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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| N4 Pharma Plc | LSE:N4P | London | Ordinary Share | GB00BYW8QM32 | ORD 0.4P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.85 | 0.80 | 0.90 | 0.85 | 0.85 | 0.85 | 119,308 | 07:36:40 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Drug & Proprietary Stores | 0 | -1.03M | -0.0057 | -1.49 | 1.54M |
From Apr 2019 to Apr 2024
TIDMN4P
RNS Number : 8807Y
N4 Pharma PLC
14 May 2019
14 May 2019
N4 Pharma Plc
("N4 Pharma" or the "Company")
Final Results
N4 Pharma Plc (AIM: N4P), the specialist pharmaceutical company developing Nuvec(R), a novel delivery system for vaccines and cancer treatments, announces the Company's audited results for the year ended 31 December 2018.
Nigel Theobald, CEO of N4 Pharma commented:
"Nuvec is an exciting potential delivery system for cancer vaccines and therapeutics and the recent placing leaves the Company with sufficient funds to undertake further biology work to generate more evidence of this as part of its data set for future collaboration work and continue the relevant scale up work for the manufacturing of Nuvec(R).
"We announced in April that we had seen some inconsistent in vivo results compared to the initial in vivo studies and continued in vitro success and have put in place a plan of action to rectify this, so we can then continue with the efficacy work which we raised the funds for. The additional work we are doing at the University of Queensland will not have a material financial cost to the Company and is not expected to impact on our ability to undertake this required efficacy work with the funds recently raised. Whilst this has caused a delay to the efficacy work starting, we believe that the extra data from the University of Queensland will maximise the chances of successful future or repeat studies. These delays often occur in life sciences and there is no substitute for taking the time to ensure we are in the best position with the data available to us before progressing to the next phase.
"We also recognise that Nuvec(R) is now our core asset and, whilst this remains an exciting opportunity, the Board recognises it is prudent to investigate other potential assets. To this end the Board will be proactively exploring opportunities in parallel to the work being undertaken on Nuvec(R)."
Enquiries:
N4 Pharma Plc Nigel Theobald, CEO Via Scott PR Allenby Capital Limited Tel: +44(0)203 328 5656 James Reeve/Asha Chotai Scott PR Georgia Smith Tel: +44(0)1477 539 539
About N4 Pharma
N4 Pharma is a specialist pharmaceutical company developing a novel delivery system for vaccines and cancer 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 vaccines and cancer 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 of N4 Pharma UK Limited ("N4 UK") and N4 Biotech Limited ("N4 Biotech") which form the group (the "Group"). 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. N4 Biotech was originally formed as a potential vehicle to split the groups' activities between the Company's Nuvec(R) delivery system and its previous generics products but now remains dormant.
Review of operations for the financial year ended 31 December 2018
During the year to 31 December 2018, as anticipated, no revenue was generated by the Group. Other operating income included GBP72,832 of government grants.
The operating loss for the year was GBP1,417,089 (31 December 2017: GBP897,825 loss).
Throughout the year, GBP784,404 of new funds were raised through the exercise of warrants and a further GBP1.05m was raised post year end through the placing of 10,500,000 new ordinary shares (the "Placing"). In addition to the GBP793,141 of cash at the year end, the recent Placing sees the Company in a robust financial position in respect of its current work streams.
Key Operational Events and Opportunities
During the year, the Company completed a pilot human clinical trial to establish the pharmacokinetic profile ("PK") of its sildenafil reformulation, which unfortunately did not meet any of the PK endpoints for the target product profile. The results of this trial indicated that additional formulation development followed by further clinical testing was required.
The Board, having reviewed the full data report and considered the costs and time required to perform additional reformulation, determined that the risk reward profile to reformulate sildenafil to meet the required drug release profile, exemplified in the patent, would be too great. This result with sildenafil also had similar implications for other patents within the Company's generics portfolio, namely aprepitant and duloxetine. The Board, therefore, took the decision that it was in the best interest of the Company as well as its shareholders to focus the Company's ongoing efforts on Nuvec(R), a novel drug delivery system licenced from the University of Queensland. The Company subsequently stopped working on generating the required data needed to maintain the sildenafil and associated patents and handed back the licence to these patents to OPAL IP.
