TIDMN4P
RNS Number : 0952Q
N4 Pharma PLC
24 February 2021
24 February 2021
N4 Pharma plc
("N4 Pharma", the "Company" or the "Group")
Final Results
N4 Pharma Plc (AIM: N4P), the specialist pharmaceutical company
developing Nuvec(R), a novel delivery system for cancer treatments
and vaccines, is pleased to announce its audited results for the
year ended 31 December 2020.
Nigel Theobald, Chief Executive Officer of N4 Pharma Plc,
commented:
"The last 12 months have seen us make considerable progress in
the dispersion and formulation work for Nuvec(R) which will put us
in a stronger position for our collaboration discussions as we
continue to present our data to potential licensing partners. The
next few months will generate further important in vivo antibody
response data using a SARS COV-2 plasmid both with our original and
optimised Nuvec(R) formulations.
We have also recently announced that the European Patent Office
has notified The University of Queensland of the intention to grant
the patent that we have licensed the exclusive rights to. This has
been followed more recently by the Australian patent office
confirming its intention to grant a patent and we expect other key
territories to follow suit in 2021. This again strengthens our
commercial discussions.
This is a pivotal time for the Company, we are now finalising
the data we feel will give third parties the confidence to explore
testing of Nuvec(R) with their own constructs and we continue to
expand that dataset all the time.
We are continuing work on other applications for Nuvec(R) both
for cancer treatment and also to explore the potential for oral
delivery of vaccines. This work on oral delivery will continue in
the background as there is much that needs doing to establish the
potential for Nuvec(R) in this area as no one experiment will
provide a definitive conclusion either way on this potential."
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014.
Enquiries:
N4 Pharma plc
Nigel Theobald, CEO Via IFC Advisory
Luke Cairns, Executive Director
SP Angel Corporate Finance LLP Tel: +44(0)20 3470
0470
Nominated Adviser and Joint Broker
Matthew Johnson/Caroline Rowe (Corporate
Finance)
Vadim Alexandre/Rob Rees (Corporate Broking)
Turner Pope Investments (TPI) Limited Tel: +44(0)20 3657
0050
Joint Broker
Andy Thacker/Zoe Alexander
IFC Advisory Ltd Tel: +44(0)20 3934
Financial PR 6630
Graham Herring
Zach Cohen
About N4 Pharma
N4 Pharma is a specialist pharmaceutical company developing a
novel delivery system for cancer and vaccine treatments using its
unique silica nanoparticle delivery system called Nuvec(R).
N4 Pharma's business model is to partner with companies
developing novel antigens for cancer and vaccine treatments to use
Nuvec(R) as the delivery vehicle to get their antigen into cells to
express the protein needed for the required immunity. As these
products progress through pre clinical and clinical programs, N4
Pharma will seek to receive up front payments, milestone payments
and ultimately royalty payments once products reach the market.
N4 Pharma plc
Chairman's Report
N4 Pharma Plc (the "Company"), is the holding company and Parent
Company for N4 Pharma UK Limited ("N4 UK"), and together form the
Group (the "Group").
In the comparative year results N4 Biotech also forms part of
the Group. N4 Biotech was dissolved on 14 January 2020.
N4 UK is a specialist pharmaceutical company engaged in the
development of mesoparticulate silica delivery systems to improve
the cellular delivery and potency of vaccines .
The Board has not presented a Strategic Report for the year. All
relevant information on the strategy and performance of the Group
is included in the Chairman's report below and the Directors'
Report on page 9 of the annual report.
Review of operations for the financial year ended 31 December
2020
During the year to 31 December 2020, as anticipated, no revenue
was generated by the Group (31 December 2019: GBPnil).
The operating loss for the year was GBP1,564,421 (31 December
2019: GBP947,340 loss). Expenditure was broadly in line with budget
and increased in line with study results determining the next
expenditure requirements to progress work streams.
During the course of the year the Company raised in excess of
GBP4.15m, through a placing of 50,731,250 new ordinary shares in
May and a further 25,000,000 shares in December with the remainder
being through the exercise of warrants and options. In total the
Company issued 79,617,812 new ordinary shares of 0.4p in 2020.
Cash at the year-end stood at GBP3,555,579 (31 December 2019:
GBP 965,752) . Our cash position is the strongest it has ever been
and leaves us well positioned to complete our current work streams,
plan for follow on work and fund our costs in any initial
collaboration work.
Key Operational Events and Opportunities
The first part of 2020 saw the Group focus on the optimisation
of Nuvec(R) starting with the improved manufacture and dispersion
of the particle. In parallel, we entered into a research
collaboration agreement with Nanomerics Limited ("Nanomerics") to
focus on the stability of a number of different formulations of
Nuvec(R) using both a well characterised plasmid DNA and a novel
small interfering RNA (siRNA). Whilst these work streams remained
ongoing, the advent of the Covid-19 pandemic presented significant
local and global challenges but also created an opportunity as to
how Nuvec(R) may be applied as a potential delivery technology to
any of the multiple Covid-19 vaccines recently approved and in
development across the world.
Whilst we did not initially envisage a material disruption to
our studies, the scale of lockdown created minor but inevitable
delays to our optimisation work. As working practices have evolved
against the backdrop of the pandemic, these work streams are now
very much on track and continue to expand our data set for
Nuvec(R). With such attention on Covid-19 and potential vaccines,
we took the decision to undertake a proof of concept study prior to
a full in vivo study to assess the efficacy of Nuvec(R) loaded with
the Coronavirus plasmid DNA. This work was undertaken by an
experienced contract research organisation, Evotec, and concluded
having demonstrated the successful in vitro transfection of HEK
cells resulting in the decision to move to a full in vivo study as
set out further below.
As announced previously our current strategy has been divided
across three work streams:
1. Completion of the optimisation work including the
establishment of optimal dispersion, loading ratios and the tech
transfer for consistent manufacture of naked nanosilica
particles;
2. The scoping and implementation of our most comprehensive in vivo study to date; and
3. Feasibility studies on other applications for Nuvec(R) such
as for oral vaccines and in oncology.
Updates on each stream are as follows:
Optimisation and tech transfer
Over the last 12 months, our program of optimisation work has
been undertaken to further characterise Nuvec (R) nanoparticulate
silica with the objective of developing a colloidally stable
monodisperse formulation suitable for scaled manufacture. This work
has been successful, and a process has been developed which results
in a monodisperse nanoparticulate formulation which can be freeze
dried and reconstituted without loss of colloidal stability.
Importantly this formulation also retains in vitro transfection
activity when stored dry for up to 14 days at 0-4C and room
temperature, before reconstitution. Longer term stability
assessment will be conducted in due course.
Other studies have also been conducted to optimise the PEI
content, determine need for phosphonation and to assess the optimal
pH and buffer capacity of the medium in which Nuvec (R) is
dissolved.
