22,331
-
22,331
Other movements
-
-
(18,595)
18,595
-
Balance at 30 June 2024
1,435,287
6,122,115
151,387
(7,426,262)
282,527
36
Cash Flow Statement for the year ended 30 June 2024
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
32
(642,852)
(372,422)
Interest paid
(33)
Tax refunded
94,752
105,835
Net cash outflow from operating
activities
(548,133)
(266,587)
Investing activities
Purchase of intangible assets
-
(3,350)
Purchase of tangible fixed assets
(17,310)
(3,286)
Proceeds on disposal of tangible fixed assets
-
416
Interest received
2,095
1,724
Net cash used in investing activities
(15,215)
(4,495)
Financing activities
Proceeds from issue of shares
380,477
-
Share issue costs
(42,649)
-
Net cash generated from financing
activities
337,828
-
Net decrease in cash and cash
equivalents
(225,520)
(271,082)
Cash and cash equivalents at beginning of
year
416,592
687,674
Cash and cash equivalents at end of year
191,072
416,592
37
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
and principal place of business is Bee House, 140 Easten Avenue, Milton Park, Abingdon, OX14 4SB. 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 Application of new and revised International Financial Reporting Standards (“IFRSs”)
The following new standards, and amendments to standards, have been adopted by the group for the first
time during the year commencing 1 July 2023
- Amendments to IAS 8 – Definition of Accounting Estimates.
Standards, amendments and interpretations to existing standards that are not yet effective and have not
been early adopted by the group and/or company
At the date of authorisation of these financial statements, the Directors have reviewed the standards in
issue by the International Accounting Standards Board (“IASB”) and IFRIC, which are effective for annual
accounting periods ending on or after the stated effective date. In their view, none of these standards
would have a material impact on the consolidated financial statements.
1.3 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 £191,072 of cash and cash equivalents as at 30 June 2024 (2023: £416,592).
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.
38
1.4 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.
1.5 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:
Useful life
Method
Trademarks
10 years
Straight line
Licenses
5 years
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.
1.6 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
3 years straight line
IT Equipment
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.
1.7 Research and development expenditure
Expenditure on research activity is recognised as an expense in the period in which it is incurred.
1.8 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
39
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.
1.9 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.
1.10 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.
1.11 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.
1.12 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.
40
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the Company’s obligations are discharged,
cancelled, or they expire.
1.13 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.
1.14 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.
1.15 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.
1.16 Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
41
1.17 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.
1.18 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.
1.19 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.
1.20 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.
42
1.21 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:
2024
2023
£
£
Revenue
543,250
597,354
Other operating income
Grant income
27,311
8,380
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 (2023: UK, European Union
Switzerland and USA) from its principal activity.
4
Operating loss
2024
2023
£
£
Operating loss for the period is stated after charging/(crediting):
Net foreign exchange losses/(gains)
109
491
Government grants
(27,311)
(8,380)
Fees paid to the Company's auditor, refer to below
11,250
11,025
Depreciation of property, plant and equipment
7,850
9,563
Profit on disposal of property, plant and equipment
388
(85)
Amortisation of intangible assets
1,100
(876)
Share-based payments
22,331
34,170
43
5
Auditors remuneration
2024
2023
Fees payable to the Company's auditor and associates:
£
£
For audit services
Audit of the Company's financial statements
11,250
11,025
6
Employees
The average monthly number of persons (including directors) employed by the Company during the year
was:
2024
Number
2023
Number
11
10
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
612,186
514,836
Social security costs
69,811
55,419
Other pension and insurance benefit costs
57,220
47,312
739,217
617,567
Details of the remuneration of Directors are included in the Directors Report on page 19.
7
Finance income
2024
2023
Interest income
Bank deposits
£
£
2,095
1,724
8
Finance costs
2023
2022
Interest income
Other interest payable
£
£
33
-
44
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.
Interest rate profile
The Company had no bank borrowings at the 30 June 2024 and 30 June 2023.
9
Income tax expense
Continuing operations
2024
£
2023
£
Current tax
Research and development tax credit: current year
(59,402)
(94,752)
(59,402)
(94,752)
The charge for the year can be reconciled to the loss per the income statement as follows:
2024
£
2023
£
Loss before taxation
(668,754)
(572,009)
Expected tax charge based on a corporation tax rate of 25% (2023: 20.5%)
(167,189)
(117,262)
Expenses not deductible in determining taxable profit
7,154
9,645
Unutilised tax losses carried forward
91,439
45,198
Research and development expenditure tax credit
(59,402)
(94,752)
Deferred / (accelerated) capital allowances
(4,357)
(667)
Research and development enhancement
(58,515)
(72,462)
Loss surrendered for tax credits
131,468
135,548
Tax charge for the year
(59,402)
(94,752)
At 30 June 2024 tax losses of £4,478,755, (2023: £4,112,999) 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 £1,122,797. (2023: £1,028,250).