The decision to close the Generics division was made in the knowledge that Nuvec(R) had demonstrated promising results in relevant in vivo and in vitro models and had the potential to develop into a significant opportunity for the Company. The decision was therefore taken to focus available resources on this opportunity. Consequently, research with Nuvec(R) as a delivery system for DNA and mRNA based vaccines is continuing. A significant property of Nuvec(R) which is worth noting is that it acts as a natural adjuvant system, thereby removing the need to add additional adjuvants in the vaccine formulation process.
N4 Biotech was formed as a potential vehicle to split the groups' activities between its Nuvec(R) delivery system and its previous generics products. Since the closure of the generics division, this split is unnecessary so N4 Biotech will remain as dormant and will not be used.
The Company is continuing to confirm and extend the Nuvec(R) dataset and the post year end raise of additional funds will allow it to undertake further research on the efficacy of Nuvec(R) in both a virology and oncology setting with the aim of using this data to enable it to seek commercial pre-clinical collaborations with owners of DNA and mRNA sequences developing vaccines and cancer treatments.
In September 2018, the Board appointed Dr Allan Hey as Head of CMC Development and in November 2018 appointed Dr Melody Janssen as a Consultant to oversee the biological aspects of the Nuvec(R) research program.
The focus for the Company's Nuvec(R) delivery system continues to be on generating data which will enable the Company to engage commercially with pharmaceutical and biotech companies who are looking to utilise novel delivery systems, such as Nuvec(R), to improve the efficacy of their own DNA and mRNA vaccines that they have in development.
In order to build a strong case with which to engage with potential partners, the Board has regularly reviewed the data obtained in experimental studies conducted by both collaborators and
contract research organisations ("CROs") engaged by the Company. As part of that review, it has become clear that not only were there a number of variables between the studies (as determined by the collaborator or CRO) such as dosage, injection volume and source of antigen, but also the handling and preparation of Nuvec(R) may have differed materially from the original protocols used by the University of Queensland ("UQ") and then subsequently developed by N4 Pharma.
Consequently, the Directors have decided that, in order to maximise the chances of success for future or repeat studies, the methodology used in the original UQ's studies needs to be more extensively documented. This methodology will form the basis of the technical transfer to other collaborators and will ensure collaborators and CROs use a standard methodology with their subsequent work.
To that end, the Company has commissioned UQ to repeat its original studies to demonstrate repeated strong antibody response with the standard test antigen Ovalbumin ("OVA") and, in doing so, document extensively the preparation steps for Nuvec(R) prior to injection. This study at UQ will provide a validated testbed against which future enhancements can be benchmarked.
Subject to this work achieving the targeted in vivo efficacy, the program to add further efficacy data to our data package will recommence. As outlined above, the Directors believe that by reverting to the original source of Nuvec(R) and more completely defining UQ's preparation of Nuvec(R), it will greatly enhance the potential for success and understanding of comparable studies moving forward as well as assisting with potential collaboration opportunities in this significant market.
Despite the current setback with regard to the in vivo reproducibility of results, the in vitro results continue to show excellent results with DNA and mRNA antigens and fully support the potential of Nuvec(R) as a novel delivery system. The business model and potential for Nuvec(R) remains the same in that we aim to efficiently spend sufficient funds to develop our platform to the point where we can secure licence payments for the use of our delivery system and ultimately achieve royalties on any products developed using Nuvec(R).
Future Prospects
In the short to medium term, we will continue to focus our efforts on building a robust data set for Nuvec(R) which demonstrates its efficacy in a number of key non-clinical models. In addition, the safety profile of Nuvec(R) will be evaluated in appropriate non-clinical tests to confirm the known safe profile of mesoparticulate silica. Funds will also be utilised to move towards a good manufacturing practise ("GMP") ready manufacture ahead of clinical trials with partners, as and when needed.
In pharmaceutical Research & Development there is no quick fix or alternative to doing things in a methodical way and to the required standards to advance the product through key milestones towards a point of commercialisation or a deal with a partner. The Company is prioritising the key pieces of research it feels are required to advance its data and to enable it to seek such collaborations and will provide updates as each element completes.