In September we appointed Ardena as our contract development and
manufacturing organisation ('CDMO') partner for the technology
transfer and upscaling manufacturing of Nuvec(R). Work has been on
schedule and Ardena is currently working on the process
optimisation and scale-up resulting in the manufacture and analysis
of a non-GMP 50g batch of Nuvec(R) prior to moving towards the
manufacture, testing and product certification of Nuvec(R) for GMP
status.
In Vivo study plans and implementation
The in vivo study to compare the reactions of the original
Nuvec(R) loaded with the Coronavirus plasmid and another generic
plasmid in generating relevant antibodies, has recently commenced
at the University of Queensland. The commencement of this work is a
little later than originally envisaged, following delays in
obtaining the relevant customs clearance to transport the
Coronavirus plasmid expressing the spike protein into
Australia.
Having optimised Nuvec(R) as described above, we are now
planning the commencement of further in vivo studies to determine
whether the improved properties noted in vitro can also be seen in
vivo. These studies will be undertaken by Evotec with study
initiation expect by early March.
The optimised Nuvec(R) in vivo studies in mice are planned to
assess the following points:
(1) to determine antibody production following dosing with
optimised Nuvec(R);
(2) To explore dose relationship to determine minimum and
maximum plasmid dose required for effect. This information may also
provide information on dose-sparing i.e. reduced DNA use; and
(3) to confirm activity is retained after freeze drying and
reconstitution at different intervals.
These studies will again involve the Coronavirus plasmid and
another generic plasmid. Results from both studies should be known
during the first half of 2021.
Oral and oncology applications
In November we announced the launch of our Nuvec(R) oncology
treatment programme with Nanomerics Limited. The programme will
explore the role of Nuvec(R) as a delivery system for DNA and SiRNA
in a proof of concept preclinical tumour model. The two-stage
programme will focus initially on the formulation of Nuvec(R) with
a therapeutic DNA plasmid, whilst stage two will see the candidate
formulation evaluated in vivo in a subcutaneous tumour model to
examine tumour regression following multiple local or systemic
injections.
Our work to understand the viability of Nuvec(R) in oral
delivery remains ongoing and is currently focussed on extensive in
vitro work. In particular we are assessing the ability to transfect
epithelial cells in the gut as well as the impact of mucus and
other variables. Whilst the commercial potential of successfully
demonstrating Nuvec's(R) efficacy in oral delivery would be huge we
are still at the early stages of establishing whether it is
feasible. As this work continues in the background our primary
focus remains Nuvec's(R) potential use to improve the cellular
delivery and potency of vaccines.
The strengthening of our balance sheet through the funds raised
in May of this year, means that we are well funded to complete all
our currently planned work streams whilst the recent placing in
December means we can plan for more supplementary studies whilst
being able to budget for the next stage of work following the
current in vivo studies and the oral and oncology work.
Intellectual Property
As announced on 11 February the University of Queensland ("UQ")
has been notified by the European Patent Office ("EPO") of its
intention to grant a European Patent in relation to Nuvec(R)
specifically in respect of its composition, particulate materials
and methods for making the particulate materials (the "Patent"). N4
Pharma has the exclusive worldwide rights to Nuvec(R) for
therapeutic uses in humans and animals.
Having received the notification, the next steps prior to formal
grant will require UQ to confirm the particulars and translations
with the EPO prior to publication of the grant after which the
Patent will be validated on a country by country basis throughout
Europe as determined by UQ and the Company. This process, resulting
in the full grant of the Patent in each chosen territory, should
take six to eight months.
The Patent application process for other jurisdictions remains
on course and the board is optimistic that now the Patent has
successfully been processed by the EPO other jurisdictions should
follow suit in due course. In line with this optimism I am
delighted to announce that the Australian patent office has also
notified UQ of its intention to grant an Australian Patent.
Board Changes
On 15 July 2020 Luke Cairns, previously a Non-Executive
Director, became an Executive Director, overseeing the Group's
finance, corporate and investor relations activities allowing Nigel
Theobald, Chief Executive Officer, more time to focus on driving
the Group's development programmes and potential commercial
collaborations .
Future Prospects
What is increasingly clear with the ongoing Coronavirus pandemic
is that even with the great success of the recently approved
vaccines, as the virus evolves, so will the vaccines and there will
be multiple iterations in the years to come. Cost effective
storage, transportation and effective delivery are areas where any
improvements could have a material impact on the successful role
out of vaccines, particularly in emerging markets where wide scale
accessibility to vaccines remains challenging. It is our hope that
as we look to conclude our most comprehensive Nuvec(R) studies to
date, we will be able to present Nuvec(R) as a viable delivery
solution to vaccine developers.
It is important to stress that we see Nuvec(R) as a platform
delivery technology and whilst it may suit some plasmids better
than others it is our intention that it be used across multiple
vaccines and not just those addressing Coronavirus. Through our
oral studies we are also examining how Nuvec(R) could simplify the
way vaccines are administered. Whilst the majority of our data has
been gathered using plasmid DNA we are increasing our work with
mRNA. Together with our oncology programme, 2021 could turn out to
be a pivotal year for N4 Pharma, as our various applications for
Nuvec(R) advance to the point where we can engage further with
potential collaborators and partners. In parallel we are also
exploring other assets that could be complimentary to Nuvec(R).
On behalf of the Board, I would like to thank all of our
shareholders for their continued patient support and look forward
to providing further updates on our progress.
By order of the Board
John Chiplin
Chairman
N4 Pharma Plc
Consolidated Statement of Comprehensive Income for the year
ended 31 December 2020
Notes 2020 2019
GBP GBP
------------ ------------
Research and development
costs (900,410) (216,948)
General and administration
costs (664,011) (730,392)
Operating loss for the
year (1,564,421) (947,340)
Finance expenditure (1,963) (1,385)
Loss for the year before
tax 4 (1,566,384) (948,725)
Taxation 5 261,541 72,352
Loss for the year after
tax (1,304,843) (876,373)
Other comprehensive income
net of tax - -
Total comprehensive loss
for the year attributable
to equity owners of N4
Pharma Plc (1,304,843) (876,373)
------------------------------ ------ ------------ ------------
Loss per share attributable
to owners of the parent
Weighted average number
of shares:
Basic 136,303,141 100,168,016
Diluted 139,432,226 100,168,016
Basic loss per share (0.96) (0.87p)
Diluted loss per share (0.94) (0.87p)
All activities derive from continuing operations.