Unrecognised deferred tax is calculated at 25%, the rate enacted at the balance sheet date. (2023: 25%)
45
10
Earnings per share
2024
£
2023
£
Number of shares
Weighted average number of ordinary shares for basic earnings per share
135,368,238
97,424,778
Earnings - Continuing operations
Loss for the period from continued operations
(609,352)
(477,257)
Earnings for basic and diluted earnings per share being net profit attributable to equity
shareholders of the Company for continued operations
(609,352)
(477,257)
Earnings per share for continuing operations
Basic and diluted earnings per share (shown in pence)
(0.45)
(0.49)
Basic and diluted earnings per share
Loss from continuing operations (shown in pence)
(0.45)
(0.49)
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 at amortised cost:
2024
£
2023
£
Current financial assets
Trade and other receivables
117,743
114,002
Cash and cash equivalents
191,072
416,592
308,815
530,594
Current financial liabilities
Trade and other payables
84,942
91,986
84,942
91,986
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.
46
It is and has been throughout the year under review, the Company’s policy that no trading in financial
instruments shall be undertaken.
12
Intangible assets
Licenses
Trademarks
Total
£
£
£
Cost
At 1 July 2022
-
4,298
4,298
Additions
3,350
-
3,350
At 30 June 2023
3,350
4,298
7,648
At 30 June 2024
3,350
4,298
7,648
Amortisation and impairment
At 1 July 2022
-
1,293
1,293
Charge for the year
447
429
876
At 30 June 2023
447
1,722
2,169
Charge for the year
670
430
1,100
At 30 June 2024
1,117
2,152
3,269
Carrying amount
At 30 June 2024
2,233
2,146
4,379
At 30 June 2023
2,903
2,576
5,479
47
13
Tangible fixed assets
Fixtures and
fittings
IT equipment
Total
Cost
£
£
£
At 1 July 2022
2,849
80,981
83,830
Additions
-
3,286
3,286
Disposals
-
(2,539)
(2,539)
At 30 June 2023
2,849
81,728
84,577
Additions
288
17,022
17,310
Disposals
(953)
(7,826)
(8,779)
At 30 June 2024
2,184
90,924
93,108
Accumulated depreciation and impairment
At 1 July 2022
2,848
66,617
69,465
Charge for the year
1
9,561
9,562
Eliminated on disposal
-
(2,207)
(2,207)
At 30 June 2023
2,849
73,971
76,820
Charge for the year
88
7,762
7,850
Eliminated on disposal
(951)
(7,440)
(8,391)
At 30 June 2024
1,986
74,293
76,279
Carrying amount
At 30 June 2024
198
16,631
16,829
At 30 June 2023
-
7,757
7,757
At 30 June 2022
1
14,364
14,365
14
Trade and other receivables
Due within one year
2024
£
2023
£
Trade debtors
102,510
32,320
Other receivables
6,705
16,008
Corporation tax recoverable
59,401
94,751
VAT recoverable
-
1,853
Prepayments and accrued income
41,707
99,453
210,323
244,385
48
Due after one year
2024
£
2023
£
Prepayments and accrued income
-
180
-
180
15
Fair value of trade receivables
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
Due within one year
2024
£
2023
£
Trade creditors
34,787
18,130
Accruals
46,155
57,793
Social security and other taxation
21,060
30,670
Other creditors
4,000
16,063
106,002
122,656
19
Deferred revenue
2024
£
2023
£
Arising from invoices in advance
34,074
20,017
49
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:
2024
£
2023
£
Current liabilities
34,074
20,017
20
Retirement benefit schemes
Defined contribution schemes
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 £49,459 (2023: £38,421).
As at the statement of financial position date the Company had unpaid pension contributions totalling £4,000 (2023: £6,063).