In addition to completing the studies at UQ to confirm the original in vivo results and then extending the Nuvec(R) dataset, the board of directors will actively look to add or acquire additional assets to the Company's portfolio. These would ideally but not exclusively be in the same broad therapeutic area, with a view to developing a portfolio of options for development. The Board believes maintaining a portfolio of options will increase the Company's ability to maximise shareholder value.
The recent fundraising leaves the Company with a strong cash position to continue to develop the Nuvec(R) dataset and chemistry, manufacturing and controls ("CMC") scale up work, whilst looking for other opportunities to add to its portfolio.
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
David Templeton
Chairman
13 May 2019
Consolidated Statement of Comprehensive Income for the year ended 31 December 2018
Hot Features
Premium
Year ended Year ended
31 December 31 December
Notes 2018 2017
GBP GBP
------------------------------------ ------------------------------------
Government grant income 72,832 109,913
Gross Profit 72,832 109,913
Research and development
costs (846,176) (409,808)
General and administration
costs (643,745) (316,632)
Reorganisation costs - (281,298)
Operating loss for
the year (1,417,089) (897,825)
Deemed cost of acquisition - (1,023,734)
Finance expenditure (981) (5,299)
Gain on sale of investment 6 27,693 -
Loss for the year
before tax 4 (1,390,377) (1,926,858)
Taxation 5 205,534 89,874
Loss for the year
after tax (1,184,843) (1,836,984)
Other comprehensive
income net of tax - -
Total comprehensive
loss for the year
attributable to equity
owners of N4 Pharma
Plc (1,184,843) (1,836,984)
============================== ====== ==================================== ====================================
Loss per share attributable to owners of the
parent
Weighted average number of shares:
Basic 89,440,373 64,783,082
Diluted 91,305,287 65,811,509
Basic loss per share (1.32p) (1.26p)
Diluted loss per share (1.30p) (1.24p)
Consolidated Statement of Financial Position as at 31 December 2018
Notes 31 December 31 December
2018 2017
GBP GBP
-------------------------------------- --------------------------------------
Assets
Non-current assets
Investments 6 - -
------------------------ ------ -------------------------------------- --------------------------------------
- -
Current assets
Trade and other
receivables 7 276,926 132,700
Cash and cash
equivalents 793,141 1,326,272
1,070,067 1,458,972
Total Assets 1,070,067 1,458,972
------------------------ ------ -------------------------------------- --------------------------------------
Liabilities
Current liabilities
Trade and other
payables 8 (159,666) (143,788)
Accruals and deferred
income (30,457) (35,430)
------------------------ ------ -------------------------------------- --------------------------------------
(190,123) (179,218)
Total assets less
current liabilities 879,944 1,279,754
------------------------ ------ -------------------------------------- --------------------------------------
Non-current liabilities
Amounts falling due - -
after more than one
year
------------------------ ------ -------------------------------------- --------------------------------------
Net Assets 879,944 1,279,754
------------------------ ------ -------------------------------------- --------------------------------------
Equity
Share capital 10 8,634,675 8,579,396
Share premium 10 9,328,848 8,513,670
Share option reserve 10 81,909 147,635
Reverse acquisition
reserve (14,138,244) (14,138,244)
Merger reserve 279,347 299,045
Retained earnings (3,306,591) (2,121,748)
------------------------ ------ -------------------------------------- --------------------------------------
Total Equity 879,944 1,279,754
------------------------ ------ -------------------------------------- --------------------------------------
Consolidated Statement of Changes in Equity for the year ended 31 December 2018
(i) Year ended Share Share Share Option Reverse Merger Retained Total Equity
31 December Capital Premium Reserve Acquisition Reserve Earnings
2018 Reserve
GBP GBP GBP GBP GBP GBP GBP
----------- ------------ --------------- --------------- ---------- ------------- ------------------
Balance at 1
January 2018 8,579,396 8,513,670 147,635 (14,138,244) 299,045 (2,121,748) 1,279,754
Total
comprehensive
loss for
the year - - - - - (1,184,843) (1,184,843)
Share issue 55,279 815,178 - - (19,698) - 850,759
Share option
reserve - - (65,726) - - - (65,726)