N4 Pharma Plc
Consolidated Statement of Financial Position as at 31 December
2020
Notes 2020 2019
GBP GBP
Current assets
Trade and other receivables 6 270,837 99,269
Cash and cash equivalents 3,555,579 965,752
3,826,416 1,065,021
Total assets 3,826,416 1,065,021
----------------------------- ------ ------------- -------------
Liabilities
Current liabilities
Trade and other payables 7 (142,484) (51,547)
Accruals and deferred
income (26,598) (26,136)
----------------------------- ------ ------------- -------------
(169,082) (77,683)
Total assets less
current liabilities 3,657,334 987,338
----------------------------- ------ ------------- -------------
Net assets 3,657,334 987,338
----------------------------- ------ ------------- -------------
Equity
Share capital 9 8,995,146 8,676,675
Share premium 9 13,945,602 10,327,258
Share option reserve 9 63,290 25,266
Reverse acquisition
reserve (14,138,244) (14,138,244)
Merger reserve 279,347 279,347
Retained earnings (5,487,807) (4,182,964)
----------------------------- ------ ------------- -------------
Total equity 3,657,334 987,338
----------------------------- ------ ------------- -------------
N4 Pharma Plc
Consolidated Statement of Changes in Equity for the year ended
31 December 2020
(i) Year ended Share Share Share option Reverse Merger Retained Total equity
31 December capital premium reserve acquisition reserve earnings
2020 reserve
GBP GBP GBP GBP GBP GBP GBP
----------- ------------- ------------- -------------- ------------- ------------ -------------
Balance at 1
January 2020 8,676,675 10,327,258 25,266 (14,138,244) 279,347 (4,182,964) 987,338
Total
comprehensive
loss for
the year - - - - - (1,304,843) (1,304,843)
Share issue 318,471 3,618,344 - - - - 3,936,815
Share option
reserve - - 38,024 - - - 38,024
----------- ------------- ------------- -------------- ------------- ------------ -------------
At 31 December
2020 8,995,146 13,945,602 63,290 (14,138,244) 279,347 (5,487,807) 3,657,334
----------- ------------- ------------- -------------- ------------- ------------ -------------
(ii) Year Share Share Share option Reverse Merger Retained Total equity
ended 31 capital premium reserve acquisition reserve earnings
December reserve
2019
GBP GBP GBP GBP GBP GBP GBP
----------- ------------- ------------- -------------- ------------- ------------ -------------
Balance at 1
January 2019 8,634,675 9,328,848 81,909 (14,138,244) 279,347 (3,306,591) 879,944
Total
comprehensive
loss for
the year - - - - - (876,373) (876,373)
Share issue 42,000 998,410 - - - - 1,040,410
Share option
reserve - - (56,643) - - - (56,643)
At 31 December
2019 8,676,675 10,327,258 25,266 (14,138,244) 279,347 (4,182,964) 987,338
N4 Pharma Plc
Consolidated Statement of Cash Flow for the year ended 31
December 2020
2020 2019
GBP GBP
----------------------------------- -------------- ------------
Operating activities
Loss before tax (1,566,384) (948,725)
Finance expenditure 1,963 1,385
Share based payments to employees 3,977 5,713
Operating loss before changes
in working capital (1,560,444) (941,627)
Movements in working capital:
(Increase)/Decrease in trade
and other receivables (30,534) 29,441
Decrease in trade, other payables
and accruals 91,399 (112,440)
Taxation 120,507 220,568
Cash used in operations (1,379,072) (804,058)
------------------------------------ -------------- ------------
Net cash flows used in operating
activities (1,379,072) (804,058)
------------------------------------ -------------- ------------
Financing activities
Finance expenditure (1,963) (1,385)
Net proceeds of ordinary share
issue 3,970,862 978,054
Net cash flows from financing
activities 3,968,899 976,669
------------------------------------ -------------- ------------
Net increase in cash and cash
equivalents 2,589,827 172,611
Cash and cash equivalents
at beginning of the year 965,752 793,141
Cash and cash equivalents
at 31 December 3,555,579 965,752
Notes to the Consolidated Financial Statements for the year
ended 31 December 2020
1. Accounting policies
1.1 Reporting entity
N4 Pharma Plc (the "Company"), is the holding Company for N4
Pharma UK Limited ("N4 UK"), and together form the Group (the
"Group"). N4 Pharma UK Limited is a specialist pharmaceutical
company engaged in the development of mesoparticulate silica
delivery systems to improve the cellular delivery and potency of
vaccines . The nature of the business is not deemed to be impacted
by seasonal fluctuations and as such performance is expected to be
consistent.
The Company is domiciled in England and Wales and was
incorporated and registered in England and Wales on 6 July 1979 as
a public limited company and its shares are admitted to trading on
AIM (LSE: N4P). The Company's registered office is located at 6th
Floor, 60 Gracechurch Street, London, EC3V 0HR.
The Accounts have been prepared in accordance with International
accounting standards in conformity with the requirements of the
Companies Act 2006 and applied to the Parent Company Accounts in
accordance with the provisions of the Companies Act 2006.
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in these
Consolidated Financial Statements.
The Company has taken advantage of the exemption granted by
Section 408 of the Companies Act 2006 from presenting its own
Income Statement. The loss generated by the Company is disclosed
under the Company Statement of Financial Position.
1.2 Measurement convention
The Consolidated Financial Statements are prepared on the
historical cost basis, except for the following items:
-- Share-based payments related to investment acquisition are
measured at fair value shown in the Merger Reserve.
-- Share-based payments related to employee costs are measured
at fair value shown in the Statement of Comprehensive Income.
-- Share Warrants and Options are measured at fair value using
the Black Scholes model (see note 9).
The Consolidated Financial Statements are presented in Great
British Pounds ("GBP" or "GBP").
1.3 Going concern
These Consolidated Financial Statements have been prepared on
the basis of accounting principles applicable to a going concern.
The Directors consider that the Group will have access to adequate
resources, as set out below, to meet the operational requirements
for at least 12 months from the date of approval of these
Consolidated Financial Statements. For this reason, they continue
to adopt the going concern basis in preparing the Consolidated
Financial Statements.
The Group currently has no source of operating cash inflows,
other than interest and grant income, and has incurred net
operating cash outflows for the year ended 31 December 2020 of
GBP1,379,072 (2019: GBP804,058 outflow). At 31 December 2020, the
Group had cash balances of GBP3,555,579 (2019: GBP965,752) and a
surplus in net working capital (current assets, including cash,
less current liabilities) of GBP3,657,334 (2019: GBP987,338).
The Group prepares regular business forecasts and monitors its
projected cash flows, which are reviewed by the Board. Forecasts
are adjusted for reasonable sensitivities that address the
principal risks and uncertainties to which the Group is exposed,
thus creating a number of different scenarios for the Board to
challenge. In those cases, where scenarios deplete the Group's cash
resources too rapidly, consideration is given to the potential
actions available to management to mitigate the impact of one or
more of these sensitivities, in particular the discretionary nature
of costs incurred by the Group, in order to ensure the continued
availability of funds.
As the Group did not have access to bank debt and future funding
is reliant on issues of shares in the Parent Company, the Board has
derived a mitigation plan for the scenarios modelled as part of the
going concern review.
The Group has considered COVID-19 and the impact it will have on
its operations. COVID-19 has not had any material negative impact
on the operations of the Group during the year and it is
anticipated that the Group will remain a going concern despite the
unknown developments of COVID-19.
On the basis of this analysis, the Board has concluded that
there is a reasonable expectation that the Company will have
adequate resources to continue in operational existence for the
foreseeable future being a period of at least twelve months from
the Consolidated Statement of Financial Position date.
