ACCOUNTS - Final Accounts preparation
ACCOUNTS - Final Accounts preparation
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Registered number:
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE PERIOD ENDED 31 DECEMBER 2019
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PRECISIONLIFE LTD
CHAIRMAN'S STATEMENT
FOR THE PERIOD ENDED 31 DECEMBER 2019
The chairman presents his statement for the period.
The company has made great progress over the last year in a number of areas and is now positioning itself to reap the rewards of this investment. At the end of last year, we successfully span out our animal health business Synomics Ltd and sold a majority stake to one of our existing investors, Wheatsheaf Group, which has provided a material injection of working capital into PrecisionLife alongside a significant minority equity stake and future royalty stream.
On our core human health business, while retaining a relatively low cost base, we have run 8 major disease studies in the last 6 months and are in the process of partnering several of these as joint ventures with commercial and academic partners. Multiple key opinion leaders have validated our results and this is backed up by direct biological testing results, which show us discovering very promising novel targets and drug compounds in areas of unmet medical need such as ALS. These are subject of interest from multiple major pharma and biotech companies in early-stage licensing of the resulting assets. The company will run a further 25 studies this year generating innovative and commercially compelling targets, drug candidates and patient stratification biomarkers for out-licensing. The company is relatively well-positioned to weather the situation with Covid-19, and moved early to a fully remote working status, which went very smoothly. Contingency plans are in place during the lockdown period and we are also investigating the governmental support (including loans) that might be available to us. We will use the hiatus in commercial activity caused by COVID-19 to place the company in an even stronger commercial position. We have recruited a Group Marketing Manager to significantly expand our commercial profile and drive business to our programs and platforms. We have started strategic marketing efforts to exploit some of the industry deals resources available to us to identify and present highly compelling propositions to prospects globally for our products and assets. The company is also actively engaged in discussions with US tech companies to expand the licensing of its platform technologies in the life science and healthcare space.
NameDr S P Gardner
Chairman
Date
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PRECISIONLIFE LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PRECISIONLIFE LTD
UNDER SECTION 449 OF THE COMPANIES ACT 2006
We have audited the financial statements of PrecisionLife Ltd (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 31 December 2019, which comprise , the Group and Company Balance sheets, the Group and Company Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
∙give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 December 2019 and of the Group's loss for the period then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of the disclosure in note 2.3 to the financial statements concerning the directors' use of the going concern basis of accounting in the preparation of the financial statements.
The group is currently loss making and its liabilities exceed its assets. The financial statements have been prepared on a going concern basis, the validity of which depends upon the success of the directors in raising additional funds from investors and/or from trading activities as described in note 2.3, which are inherently uncertain. The undertainty over these activities indicates the existence of a material uncertainty which may cast doubt on the Group's ability to continue as a going concern. The financial statements do not include adjustments that would be necessary if the Group was unable to continue as a going concern.
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
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PRECISIONLIFE LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PRECISIONLIFE LTD (CONTINUED)
UNDER SECTION 449 OF THE COMPANIES ACT 2006
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group strategic report and the Directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙the Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
As explained more fully in the Directors' responsibilities statement on page 2, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
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PRECISIONLIFE LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PRECISIONLIFE LTD (CONTINUED)
UNDER SECTION 449 OF THE COMPANIES ACT 2006
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's report.
This report is made solely to the Company's members in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants and Statutory Auditor
Reading Bridge House
George Street
Berkshire
RG1 8LS
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PRECISIONLIFE LTD
REGISTERED NUMBER: 08687703
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2019
The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the consolidated statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 11 to 19 form part of these financial statements.
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PRECISIONLIFE LTD
REGISTERED NUMBER: 08687703
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2019
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the consolidated statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 11 to 19 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2019
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2018
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2019
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2018
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PRECISIONLIFE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2019
Precisionlife Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Unit 8b Bankside, Hanborough Business Park, Long Hanborough, Witney, Oxon, OX29 8LJ.
The principal activity of the Company is that of engineering related scientific and technical consulting activities.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
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PRECISIONLIFE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2019
2.Accounting policies (continued)
Whilst it is too early to estimate what the full impact from COVID-19 will be on the Group's performance for the foreseeable future, the directors expect that COVID-19 will cause disruption to its business. However, at the year end, the Group has cash reserves of £1,319,436 (2018: £552,136) having made a loss for the year of £370,808 (2018: £1,660,786).
The directors have prepared forecasts and projections using what the directors to be reasonable assumptions relating to the Group's financial performance, current financial position and existing financial resources for a period of at least 12 months from signing of the financial statements which show the Group to be a going concern. The directors are also undertaking proactive measures to optimise working capital and preserve cash. In addition, the Group will also have additional actions available it is based on recent Government announcements regarding business rates, HMRC time to pay arrangements, VAT deferment, and other support which will provide a material working capital benefit to the group over the next 12 months. Based on the above, the directors are of the opinion that the going concern principle is applicable and that the Group has the necessary resources to continue as a going concern for the foreseeable future. The directors, however, recognise that the Group's projections include significant future licensing income and future fundraising both of which are expected, but neither of which are yet secured. These factors, coupled with the uncertainty over the duration and extent of the impact of COVID-19 represents a materially uncertainty which may cast significant doubt over the Group’s ability to continue as a going concern.
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PRECISIONLIFE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2019
2.Accounting policies (continued)
Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated statement of comprehensive income except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Consolidated statement of comprehensive income within 'other operating income'.
On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
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PRECISIONLIFE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2019
2.Accounting policies (continued)
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the Consolidated statement of comprehensive income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each Balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Group keeping the scheme open or the employee maintaining any contributions required by the scheme). Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to Consolidated statement of comprehensive income over the remaining vesting period. Where equity instruments are granted to persons other than employees, the Consolidated statement of comprehensive income is charged with fair value of goods and services received.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Consolidated statement of comprehensive income.
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PRECISIONLIFE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2019
2.Accounting policies (continued)
Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The proceeds received on issue of the Group's convertible debt are allocated into their liability and equity components and presented separately in the Balance sheet.
The amount initially attributed to the debt component equals the discounted cash flows using a market rate of interest that would be payable on a similar debt instrument that did not include an option to convert.
The difference between the net proceeds of the convertible debt and the amount allocated to the debt component is credited direct to equity and is not subsequently remeasured. On conversion, the debt and equity elements are credited to share capital and share premium as appropriate.
Transaction costs that relate to the issue of the instrument are allocated to the liability and equity components of the instrument in proportion to the allocation of proceeds.
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PRECISIONLIFE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2019
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements. The profit after tax of the parent Company for the period was £
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PRECISIONLIFE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2019
5.Tangible fixed assets (continued)
The audit report was signed on
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PRECISIONLIFE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2019
The convertible loan notes were issued on 15 November 2018.
The notes are convertible into Ordinary A shares of the Company at any time between the date of issue of the notes and their settlement date at the option of the holder. Interest of 20% per annum accrued until the settlement date thereafter 25%. The notes are convertible into Ordinary B shares of the Company at any time between the date of issue of the notes and their settlement date at the option of the holder. Interest of 10% per annum accrued until the settlement date thereafter 15%. The net proceeds received from the issue of the convertible loan notes have been split between the liability element and equity element, the latter representing the estimated fair value of the embedded option to convert the liability into equity of the Company.
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PRECISIONLIFE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2019
11.Share capital (continued)
Share based payment reserve
The share based payment reserve is the Company's accumulated charge in respect of share based payments recognised in the profit and loss. Equity reserve The equity reserve represents the equity component of the convertible loan notes.
In the opinion of the directors, there is not one controlling party.
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