----------- ------------ --------------- --------------- ---------- ------------- ------------------
At 31 December
2018 8,634,675 9,328,848 81,909 (14,138,244) 279,347 (3,306,591) 879,944
(ii) Year ended Share Share Premium Share Option Reverse Merger Reserve Retained Total Equity
31 December Capital Reserve Acquisition Earnings
2017 Reserve
GBP GBP GBP GBP GBP GBP GBP
----------- ------------------------ ------------------------ --------------- ------------------ -------------- -------------------
Balance at 1
January 2017 100 - - - - (284,764) (284,664)
Total
comprehensive
loss for
the year - - - - - (1,836,984) (1,836,984)
Share issue 8,561,253 8,643,010 - - - - 17,204,263
Cost of share
issue - (129,340) - - - - (129,340)
Share option
reserve - - 147,635 - - - 147,635
Group
Reconstruction 18,043 - - (14,138,244) 299,045 - (13,821,156)
At 31 December
2017 8,579,396 8,513,670 147,635 (14,138,244) 299,045 (2,121,748) 1,279,754
Consolidated Statement of Cash Flow for the year ended 31 December 2018
Year ended 31 Year ended 31 December
December 2018 2017
GBP GBP
-------------------------------------- --------------- --------------------------------
Operating activities
Loss before tax (1,390,377) (1,926,858)
Interest 981 5,299
Deemed cost of acquisition - 1,023,734
Share based payments to employees 629 -
Gain on sale of investments (27,693) -
Operating loss before changes
in working capital (1,416,460) (897,825)
Movements in working capital:
Increase in trade and other
receivables (9,266) (109,513)
Increase in trade, other payables
and accruals 10,905 56,538
Taxation 70,574 -
Cash used in operations (1,344,247) (950,800)
-------------------------------------- --------------- --------------------------------
Net cash flows used in operating
activities (1,344,247) (950,800)
-------------------------------------- --------------- --------------------------------
Investing activities
Cash acquired on reverse acquisition - 402,990
Sale of investments 6 27,693 -
Net cash flows from investing
activities 27,693 402,990
-------------------------------------- --------------- --------------------------------
Financing activities
Interest paid (981) (5,299)
Net proceeds of ordinary share
issue 784,404 1,988,970
Cost of share issue - (129,340)
Net cash flows from financing
activities 783,423 1,854,331
-------------------------------------- --------------- --------------------------------
Net (decrease)/ increase in
cash and cash equivalents (533,131) 1,306,521
Cash and cash equivalents
at beginning of the year 1,326,272 19,751
Cash and cash equivalents
at 31 December 793,141 1,326,272
Notes to the consolidated financial statements for the year ended 31 December 2018
1. Accounting policies 1.1 Reporting entity
N4 Pharma Plc (the "Company"), is the holding company for N4 Pharma UK Limited ("N4 UK"), and N4 Biotech Limited ("N4 Biotech"), and together form the group (the "Group"). 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 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 consolidated financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs"). The consolidated financial statements comply with the Companies Act 2006 and give a true and fair view of the state of affairs of the Group.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these consolidated financial statements.
1.2 Measurement convention
The consolidated financial statements are prepared on the historical cost basis, except for the following item in the consolidated statement of financial position and consolidated statement of comprehensive income:
-- 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).
-- Equity investments are measured at fair value.
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 both 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 2018 of GBP1,344,247 (2017: GBP950,800 outflow). At 31 December 2018, the Group had cash balances of GBP793,141 (2017: GBP1,326,272) and a surplus in net working capital (current assets, including cash, less current liabilities) of GBP879,944 (2017: GBP1,279,754).
On 14 February 2019 the group raised GBP1,050,000 from a share placing before expenses.
The Group continues to take steps to manage operational expenditure effectively and to manage the cash required for budgeted activities and working capital for at least 12 months from the date of approval of the consolidated financial statements. Close monitoring of current and forecast expenditure is undertaken by the board and key executive decisions discussed at monthly board meetings.