1.4 Basis of consolidation
Intra-Group balances and transactions, and any unrealised income
and expenses arising from intra-Group transactions, are eliminated
in preparing the Consolidated Financial Statements.
1.5 Revenue
Revenue is recognised to the extent this it is probable that
economic benefit will flow to the Group and the revenue can be
reliably measured. Revenue is measured at the lower of value of the
consideration received or receivable for the sale of goods or
services, excluding discounts, rebates, VAT and other sales taxes
and duties.
The Group has not recognised any revenue to date.
1.6 Government grant income
Government grants are recognised only when there is reasonable
assurance that the Group will comply with the conditions attaching
to them and that the grants will be received.
Government grants are recognised in the Consolidated Statement
of Comprehensive Income on a systematic basis over the periods in
which the Group recognises and expenses the related costs for which
the grants are intended to compensate.
Government grants that are receivable as compensation for
expenses or losses already incurred or for the purpose of giving
immediate financial support to the Group with no future related
costs are recognised in Consolidated Statement of Comprehensive
Income in the period in which they become receivable.
1.7 Expenses
Financing income and expenses
Financing expenses comprise interest expense and finance
charges. Financing income comprises interest receivable on funds
invested.
Interest income and interest payable is recognised in the
Consolidated Statement of Comprehensive Income as it accrues, using
the effective interest method.
Research and development
Research costs are charged against the Consolidated Statement of
Comprehensive Income as they are incurred. Certain development
costs will be capitalised as intangible assets when it is probable
that the future economic benefits will flow to the Group. Such
intangible assets will be amortised on a straight-line basis from
the point at which the assets are ready for use, over the period of
the expected benefit, and are reviewed for impairment at each year
end date. Other development costs are charged against income as
incurred since the criteria for their recognition as an asset is
not met.
The criteria for recognising expenditure as an asset are:
-- It is technically feasible to complete the product;
-- Management intends to complete the product and use or sell
it;
-- There is an ability to use or sell the product;
-- It can be demonstrated how the product will generate probable
future economic benefits;
-- Adequate technical, financial and other resources are
available to complete the development, use and sale of the product;
and
-- Expenditure attributable to the product can be reliably
measured.
The costs of an internally generated intangible asset comprise
all directly attributable costs necessary to create, produce and
prepare the asset to be capable of operating in the manner intended
by management. Directly attributable costs include employee costs
incurred on technical development, testing and certification,
materials consumed and any relevant third-party cost. The costs of
internally generated developments are recognised as intangible
assets and are subsequently measured in the same way as externally
acquired intangible assets. However, until completion of the
development project, the assets are subject to impairment testing
only.
1.8 Taxation
Taxation
Taxation for the year comprises current and deferred tax. Tax is
recognised in the Consolidated Statement of Comprehensive Income,
except to the extent that it relates to items recognised directly
in equity.
Current or deferred taxation assets and liabilities are not
discounted.
Current tax
Current tax is recognised at the amount of tax payable using the
tax rates and laws that have been enacted or substantively enacted
by the Consolidated Statement of Financial Position date.
Deferred tax
Deferred tax is recognised in respect of all timing differences
that have originated but not reversed at the Consolidated Statement
of Financial Position date.
Timing differences arise from the inclusion of income and
expenses in tax assessments in periods different from those in
which they are recognised in Consolidated Financial Statements.
Deferred tax is measured using tax rates and laws that have been
enacted or substantively enacted by the year end and that are
expected to apply to the reversal of the timing difference.
Unrelieved tax losses and other deferred tax assets are
recognised only to the extent that it is probable that they will be
recovered against the reversal of deferred tax liabilities or other
future taxable profits.
1.9 Earnings per share
The Group presents basic and diluted earnings or loss per share
data for its ordinary shares. Basic earnings/loss per share is
calculated by dividing the profit or loss attributable to ordinary
shareholders of the Company by the weighted average number of
ordinary shares outstanding during the period, adjusted for own
shares held. Diluted earnings/loss per share is determined by
adjusting the profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shares outstanding,
adjusted for own shares held, for the effects of all dilutive
potential ordinary shares, which comprise share options
granted.
1.10 Operating segments
Segment results that are reported to the Chief Executive Officer
include items directly attributable to a segment as well as those
that can be allocated on a reasonable basis. Unallocated items
comprise mainly corporate assets, head office expenses, and income
tax assets and liabilities.
Segment capital expenditure is the total cost incurred during
the period to acquire plant and equipment, and intangible assets
other than goodwill.
The Group operated in one business segment, that of the
development and commercialisation of medicines via its delivery
system called Nuvec(R). No revenue has yet been generated by any of
the work undertaken by the Group.
The Directors consider that there are no identifiable business
segments that are subject to risks and returns different to the
core business. The information reported to the Directors, for the
purposes of resource allocation and assessment of performance, is
based wholly on the overall activities of the Group.
1.11 Presentation and classification of financial instruments issued by the Group
In accordance with IAS 32, financial instruments issued by the
Group are treated as equity only to the extent that they meet the
following two conditions:
(a) they include no contractual obligations upon the Group to
deliver cash or other financial assets or to exchange financial
assets or financial liabilities with another party under conditions
that are potentially unfavourable to the Group; and
(b) where the instrument will or may be settled in the Company's
own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the Company's own
equity instruments or is a derivative that will be settled by the
Company exchanging a fixed amount of cash or other financial assets
for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of
issue are classified as a financial liability. Where the instrument
so classified takes the legal form of the Company's own shares, the
amounts presented in these Consolidated Financial Statements for
called up share capital and share premium account exclude amounts
in relation to those shares.
Where a financial instrument that contains both equity and
financial liability components exists these components are
separated and accounted for individually under the above
policy.
1.12 Non-derivative financial instruments
Non-derivative financial instruments comprise investments, trade
and other receivables, cash and cash equivalents and trade and
other payables.
Investments
Investments are investments held in subsidiaries accounted for
at cost under IAS 27.
Trade and other receivables
Trade and other receivables are recognised initially at fair
value. Subsequent to initial recognition they are measured at
amortised cost less impairment.
Trade and other payables
Trade and other payables are recognised initially at fair value.
Subsequent to initial recognition they are measured at amortised
cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and
comprise cash in hand, deposits held at call with banks, other
short-term liquid investments with original maturities of three
months or less, and bank overdrafts. Any overdrafts are shown
within borrowings in current liabilities.
1.13 Impairment
A financial asset not carried at fair value through profit or
loss is assessed at each reporting date to determine whether there
is objective evidence that it is impaired. A financial asset is
impaired if objective evidence indicates that a loss event has
occurred after the initial recognition of the asset, and that the
loss event had a negative effect on the estimated future cash flows
of that asset that can be estimated reliably.
An impairment loss in respect of a financial asset measured at
amortised cost is calculated as the difference between its carrying
amount and the present value of the estimated future cash flows
discounted at the asset's original effective interest rate.