50
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
Outstanding
at start of
period
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
Dr. C. Chassagnole (FD)
322,615
-
-
-
322,615
322,615
6.17
24-Mar-15
24-Mar-25
Dr. C. Chassagnole (FD)
659,641
-
-
-
659,641
659,641
2.50
28-Feb-17
28-Feb-27
Dr. C. Chassagnole (FD)
350,000
-
-
-
350,000
350,000
5.35
26-Mar-18
26-Mar-28
Dr. C. Chassagnole (FD)
267,000
-
-
-
267,000
267,000
3.16
26-Mar-19
26-Mar-29
Dr. C. Chassagnole
694,287
-
-
-
694,287
694,287
7.55
02-Mar-21
01-Mar-31
Dr. J. Millen
520,000
-
-
-
520,000
520,000
5.35
26-Mar-18
26-Mar-28
Dr. J. Millen
400,000
-
-
-
400,000
400,000
3.16
26-Mar-19
26-Mar-29
Dr. J. Millen
985,454
-
-
-
985,454
985,454
7.55
02-Mar-21
01-Mar-31
Dr. P. Harper (FD)
129,046
-
129,046
-
-
-
6.17
24-Mar-15
24-Mar-25
Dr. P. Harper (FD)
258,092
-
258,092
-
-
-
3.50
21-Dec-15
21-Dec-25
Dr. P. Harper (FD)
140,000
-
140,000
-
-
-
5.35
26-Mar-18
27-Mar-28
Dr. P. Harper (FD)
448,760
-
448,760
-
-
-
7.55
02-Mar-21
01-Mar-31
Dr. P. Sargent
-
1,354,725
1,354,725
677,363
1.55
06-Feb-24
05-Feb-34
Dr. P. Sargent
-
1,354,725
1,354,725
-
2.55
06-Feb-24
05-Feb-34
Dr. P. Sargent
-
1,354,725
1,354,725
-
3.55
06-Feb-24
05-Feb-34
Other staff
188,605
-
-
-
188,605
188,605
6.17
24-Mar-15
24-Mar-25
Other staff
54,596
-
-
-
54,596
54,596
3.50
21-Dec-15
21-Dec-25
Other staff
201,891
-
-
-
201,891
201,891
2.50
28-Feb-17
28-Feb-27
Other staff
240,000
-
-
-
240,000
240,000
5.35
26-Mar-18
26-Mar-28
Other staff
193,000
-
-
-
193,000
193,000
3.16
26-Mar-19
26-Mar-29
Other staff
582,333
-
-
-
582,333
582,333
7.55
02-Mar-21
01-Mar-31
Other staff
635,188
-
-
-
635,188
423,459
4.38
29-Apr-22
29-Apr-32
Total
7,270,508
4,064,175
975,898
-
10,358,785
6,760,243
Please note, FD denotes
Former director
There were 4,064,175 (2023: nil) share options granted during the year. The weighted average share price at the date of grant in
the year was £0.03. The options vest according to time and performance-based criteria.
The options outstanding at 30 June 2024 had an exercise price ranging from £0.0155 to £0.0755, and a remaining contractual life
ranging between 9 months and 10 years.
Fair value is measured using Black-Scholes share option pricing model.
The expected volatility is based on the sixty-day average historical volatility of the Company over 3 years.
The expected life of options is 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.
51
Total expenses of £22,331 related to equity settled share-based payment transactions were recognised in the year (2023:
£34,170).
22
Share capital
2024
£
2023
£
Ordinary share capital, issued and fully paid
135,472,478 Ordinary of 0.4p each
541,890
389,699
2,481,657,918 Deferred of 0.036p each
893,397
893,397
1,435,287
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.
2024
£
2023
£
Reconciliation of movements during the year:
A 1 July 2023
97,424,778 2,481,657,918
Issue of fully paid shares
38,047,700
-
At 30 June 2024
135,472,478 2,481,657,918
Current year changes to Ordinary share capital
On 3 July 2023 the Company issued 38,047,400 ordinary shares of 0.4p at a price of 1p per ordinary share, the proceeds of which
were used for working capital purposes.
23
Share premium account
£
At 1 July 2022
5,936,478
At 30 June 2023
5,936,478
Issue of new shares
228,286
Share issue expense
(42,649)
At 30 June 2024
6,122,115
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) less the direct costs of issue.
52
24
Other reserves: share-based compensation reserve
£
At 1 July 2022
281,660
Additions
34,170
Other movements
(168,179)
At 30 June 2023
147,651
Additions
22,331
Other movements
(18,595)
At 30 June 2024
151,387
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, £18,595 (2023: £168,179) was transferred from the share-based
payment reserve to the retained earnings.
25
Retained earnings
£
At 1 July 2022
(6,526,427)
Loss for the year
(477,257)
Other movements
168,179
At 30 June 2023
(6,835,505)
Loss for the year
(609,352)
Other movements
18,595
At 30 June 2024
(7,426,262)
Retained earnings includes an amount of £237,889 (2023: £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, £18,595 (2023: £168,179) was transferred from the share-based
payment reserve to the 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:
2024
£
2023
£
Minimum lease payments under operating leases
48,468
70,248
53
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:
2024
£
2023
£
Within one year
3,825
7,354
3,825
7,354
27
Capital commitments
At 30 June 2024 and 30 June 2023 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 9 July 2024, a date which is after the reporting date but prior to the date of signing these financial statements, the Board
allotted 67,736,240 ordinary shares. All shares were placed at £0.006 per share, with gross proceeds raised of £406,417.
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 19.
There were no other related party transactions during the year.
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.
54
32
Cash absorbed by operations
2024
2023
£
£
Loss for the year after tax
(609,352)
(477,257)
Adjustments for:
Taxation credited
(59,402)
(94,752)
Finance costs
33
-
Investment income
(2,095)
(1,724)
Gain on disposal of tangible fixed assets
388
(85)
Amortisation and impairment of intangible assets
1,100
876
Depreciation and impairment of tangible fixed assets
7,850
9,563
Equity settled share-based payment expense
22,331
34,170
Movements in working capital:
(Increase)/decrease in debtors
(1,108)
154,724
Increase/(decrease) in creditors
(16,654)
(3,692)
(Decrease)/increase in deferred revenue outstanding
14,057
5,755
Cash absorbed by operations
(642,852)
(372,422)