1.4 Basis of consolidation
On 3 May 2017, the Company became the legal parent of N4 UK through a reverse takeover transaction ("RTO" or "reverse takeover"). The Company was not a business as defined by IFRS 3 prior to the transaction and as such was outside of the scope of IFRS 3, Business Combinations. The consolidated financial statements comparatives present the substance of the transaction in accordance with IFRS2.
Transactions eliminated on 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 the income statement in the period in which they become receivable.
1.7 Expenses
Financing income and expenses
Financing expenses comprise interest payable and finance charges and net foreign exchange losses that are recognised in the consolidated statement of comprehensive income (see foreign currency accounting policy note 1.13). Financing income comprises interest receivable on funds invested and net foreign exchange gains.
Interest income and interest payable is recognised in the consolidated statement of comprehensive income as it accrues, using the effective interest method. Foreign currency gains and losses are reported on a net basis.
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 on 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 generating 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 and warrants 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 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's 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 equity investments recognised initially at cost and subsequently revalued to their fair value. Fair value is determined by reference to published price quotations in the AIM market. Gains and losses arising from changes in the fair value are recognised in profit or loss within other income or other expenses.
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 Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of the Group's entities at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the consolidated statement of financial position date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the consolidated statement of comprehensive income. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
1.14 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 profit or loss.
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.
1.15 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.
1.16 Adopted IFRS not yet applied
All new standards and amendments to standards and interpretations effective for annual periods beginning on or after 1 January 2018 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
-------------------- ------------------------------------------------------------------------------------ ----------
IAS 12 (Amendments) Income Tax Consequences of Dividends 1 January
2019
IAS 23 Borrowing Costs Eligible for Capitalisation 1 January
2019
IAS 28 Investment in Associates and Joint Ventures - Fair Value Measurement Clarification 1 January
& Long 2019
Term Interests
IFRS 3 (Amendments) Remeasurement of previously held interest for Business Combinations 1 January
2019
IFRS 9 (Amendments) Financial Instruments-Prepayment Features and Negative Compensation 1 January
2019
IFRS 16 Leases 1 January
2019
IAS 19 (Amendments) Plan amendment, Curtailment and Settlement 1 January
2019
IFRIC 23 Uncertainty over Income Tax Treatments 1 January
2019
N/A Amendments to References to the Conceptual Framework in IFRS Standards 1 January
2020
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 2019. It is not anticipated that amendments to IFRS 16, Leases, will have an impact on the financial statements given there are currently no lease agreements. Should any lease agreements arise the impact on the financial statements will be assessed.
1.17 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.
The key estimates and judgements surrounding the capitalisation of Research & Development expenditure is such that this 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.
2. Risk management
Overview
The Group has exposure to the following risks:
-- Credit risk; -- Liquidity risk; -- Tax risk; -- Market risk; and -- Operational 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.
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.
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.
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.
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.
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 4 (2017: 5). The directors of the Group are employed by N4 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
2018 2017
GBP GBP
Wages and Salaries 233,282 148,048
Social security costs 22,556 16,505
Pension costs 807 -
---------------------- ----------------------
256,645 164,553
4. Loss before tax
Year to 31 Year to 31
December 2018 December 2017
GBP GBP
Loss before taxation is arrived
after charging:
Deemed cost of listing - 1,023,734
Fees payable to the Group's auditors
for the audit
of the Group's financial statements 20,600 18,000
Other fees payable to auditors:
* Corporate finance services - 42,000
* Other assurance services 1,000 3,350
* Tax advisory services 3,550 7,875
5. Taxation
2018 2017
GBP GBP
Current tax
Research and development tax credit
receivable for the current period (222,066) (85,608)
Adjustments in respect of prior
periods 16,532 (4,266)
---------- -----------
(205,534) (89,874)
Deferred tax
Origination and reversal of temporary
differences - -
========== ===========
Tax in income statement (205,534) (89,874)
The tax charge for the year can be reconciled to the loss in the Consolidated Statement of Comprehensive Income as follows:
2018 2017
GBP GBP
Loss before taxation (1,390,377) (1,926,858)
------------ ------------
Tax at the UK corporation tax rate
of 19% (2017: 19%) (264,171) (366,103)
Expenses not deductible (5,320) 101,411
Deemed cost of acquisition - 194,509
Net Research and development tax
credits (96,406) (89,874)
Changes in unrecognized deferred
tax 143,831 67,904
Prior year adjustment 16,532 -
Effect of change in corporation tax
rate - 2,279
------------ ------------
Tax charge for the year (205,534) (89,874)
============ ============
At the year end the Group had trading losses carried forward of GBP1,257,239 (2017: GBP585,624) for use against future profits.