Interest on the impaired asset continues to be recognised through
the unwinding of the discount. When a subsequent event causes the
amount of impairment loss to decrease, the decrease in impairment
loss is reversed through the Statement of Comprehensive Income.
The carrying amounts of the Group's non-financial assets are
reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the
asset's recoverable amount is estimated.
The recoverable amount of an asset is the greater of its value
in use and its fair value less costs to sell. In assessing value in
use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to the asset. For the purpose of impairment testing,
assets that cannot be tested individually are grouped together into
the smallest Group of assets that generates cash inflows from
continuing use that are largely independent of the cash inflows of
other assets or Groups of assets (the "cash-generating unit").
An impairment loss is recognised if the carrying amount of an
asset or its cash generating unit exceeds its estimated recoverable
amount. Impairment losses are recognised in profit or loss.
Impairment losses recognised in respect of cash generated units are
allocated first to reduce the carrying amount of any goodwill
allocated to the units, and then to reduce the carrying amounts of
the other assets in the unit (Group of units) on a pro rata
basis.
Impairment losses recognised in prior periods are assessed at
each reporting date for any indications that the loss has decreased
or no longer exists. An impairment loss is reversed if there has
been a change in the estimates used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the
asset's carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if
no impairment loss had been recognised.
1.14 Share based payment arrangements
Share-based payment arrangements in which the Group receives
goods or services as consideration for its own equity instruments
are accounted for as equity-settled share-based payment
transactions, regardless of how the equity instruments are obtained
by the Group.
Share-based transactions, other than those with employees, are
measured at the value of goods or services received where this can
be reliably measured. Where the services received are not
identifiable, their fair value is determined by reference to the
grant date fair value of the equity instruments provided. Should it
not be possible to measure reliably the fair value of identifiable
goods and services received, their fair value shall be determined
by reference to the fair value of the equity instruments provided
measured over the period of time that the goods and services are
received.
The expense is recognised in the Consolidated Statement of
Comprehensive Income or capitalised as part of an asset when the
goods are received or as services are provided, with a
corresponding increase in equity.
The grant date fair value of share-based payment awards granted
to employees is recognised as an employee expense, with a
corresponding increase in equity, over the period that the
employees become unconditionally entitled to the awards. The fair
value of the options granted is measured using an option valuation
model, taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of awards for which the
related service and non-market vesting conditions are expected to
be met, such that the amount ultimately recognised as an expense is
based on the number of awards that do meet the related service and
non-market performance conditions at the vesting date. For
share-based payment awards with non-vesting conditions, the grant
date fair value of the share-based payment is measured to reflect
such conditions and there is no "true-up" for differences between
expected and actual outcomes.
Share-based payment transactions in which the Group receives
goods or services by incurring a liability to transfer cash or
other assets that is based on the price of the Group's equity
instruments are accounted for as cash-settled share-based payments.
The fair value of the amount payable to recipients is recognised as
an expense, with a corresponding increase in liabilities, over the
period in which the recipients become unconditionally entitled to
payment. The liability is re-measured at each Consolidated
Statement of Financial Position date and at settlement date. Any
changes in the fair value of the liability are recognised in the
Consolidated Statement of Comprehensive Income.
1.15 Adoption of new and revised International Financial Reporting Standards
The following IFRS standards, amendments or interpretations
became effective during the year ended 31 December 2020 but have
not had a material effect on this Consolidated Financial
Information:
Standard
-------------------------------------------------------
Amendments to References to the Conceptual Framework
in IFRS Standards
Amendments to IFRS 3 Business Combinations (Definition
of a Business)
Amendments to IAS 1 and IAS 8: Definition of Material
Amendments to IFRS 9, IAS 39 and IFRS 7: Interest
Rate Benchmark Reform
Amendments to IFRS 16: Leases (Covid-19-Related Rent
Concessions)
All new standards and amendments to standards and
interpretations effective for annual periods beginning on or after
1 January 2020 that are applicable to the Group have been applied
in preparing these Consolidated Financial Statements.
The standards and interpretations that are issued, but not yet
effective, up to the date of issuance of the Consolidated Financial
Statements are disclosed below. The Group intends to adopt these
standards, if applicable, when they become effective.
Effective
Standard date
----------------------------------------------------------- ----------
Amendments to IAS 1 Classification of Liabilities 1 January
as Current or Non-Current 2023
Amendments to IFRS 3 Reference to the Conceptual 1 January
Framework 2022
Amendments to IAS 16 Property Plant and Equipment 1 January
(Proceeds before intended use) 2022
Amendments to IAS 37 Onerous Contracts (Cost of fulfilling 1 January
a contract) 2022
Annual Improvements to IFRS Standards 2018-2020 1 January
2022
IFRS 17 - Insurance Contracts 1 January
2023
The Directors are continuing to assess the potential impact that
the adoption of the standards listed above will have on the
Consolidated Financial Statements for the year ended 31 December
2021.
1.16 Use of estimates and judgements
The preparation of Consolidated Financial Statements in
conformity with IFRSs requires management to make certain
judgements, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets,
liabilities, income and expenses during the period. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected.
In the process of applying the Group's accounting policies,
management has decided the following estimates and assumptions are
material to the carrying amounts of assets and liabilities
recognised in the Consolidated Financial Statements.
Critical judgements
Research and development expenditure
The key estimates and judgements surrounding the capitalisation
of Research & Development expenditure is whether the
expenditure meets the criteria for capitalisation. Expenditure will
only be capitalised when the recognition criteria is met and is
otherwise written off to the Consolidated Statement of
Comprehensive Income. The recognition criteria include the
identification of a clearly defined project with separately
identifiable expenditure where the outcome of the project, in terms
of its technical feasibility and commercial viability, can be
measured or assessed with reasonable certainty and that sufficient
resources exist to complete a profitable project. In the event that
these criteria are met, and it is probable that future economic
benefit attributable to the product will flow to the Group, then
the expenditure will be capitalised.
Impairment of investments and intercompany debtors
N4 UK has sustained losses and the Statement of Financial
position is in deficit. This is a potential indicator of
impairment. The recoverability of intercompany debtor and the cost
of investment is dependent on the future profitability of the
entity. No provision for impairment has been made in these accounts
and this is a significant judgement.
2. Risk management
Overview
The Group has exposure to the following risks:
-- Credit risk;
-- Liquidity risk;
-- Tax risk;
-- Market risk; and
-- Operational risk
-- Regulatory and legislative risk
This note presents information about the Group's exposure to
each of the above risks, its objectives, policies and processes for
measuring and managing risk, and its management of capital. Further
quantitative disclosures are included throughout these Consolidated
Financial Statements.
Risk management framework
The Board of Directors has overall responsibility for the
establishment and oversight of the risk management framework and
developing and monitoring the Group's risk management policies. Key
risk areas have been identified and the Group's risk management
policies and systems will be reviewed regularly to reflect changes
in market conditions and the Group's activities.
The Audit Committee oversees how management monitors compliance
with the Group's risk management policies and procedures and
reviews the adequacy of the risk management framework in relation
to the risks faced by the Group.
Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group's
bank deposits and receivables. See note 12 for further detail. The
risk of non-collection is considered to be low. This risk is deemed
low at present due to the Group not yet trading and generating
revenue but is a consideration for future risks.
There is an intercompany debtor balance between the Company and
N4 UK. The recoverability of this debtor is dependent on the future
profitability of the entity. As N4 UK has sustained losses and the
Statement of Financial position is in deficit it is currently not
in a position to repay this amount and this therefore poses a
credit risk.
Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another
financial asset. The Group's approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to the Group's reputation. The Group monitors cash
flow on a monthly basis through forecasting to help mitigate this
risk.
Tax risk
Any change in the Group's tax status or in taxation legislation
or its interpretations could affect the value of the investments
held by the Group or the Group's ability to provide returns to
shareholders or alter post-tax returns to shareholders.
Market risk and competition
The Group operates as a specialist pharmaceutical Company
engaged in the development of mesoparticulate silica delivery
systems to improve the cellular delivery and potency of vaccines.
The Group is entering into a market with existing competitors and
the prospect of new entrants entering the current market. There is
no guarantee that current competitors or new entrants to the market
will not appeal to a wider portion of the Group's target market or
command broader band awareness.
In addition, the Group's future potential revenues from product
sales will be affected by changes in the market price of
pharmaceutical drugs and could also be subject to regulatory
controls or similar restrictions.
Market risk is monitored continuously by the Group and the Board
reacts to any changes in market conditions as and when they
arise.
Operational risk
The Group is at an early stage of development and is subject to
several operational risks. The commencement of the Group's material
revenues is difficult to predict and there is no guarantee the
Group will generate material revenues in the future. The Group has
a limited operational history upon which its performance and
prospects can be evaluated and faces the risks frequently
encountered by developing companies. The risks include the
uncertainty as to which areas of pharmaceuticals to target for
growth.
Operational risk is managed by adapting the future plans of the
Group based on results and feedback from employees, suppliers and
contractors.
Regulatory and legislative risk
The operations of the Group are such that it is exposed to the
risk of litigation from its suppliers, employees and regulatory
authorities. Exposure to litigation or fines imposed by regulatory
authorities may affect the Group's reputation even though monetary
consequences may not be significant.
Any changes to regulations or legislation are reviewed by the
Board on a regular basis and the Group applies any that are
relevant accordingly.
Changes to legislation, regulations, rules and practices may
change and is often the case in the pharmaceutical industry which
is highly regulated and susceptible to regular change. Any changes
may have an adverse effect on the Group's operations.
Protection of intellectual property
The Group's ability to compete significantly relies upon the
successful protection of its intellectual property, in particular
its licenced and owned patent applications for Nuvec(R). The Group
seeks to protect its intellectual property through the filing of
worldwide patent applications, as well as robust confidentiality
obligations on its employees. However, this does not provide
assurance that a third party will not infringe on the Group's
intellectual property, release confidential information about the
intellectual property or claim technology which is registered to
the Group.
Capital management
The Group has no loans or borrowings and has sufficient
resources, in the view of the Directors, to meet its working
capital requirements for the next 12 months.
The Group manages its capital through the preparation of
detailed forecasts, and tracks actual receipts and outlays against
the forecasts on a regular basis, to ensure that the Group will be
able to continue as a going concern while maximising the return to
shareholders.
The capital structure of the Group consists of cash and cash
equivalents and equity comprising, capital, reserves and
accumulated losses.
3. Employees and directors
The average monthly number of employees during the year was 5
(2019: 5). The Directors of the Group are employed by both the
Company and N4 Pharma UK Limited UK and as such are included in the
employee figure. Total Directors remuneration is detailed in note
13 of these Consolidated Financial Statements.
Year to 31 December Year to 31 December
2020 2019
GBP GBP
Wages and Salaries 204,768 276,752
Social security costs 20,370 34,956
Pension costs 219 1,209
---------------------- ----------------------
225,357 312,917
---------------------- ----------------------
4. Loss before tax
Year to 31 Year to 31
December 2020 December 2019
GBP GBP
Loss before taxation is arrived
after charging:
Fees payable to the Group's auditors
for the audit
of the Group's financial statements 21,600 21,200
---------------- ----------------
Other fees payable to auditors:
* Other assurance services 4,500 700
---------------- ----------------
5. Taxation
2020 2019
GBP GBP
Current tax
Research and development tax credit
receivable for the current period (214,884) (72,352)
Adjustments in respect of prior
periods (46,657) -
---------- ---------
(261,541) (72,352)
---------- ---------
Deferred tax
Origination and reversal of temporary
differences - -
---------- ---------
Tax in income statement (261,541) (72,352)
---------- ---------
The tax charge for the year can be reconciled to the loss in the
Consolidated Statement of Comprehensive Income as follows:
2020 2019
GBP GBP
Loss before taxation (1,566,384) (948,725)
------------ ----------
Tax at the UK corporation tax rate
of 19% (2019: 19%) (297,613) (180,258)
Expenses not deductible - -
Net Research and development tax
credits (214,884) (72,352)
Changes in unrecognized deferred
tax 297,613 180,258
Prior year adjustment (46,657) -
------------ ----------
Tax charge for the year (261,541) (72,352)
------------ ----------
At the year end the Group had trading losses carried forward of
GBP8,084,975 (2019: GBP6,868,627) for use against future
profits.
6. Trade and other receivables
Group Group Company Company
2020 2019 2020 2019
GBP GBP GBP GBP
Prepayments 16,009 11,758 15,320 10,478
VAT due 39,944 13,660 14,677 3,575
Corporation tax due 214,884 73,851 - -
Loan interest receivable - - 382,916 229,492
Other debtors - - 4,400 3,500
-------- ------- -------- --------
270,837 99,269 417,313 247,045
-------- ------- -------- --------
7. Trade and other payables
Group Group Company Company
2020 2019 2020 2019
GBP GBP GBP GBP
Trade creditors 116,871 27,157 - 7,512
Employee creditors 3,439 8,152 1,219 1,230
Loan due to directors - 16,000 - -
Other creditors 22,174 238 22,129 -
-------- ------- -------- --------
142,484 51,547 23,348 8,742
-------- ------- -------- --------
8. Share-based payments
a) Options
The Company has the ability to issue options to Directors to
compensate them for services rendered and incentivise them to add
value to the Group's longer-term share value. Equity settled
share-based payments are measured at fair value at the date of
grant. The fair value determined is charged to the Comprehensive
Income Statement on a straight-line basis over the vesting period
based on the Group's estimate of the number of shares that will
vest.
Cancellations of equity instruments are treated as an
acceleration of the vesting period and any outstanding charge is
recognised in full immediately.