6. Investments
Inventory of securities
The RTO brought into the Group an investment in Alecto Minerals Plc ("Alecto") at a cost of GBP59,186 which could not be sold prior to completion of the RTO and as at 31 December 2017 formed part of the Group's assets. On 21 December 2016, trading in Alecto's shares on AIM was suspended due to a proposed reverse takeover.
Management had taken the view at 31 December 2017 that the Alecto shares no longer held any value and impaired the value of the shares to nil for the consolidated financial statements for the year ended 31 December 2017.
Subsequent to the year end 31 December 2017, Alecto was re-admitted onto the AIM market under the new name 'Cradle Arc'. As a result of the re-admission to the market, the Group redeemed the shares held in this investment and received GBP27,693 from the sale.
As at 31 December 2018, the Company held 1,388,889 Ferring warrants (2017: 1,388,889 warrants) and 542,233 Valirx warrants (2017: 542,233 warrants) which have no value as at the year end. These are legacy holdings from Onzima Plc prior to the RTO.
Investment in subsidiary
Company
2018 2017
Cost GBP GBP
Balance at 1 January 1,094,747 302,705
Additions 100 792,042
---------- ----------
Balance at 31 December 1,094,847 1,094,747
Details of the Company's subsidiaries at 31 December 2018 are as follows:
Place of incorporation Principal activity Proportion of
and operation ownership and
voting rights
held
delivery of
England and vaccines and
N4 Pharma UK Limited Wales therapeutics 100%
Wholesale of
England and pharmaceutical
N4 Biotech Limited Wales goods (dormant) 100%
The accounting reference date of the subsidiaries are co-terminus with that of the Company. The registered office of the subsidiaries are The Mills, Canal Street, Derby, DE1 2RJ.
7. Trade and other receivables
Group Group Company Company
2018 2017 2018 2017
GBP GBP GBP GBP
Prepayments 11,861 13,361 10,534 12,890
VAT receivable 42,998 3,388 6,002 3,388
Corporation tax debtor 220,568 85,608 - -
R&D expenditure credit 1,499 - - -
Loan interest receivable - - 103,960 32,352
Other debtors - 30,343 2,400 2,400
-------- -------- -------- --------
276,926 132,700 122,896 51,030
8. Trade and other payables
Group Group Company Company
2018 2017 2018 2017
GBP GBP GBP GBP
Trade creditors 113,093 79,462 4,844 1,888
Employee creditors 9,107 6,187 400 2,237
Loan due to directors 36,000 56,000 - -
Other creditors 1,466 2,139 - -
-------- -------- -------- --------
159,666 143,788 5,244 4,125
9. 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 unwound on a straight-line basis over the vesting
period based on the Group's estimate of the number of shares that
will vest and recognised as share premium. The value of the change
is adjusted to reflect the expected and actual levels of vesting.
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 were as follows:
2017 Options 2018 Options
Share price 6.375p Share price 6.6p
Exercise price 7p Exercise price 6.6p
Expected volatility 27.2% Expected volatility 45.2%
Expected option life 3 years Expected option 6.5 years
life
Risk-free rate 4.75% Risk-free rate 5.00%
As at 31 December 2018, there were 7,249,084 (2017: 6,245,084) options
in existence over ordinary shares of the Company allocated as follows:
Name Date of Ordinary Shares Expiry Date Exercise Price
Grant under option GBP
Gavin Burnell 14.10.15 2,701,210 14.10.25 0.028
Luke Cairns 14.10.15 675,302 14.10.25 0.028
Luke Cairns 03.05.17 717,143 03.05.20 0.07
David Templeton 03.05.17 717,143 03.05.20 0.07
Paul Titley 03.05.17 1,434,286 14.10.25 0.07
Andrew Leishman 26.09.18 286,857 26.09.28 0.066
Alan Hey 26.09.18 717,143 26.09.28 0.066
7,249,084
==================
The aggregate fair value of the share options issued on 14 October 2015 as at 31 December 2018 is GBP20,910 (2017: GBP23,988).