Fair value is measured using a Black Scholes pricing model. The
key assumptions used in the model have been adjusted based on management's
best estimate for the effects of non-transferability, exercise restrictions
and behavioral considerations. The inputs into model for the current
year were as follows:
2020 Options
Share price 4.800p
Exercise price 4.800p
Expected volatility 29.9%
Expected option
life 6.5 years
Risk free rate 5.00%
As at 31 December 2020, there were 7,046,513 (2019: 7,679,370) options
in existence over ordinary shares of the Company allocated as follows:
Ordinary Exercise
Date of shares under Lapse Price
Name Grant option Date GBP
2015 Options
Gavin Burnell 14.10.15 1,351,210 14.10.25 0.0280
Luke Cairns 14.10.15 675,302 14.10.25 0.0280
2017 Options
Luke Cairns 03.05.17 717,143 03.05.20 0.0700
David Templeton 03.05.17 717,143 03.05.20 0.0700
Paul Titley 03.05.17 717,143 03.05.20 0.0700
2019 Options
John Chiplin 21.05.19 717,143 21.05.29 0.0355
Christopher Britten 21.05.19 717,143 21.05.29 0.0355
2020 Options
David Templeton 18.05.20 717,143 18.05.30 0.0480
Luke Cairns 18.05.20 717,143 18.05.30 0.0480
Total options 7,046,513
--------------
Share options outstanding:
Number
of shares
At 1 January 2019 7,249,084
Lapse of options (1,004,000)
Options granted 1,434,286
At 31 December 2019 7,679,370
Exercise of options (1,350,000)
Lapse of options (717,143)
Options granted 1,434,286
At 31 December 2020 7,046,513
------------
Each option entitles the holder to subscribe for one ordinary
share in N4 Pharma Plc. Options do not confer any voting rights on
the holder.
An amount of GBP3,977 has been recognised in the Statement of
Comprehensive Income in relation to the share options (2019:
GBP5,713).
On 18 May 2020 717,143 options over ordinary shares were granted
to both David Templeton and Luke Cairns under the Company's share
option scheme and are exercisable at a price of 4.8p per share.
On 8 September 2020 the Company received a notification to
exercise 1,350,000 options from Gavin Burnell a former director
representing 1,350,000 ordinary shares of 0.4 pence each, for a
total consideration of GBP37,800. At the date of exercise, the
options had a fair value of GBP12,319. The 1,350,000 ordinary
shares issued following the exercise of options were admitted to
trading on AIM on 14 September 2020. Gavin Burnell now has
1,351,210 options remaining in issue.
Options exercised in the year ended 31 December 2020 had a
weighted average fair value per share of GBP0.0571 (2019:
GBP0.0522).
The aggregate fair value of the share options issued is as
follows:
2020 2019
GBP GBP
2015 Options 18,493 17,831
2017 Options 26,884 3,037
2018 Options - 2,999
2019 Options 12,270 1,399
2020 Options 5,643 -
------- -------
63,290 25,266
------- -------
a) Warrants
A total of 2,536,562 placing warrants were issued as part of the
Placing on 20 May 2020 which raised GBP2,029,250 before fees and
expenses.
The warrants entitled holders to subscribe for new ordinary
shares at any time in the period of two years following the grant
of the warrants. The expiry date of the placing warrants was 20 May
2022.
2020
Date of Grant Warrant E xp i E xerc Exercised Number of Remaining
balance ry Date ise Pr Warrants Shares issued Warrants
at 1 January i ce GBP (1:1) at 31 December
2020 2020
20.05.2020 - 20.05.2022 0.04 2,536,562 2,536,562 -
--------------- --------------- ------------ ---------- ---------- --------------- ----------------
2019
Date of Grant Warrant E xp i E xerc Exercised Number of Remaining
balance ry Date ise Pr Warrants Shares issued Warrants
at 1 January i ce GBP (1:1) at 31 December
2019 2019
03.05.2017 11,054,071 03.05.2019 0.085 - - -
--------------- -------------- ----------- ---------- ---------- --------------- ----------------
During the year ended 31 December 2020 the full amount of the
warrants issued on 20 May 2020 were exercised on 14 August and 26
August respectively. The total consideration for the warrants was
GBP101,462 and resulted in the issue of 2,536,562 ordinary shares.
At the date of exercise, the warrants had a fair value of
GBP28,758.
The fair value of the warrants in issue and not yet exercised
was determined using the Black Scholes model. The fair value of the
warrants at 31 December 2020 is GBPNil (2019: GBPNil).
9. Capital and reserves
2020 2019
GBP GBP
181,080,349 Ordinary Shares of
0.4p each (2019: 101,462,537 Ordinary
Shares of 0.4p each) 724,321 405,850
137,674,431 Deferred Shares of
4p each (2019: 137,674,431 Deferred
Shares of 4p each) 5,506,977 5,506,977
279,176,540 Deferred Shares of
0.99p each (2019: 279,176,540 Deferred
Shares of 0.99p each) 2,763,848 2,763,848
---------- ----------
8,995,146 8,676,675
========== ==========
All ordinary shares rank equally in all respects, including for
dividends, shareholder attendance and voting rights at meetings, on
a return of capital and in a winding-up.
During the year 79,617,812 (2019:10,500,000) new ordinary shares
of 0.4p each were issued through two placings and the exercise of
warrants and options.
The first placing for 50,731,250 ordinary shares on 21 May 2020
for a total consideration of GBP2,029,250 and the second placing
for 25,000,000 ordinary shares on 9 December 2020 for a total
consideration of GBP2,000,000 had total placing costs of
GBP221,755.
The 137,674,431 deferred shares of 4p, have no right to
dividends nor do the holders thereof have the right to receive
notice of or to attend or vote at any general meeting of the
Company. On a return of capital or on a winding up of the Company,
the holders of the deferred shares shall only be entitled to
receive the amount paid up on such shares after the holders of the
ordinary shares have received their return on capital.
The 279,176, 540 deferred shares of 0. 99p shall be entitled to
receive a special dividend, which is payable upon the repayment to
the Company of any amount owed under certain loan agreements, after
which the Company shall, in priority to any distribution to any
other class of share, pay to the holders of the Special Deferred
Shares an aggregate amount equal to the amount repaid pro rata
according to the number of such shares paid up as to their nominal
value held by each shareholder. They shall be entitled to no other
distribution save for a special dividend and shall not be entitled
to receive notice of or attend or vote at a general meeting of the
Company. On a return of capital on a winding up of the Company,
they shall only be entitled to receive the amount paid up on such
shares up to a maximum of 0.9 pence per share after the holders of
the Ordinary Shares and the Deferred Shares have received their
return on capital .
Reserves
Share premium reserve
The share premium reserve comprises the excess of consideration
received over the par value of the shares issued, plus the nominal
value of share capital at the date of redesignation at no par
value.
Share option reserve
The share option reserve comprises the fair value of warrants
and options granted, less the fair value of lapsed and expired
warrants and options.
Reserves in the Consolidated Statement of Financial Position
comprise the share option reserve, reverse acquisition reserve and
the merger reserve.