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.
The share options granted on 3 May 2017 are exercisable following the third anniversary of Admission, being 3 May 2020. In the case of Paul Titley, the exercise of options over 717,143 ordinary shares is subject to certain performance conditions. These options are exercisable at a price of 7 pence per share at any time before 14 October 2025.
The fair value of the share options issued on 3 May 2017 is GBP6,040 (2017: GBP23,962).
On 26 September 2018 a further 1,004,000 options over ordinary shares were granted under the Company's share option scheme to Andrew Leishman and Alan Hey, and are exercisable at a price of 6.60p per share.
The share options granted to Andrew Leishman lapsed subsequent to the year end 31 December 2018 due to his departure from the Company.
The total fair value of share options in issue and not yet exercised as at 31 December 2018 is GBP26,950 (2017: GBP47,950).
b) Warrants
As part of the Placing on 3 May 2017 which raised GBP1,500,000 before fees and expenses, the Company issued warrants on a 1 for 1 basis at an exercise price of 8.5p per warrant. This resulted in the issue of 21,428,571 warrants exercisable at 8.5p. The Company also issued warrants, exercisable at 8.5p, to the Company's brokers on the transaction lieu of fees (together, the "Placing Warrants"). This resulted in the total number of Placing Warrants in issue immediately following the Placing being 22,710,923.
The warrants entitle 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 is 3 May 2019.
Date of Grant Warrant Expiry Exercise Exercised Number of Remaining
balance Date Price Warrants Shares issued Warrants
at 1 January GBP (1:1) at 31 December
2018 2018
03.05.2017 20,282,351 03.05.2019 0.085 9,228,280 9,228,280 11,054,071
--------------- -------------- ----------- --------- ---------- --------------- ----------------
Date of Grant Warrants Expiry Exercise Exercised Number of Remaining
issued Date Price Warrants Shares issued Warrants
at 3 May GBP (1:1) at 31 December
2017 2017
03.05.2017 22,710,923 03.05.2019 0.085 2,428,572 2,428,572 20,282,351
--------------- ----------- ----------- --------- ---------- --------------- ----------------
During the year ended 31 December 2018 a total of 9,228,280, (2017: 2,428,572) of the warrants issued on 3 May 2017 were exercised.
During the year, an amount of GBP792,846 (2017: GBP424,714), representing the exercised warrants, has been recognised against share premium and GBP36,913 (2017: GBP21,714) to share capital. 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 2018 is GBP54,329 (2017: GBP99,685).
10. Capital and reserves
2018 2017
GBP GBP
90,962,537Ordinary Shares of 0.4p
each (2017: 77,142,857 Ordinary
Shares of 0.4p each) 363,850 308,571
137,674,431Deferred Shares of 0.4p
each (2017: 137,674,431 Deferred
Shares of 0.4p each) 5,506,977 5,506,977
279,176,540 Deferred Shares of
0.099p each (2017: 279,176,540
Deferred Shares of 0.099p each 2,763,848 2,763,848
---------- ----------
8,634,675 8,579,396
========== ==========
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 a further 9,228,280 ordinary shares were issued as a result of the exercise of warrants and 4,591,400 ordinary shares were issued as deferred consideration.
On his appointment to the board, and as part of the RTO, Nigel Theobald was issued with 4,591,400 deferred consideration shares. This formed part of the consideration to Mr Theobald as the remaining shareholder of N4 UK for the remaining 51% share capital. These shares have been allotted in the year to 31 December 2018 and as such increased the ordinary share capital.
The 137,674,431 deferred shares acquired as part of the reverse takeover as noted above, 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 the sum of GBP1,000,000 for each ordinary share held by them.
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.
11. Earnings per share
The calculation of basic loss per share at 31 December 2018 was based on the loss of GBP1,184,843 (2017: GBP1,836,984), and a weighted average number of ordinary shares outstanding of 89,440,373 (2017: 64,783,082), calculated as follows:
2018 2017
GBP GBP
Loss attributable to ordinary shareholders 1,184,843 1,836,984
Deemed cost of listing - (1,023,734)
----------- ------------
Adjusted losses attributable to ordinary shareholders 1,184,843 813,250
=========== ============
Weighted average number of ordinary shares
Issued ordinary shares at 1 January 64,783,082 100
Effect of shares issued during the year 24,657,291 64,782,982
----------- ------------
Weighted average number of shares at 31 December 89,440,373 64,783,082
=========== ============
2018 pence 2017 pence
per share per share
Basic loss per share (1.32) (1.26)
----------- -------------
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. The calculation of diluted loss per share at 31 December 2018 was based on the loss of GBP1,184,843 (31 December 2017: GBP1,836,984), and a weighted average number of ordinary shares outstanding of 91,305,287 (2017: 65,811,509).
2018 pence 2017 pence
per share per share
Diluted loss per share (1.30) (1.24)
----------- -----------
12. 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 GBP276,926 (2017: GBP132,700), 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 2018
Trade and other
payables 159,666 159,666 159,666 - -
========= ============ ========= ======== ===========
31 December 2017
Trade and other
payables 143,788 143,788 143,788 - -
========= ============ ========= ======== ===========
Company:
Financial liabilities Carrying Contractual 6 months 6-12 1 -2 years
amount cash flows or less months
GBP GBP GBP GBP GBP
31 December 2018
Trade and other
payables 5,244 5,244 5,244 - -
========= ============ ========= ======== ===========
31 December 2017
Trade and other
payables 4,125 4,125 4,125 - -
========= ============ ========= ======== ===========
(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:
2018 2017
GBP GBP
Variable rate instruments
Cash and cash equivalents 793,141 1,326,272
======== ==========
Carrying amount
Company:
2018 2017
GBP GBP
Variable rate instruments
Cash and cash equivalents 646,398 1,266,921
======== ==========
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 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, in particular foreign currency rates, remain constant. This analysis is performed on the same basis for 2017.
Group: 2018 2017
Profit or loss Profit or loss
100 bp increase 100 bp decrease 100 bp increase 100 bp decrease
Variable rate instruments 7,931 (7,931) 13,263 (13,263)
================ ================ ================ ================
Company: 2018 2017
Profit or loss Profit or loss
100 bp increase 100 bp decrease 100 bp increase 100 bp decrease
Variable rate instruments 6,464 (6,464) 12,669 (12,669)
================ ================ ================ ================
13. 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
2018 Remuneration Interests
Cash-based Share-based Shares Options
Director payments payments Totals
GBP GBP GBP No. No.
Nigel Theobald (Chief
Executive Officer) 70,000 - 70,000 16,846,633 -
Paul Titley 40,000 - 40,000 142,857 1,434,286
David Templeton 24,000 - 24,000 - 717,143
Luke Cairns 24,000 - 24,000 142,857 1,392,445
158,000 - 158,000 17,132,347 3,543,874
=========== ============ ========= =========== ==========
The above remuneration relates to N4 Pharma Plc (and N4 Pharma UK Limited) directors.
An amount of GBP36,000 (2017: GBP56,000) is payable to Nigel Theobald by N4 UK Limited. This forms part of the Trade and Other payables. Deferred consideration shares awarded to Nigel Theobald as part of the RTO were allotted during the year. This resulted in the issue of an additional 4,591,400 ordinary shares to Nigel Theobald.
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 2018 of GBP2,009,000 (2017: GBP809,000). It is repayable in February 2020 and interest is receivable at 5%.
There are no further related parties identified.
14. Subsequent events
A total of 10,500,000 Placing Shares at a price of 10p per Ordinary share were admitted to the London Stock Exchange on 14 February 2019. On admission, the Group's issued ordinary share capital consisted of 101,462,537 ordinary shares of 0.4p each with one vote per Ordinary Share. The placing of Shares raised GBP1.050 million before expenses.
Following the year ended 31 December 2018, Andrew Leishman ceased employment with N4 Pharma. As a result, the options issued to Mr Leishman in September 2018 as a result of his employment have now lapsed.
This information is provided by RNS, 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.
END
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