10. Earnings per share
The calculation of basic loss per share at 31 December 2020 was
based on the loss of GBP1,304,843 (2019: GBP876,373), and a
weighted average number of ordinary shares outstanding of
136,303,141 (2019: 100,168,016), calculated as follows:
2020 2019
GBP GBP
Losses attributable to ordinary shareholders 1,304,843 876,373
Weighted average number of ordinary shares
Issued ordinary shares at 1 January 100,168,016 89,440,373
Effect of shares issued during the year 36,135,125 10,727,643
------------ ------------
Weighted average number of shares at 31 December 136,303,141 100,168,016
------------ ------------
2020 pence 2019 pence
per share per share
Basic loss per share (0.96) (0.87)
----------- -------------
Diluted loss per share
Diluted earnings per share is calculated by adjusting the
weighted average number of shares outstanding to assume conversion
of all potential dilutive shares, namely share options. In 2019
options existing at 31 December 2019 had an exercise price greater
than the market price of the shares and as a result were excluded
from the diluted loss per share calculation.The calculation of
diluted loss per share at 31 December 2020 was based on the loss of
GBP1,304,843 (31 December 2019: GBP876,373), and a weighted average
number of ordinary shares outstanding of 139,432,226 (2019:
100,168,016).
2020 pence 2019 pence
per share per share
Diluted loss per share (0.94) (0.87)
----------- -----------
11. Financial instruments
(a) Fair values of financial instruments
The fair values of all financial assets and financial
liabilities are equal to their carrying amounts shown in the
Consolidated Statement of Financial Position.
Trade and other receivables
The fair value of trade and other receivables is estimated as
the present value of future cash flows, discounted at the market
rate of interest at the reporting date if the effect is
material.
Trade and other payables
The fair value of trade and other payables is estimated as the
present value of future cash flows, discounted at the market rate
of interest at the reporting date if the effect is material.
Cash and cash equivalents
The fair value of cash and cash equivalents is estimated as its
carrying amount where the cash is repayable on demand. Where it is
not repayable on demand then the fair value is estimated at the
present value of future cash flows, discounted at the market rate
of interest at the reporting date.
(b) Credit risk
Financial risk management
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group's
receivables and cash and cash equivalents. The carrying amount of
cash, cash equivalents and term deposits represents the maximum
credit exposure on those assets. The cash and cash equivalents are
held with UK bank and financial institution counterparties which
are rated at least A .
Exposure to credit risk
The carrying amount of financial assets represents the maximum
credit exposure. Therefore, the maximum exposure to credit risk at
the reporting date of the Group was GBP3,810,407 (2019:
GBP1,053,263), being the total of the carrying amount of financial
assets, shown in the Consolidated Statement of Financial
Position.
(c) Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due.
The following are the contractual maturities of financial
liabilities, including estimated interest payments and excluding
the impact of netting agreements.
Group:
Financial liabilities Carrying Contractual 6 months 6-12 1 -2 years
amount cash flows or less months
GBP GBP GBP GBP GBP
31 December 2020
Trade and other
payables 142,484 142,484 142,484 - -
--------- ------------ --------- -------- -----------
31 December 2019
Trade and other
payables 51,547 51,547 51,547 - -
--------- ------------ --------- -------- -----------
(d) Currency risk
The Group does not have significant exposure to foreign currency
risk at present. The Group does not have any monetary financial
instruments which are held in a currency that differs from that
entity's functional currency.
(e) Interest rate risk
Profile
At the reporting date the interest rate profile of
interest-bearing financial instruments was:
Carrying amount
Group:
2020 2019
GBP GBP
Variable rate instruments
---------- --------
Cash and cash equivalents 3,555,579 965,752
---------- --------
Cash flow sensitivity analysis for variable rate instruments
The Group's interest-bearing assets at the reporting date were
invested with financial institutions in the United Kingdom with a
S&P rating of A2 and comprised solely of bank accounts.
A change in interest rates would have increased/(decreased)
profit or loss by the amounts shown below. This analysis assumes
that all other variables remain constant. This analysis is
performed on the same basis for 2019.
Group: 2020 2019
Profit or loss Profit or loss
100 bp increase 100 bp decrease 100 bp increase 100 bp decrease
Variable rate instruments 35,555 (35,555) 9,658 (9,658)
---------------- ---------------- ---------------- ----------------
12. Related parties
Key management personnel
As at the year end, there are no key management personnel
employed by the Group in addition to the Directors.
Directors' remuneration and interests
The below remuneration relates to the Directors of the Group.
There is no other Key Management Personnel remuneration.
2020 Remuneration Interests
Director Cash-based Share-based Totals Shares Options
payments payments
GBP GBP GBP No. No.
Nigel Theobald (Chief
Executive Officer) 71,538 - 71,538 16,981,319 -
David Templeton 41,538 3,836 45,374 - 1,434,286
Luke Cairns 32,000 3,836 35,836 142,857 2,109,588
Christopher Britten 24,000 3,806 27,806 - 717,143
John Chiplin 24,000 3,806 27,806 - 717,143
193,076 15,284 208,360 17,124,176 4,978,160
=========== ============ ======== =========== ==========
2019 Remuneration Interests
Director Cash-based Share-based Totals Shares Options
payments payments
GBP GBP GBP No. No.
Nigel Theobald (Chief
Executive Officer) 70,000 - 70,000 16,981,319 -
Paul Titley (resigned
20 May 2019) 15,282 1,330 16,612 142,857 717,143
David Templeton 38,310 1,330 39,640 - 717,143
Luke Cairns 24,000 1,330 25,330 142,857 1,392,445
Christopher Britten
(appointed 20 May
2019) 14,923 2,329 17,252 - 717,143
John Chiplin (appointed
20 May 2019) 14,667 2,329 16,996 - 717,143
----------- ------------ -------- ----------- ----------
177,182 8,648 185,830 17,267,033 4,261,017
=========== ============ ======== =========== ==========
No contributions are paid by the Group to a pension scheme on
behalf of the Directors.
N4 Pharma PLC has a loan receivable from N4 Pharma UK Limited at
31 December 2020 of GBP3,659,000 (2019: GBP2,659,000). It is
repayable in December 2025 and interest is receivable at 5%.
Amounts owed to the Directors of the Group was nil at the
year-end (2019: GBP16,000).
There are no further related parties identified.
13. Subsequent events
There have been no material events subsequent to the
Consolidated Statement of Financial Position date that require
adjustment or disclosure in these Consolidated Financial
Statements.
, the news service of the London Stock Exchange. RNS is approved by
the Financial Conduct Authority to act as a Primary Information
Provider in the United Kingdom. Terms and conditions relating to
the use and distribution of this information may apply. For further
information, please contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR BLGDDLXDDGBX
(END) Dow Jones Newswires
February 24, 2021 02:00 ET (07:00 GMT)
N4 Pharma (LSE:N4P)
Historical Stock Chart
From Mar 2024 to Apr 2024
N4 Pharma (LSE:N4P)
Historical Stock Chart
From Apr 2023 to Apr 2024
