Company registration number 05132505 (England and Wales)
Helperby Therapeutics Group Limited
Annual Report and Financial Statements
For the year ended 31 December 2022
Helperby Therapeutics Group Limited
Contents
Page
Company Information
1
Directors' report
2 - 3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Group statement of comprehensive income
9
Group balance sheet
11
Company balance sheet
10
Group statement of changes in equity
12
Company statement of changes in equity
13
Notes to the financial statements
14 - 25
Helperby Therapeutics Group Limited
Company Information
- 1 -
Directors
Professor Sir Anthony Milnes Coates
Dennis Molnar
Patrick Mocatta
James Phipson
Secretary
DA Secretarial Limited
Company number
05132505
Registered office
66 Lincoln's Inn Fields
London
WC2A 3LH
Auditor
Gilberts Chartered Accountants
Pendragon House
65 London Road
St Albans
Hertfordshire
AL1 1LJ
Helperby Therapeutics Group Limited
Directors' Report
For the year ended 31 December 2022
- 2 -

The directors present their annual report and financial statements for the year ended 31 December 2022.

Principal activities

The principal activity of the company continued to be that of providing support to its subsidiary companies which are developing intellectual property.

Results and dividends

The results for the year are set out on page 6.

 

The majority of the group's products are still under development and not yet revenue generating. Total administrative expenses for the year increased to £593,995 from £433,914. The loss before tax for the year was £867,503 (2021 - £643,670), largely due to increased spending. At the year end, the group had cash and cash equivalents of £35,039 (2021 - £208,824) and net liabilities of £3,223,225(2021 - £3,099,915).

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Professor Sir Anthony Milnes Coates
Dennis Molnar
Patrick Mocatta
James Phipson
Auditor

The auditor, Gilberts Chartered Accountants, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Energy and carbon report

As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

Going Concern

The group's principal activity is developing intellectual property ("IP"). This IP is still in the research phase and the group will therefore continue to generate losses for the foreseeable future.

 

Management have produced cashflow forecasts for the twelve months from the approval of the financial statements and have determined that with current and future committed resources the group can continue to operate as a going concern . The future resources have been formally committed by a director and shareholder of the group and are necessary for the group to continue as a going concern.

 

The directors have satisfied themselves that the future committed resources are readily available to the group and on that basis, they have a reasonable expectation that the group and company can continue in operational existence for the foreseeable future. Although this expectation is reasonable the long term reliance on external funding coupled with the lack of clinical trials activity in the year ended 31 December 2022 does give rise to a level of uncertainty, and the going concern status of the group is contingent on the receipt of said funding.

Helperby Therapeutics Group Limited
Directors' Report (Continued)
For the year ended 31 December 2022
- 3 -
Small companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

On behalf of the board
James Phipson
Director
13 November 2023
Helperby Therapeutics Group Limited
Directors' Responsibilities Statement
For the year ended 31 December 2022
- 4 -

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Helperby Therapeutics Group Limited
Independent Auditor's Report
To the members of Helperby Therapeutics Group Limited
- 5 -
Opinion

We have audited the financial statements of Helperby Therapeutics Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity and notes to the financial statements, including 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:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, 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.

Material uncertainty related to going concern

We draw attention to Note 1.3 in the financial statements, the group incurred a net loss of £854,514 during the year ended 31 December 2022 and, as of that date, the group’s current liabilities exceeded its total assets by £933,074.

 

As stated in Note 1.3, these events or conditions, along with other matters as set forth in Note 1.3, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

 

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

Helperby Therapeutics Group Limited
Independent Auditor's Report (Continued)
To the members of Helperby Therapeutics Group Limited
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in 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:

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 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 parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Explanations as to what extent the audit is considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed in our approach below:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, UK taxation legislation and the regulations issued by the Financial Conduct Authority (FCA).
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We enquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations. There are inherent limitations in the audit procedures noted above, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance, miscellaneous receipt and payments testing, journal entry testing, analytical procedures and obtaining additional corroborative evidence as required. In doing so we evaluate whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
We recognise that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Helperby Therapeutics Group Limited
Independent Auditor's Report (Continued)
To the members of Helperby Therapeutics Group Limited
- 7 -
We communicated relevant key laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud and non-compliance with laws and regulations throughout the audit.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Luke Parker (Senior Statutory Auditor)
For and on behalf of Gilberts Chartered Accountants
Chartered Accountants
Pendragon House
65 London Road
St Albans
Hertfordshire
AL1 1LJ
13 November 2023
Helperby Therapeutics Group Limited
Group Profit And Loss Account
For the year ended 31 December 2022
- 8 -
2022
2021
Notes
£
£
Turnover
58,951
5,000
Cost of sales
(230,193)
(113,452)
Gross loss
(171,242)
(108,452)
Administrative expenses
(593,995)
(433,914)
Operating loss
(765,237)
(542,366)
Interest receivable and similar income
5
-
0
6
Interest payable and similar expenses
(102,266)
(101,310)
Loss before taxation
(867,503)
(643,670)
Tax on loss
6
12,989
19,924
Loss for the financial year
(854,514)
(623,746)
Loss for the financial year is attributable to:
- Owners of the parent company
(855,767)
(624,674)
- Non-controlling interests
1,253
928
(854,514)
(623,746)
Helperby Therapeutics Group Limited
Group Statement of Comprehensive Income
For the year ended 31 December 2022
- 9 -
2022
2021
£
£
Loss for the year
(854,514)
(623,746)
Other comprehensive income
Currency translation gain/(loss) taken to retained earnings
2,688
(162)
Total comprehensive income for the year
(851,826)
(623,908)
Total comprehensive income for the year is attributable to:
- Owners of the parent company
(853,079)
(624,836)
- Non-controlling interests
1,253
928
(851,826)
(623,908)
Helperby Therapeutics Group Limited
Company Balance Sheet
As at 31 December 2022
31 December 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Investments
8
321,170
321,170
Current assets
Debtors
10
24,774
22,704
Cash at bank and in hand
9,276
140,404
34,050
163,108
Creditors: amounts falling due within one year
11
(469,159)
(367,519)
Net current liabilities
(435,109)
(204,411)
Total assets less current liabilities
(113,939)
116,759
Creditors: amounts falling due after more than one year
13
(2,290,151)
(2,403,681)
Net liabilities
(2,404,090)
(2,286,922)
Capital and reserves
Called up share capital
15
231,134
228,996
Share premium account
19,725,030
18,998,652
Own shares
522,333
522,333
Profit and loss reserves
(22,882,587)
(22,036,903)
Total equity
(2,404,090)
(2,286,922)

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £845,684 (2021 - £426,898 loss).

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the board of directors and authorised for issue on 13 November 2023 and are signed on its behalf by:
13 November 2023
James Phipson
Director
Company registration number 05132505 (England and Wales)
Helperby Therapeutics Group Limited
Group Balance sheet
As at 31 December 2022
- 11 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
7
144
567
Current assets
Debtors
10
109,647
93,514
Cash at bank and in hand
35,039
208,824
144,686
302,338
Creditors: amounts falling due within one year
11
(1,077,904)
(999,139)
Net current liabilities
(933,218)
(696,801)
Total assets less current liabilities
(933,074)
(696,234)
Creditors: amounts falling due after more than one year
13
(2,290,151)
(2,403,681)
Net liabilities
(3,223,225)
(3,099,915)
Capital and reserves
Called up share capital
15
231,134
228,996
Share premium account
19,725,030
18,998,652
Own shares
522,333
522,333
Profit and loss reserves
(23,707,509)
(22,854,430)
Equity attributable to owners of the parent company
(3,229,012)
(3,104,449)
Non-controlling interests
5,787
4,534
(3,223,225)
(3,099,915)

These financial statements have been prepared in accordance with the provisions applicable to groups and companies subject to the small companies regime.

The financial statements were approved by the board of directors and authorised for issue on 13 November 2023 and are signed on its behalf by:
13 November 2023
James Phipson
Director
Helperby Therapeutics Group Limited
Group Statement of Changes in Equity
For the year ended 31 December 2022
- 12 -
Share capital
Share premium account
Own shares
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
£
£
Balance at 1 January 2021
228,594
18,839,056
522,333
(22,229,594)
(2,639,611)
3,606
(2,636,005)
Year ended 31 December 2021:
Loss for the year
-
-
-
(624,674)
(624,674)
928
(623,746)
Other comprehensive income:
-
Currency translation differences
-
-
-
(162)
(162)
-
(162)
Total comprehensive income for the year
-
-
-
(624,836)
(624,836)
928
(623,908)
Issue of share capital
15
402
159,596
-
-
159,998
-
159,998
Balance at 31 December 2021
228,996
18,998,652
522,333
(22,854,430)
(3,104,449)
4,534
(3,099,915)
Year ended 31 December 2022:
Loss for the year
-
-
-
(855,767)
(855,767)
1,253
(854,514)
Other comprehensive income:
Currency translation differences
-
-
-
2,688
2,688
-
2,688
Total comprehensive income for the year
-
-
-
(853,079)
(853,079)
1,253
(851,826)
Issue of share capital
15
2,138
726,378
-
-
728,516
-
728,516
Balance at 31 December 2022
231,134
19,725,030
522,333
(23,707,509)
(3,229,012)
5,787
(3,223,225)
Helperby Therapeutics Group Limited
Company Statement of Changes in Equity
For the year ended 31 December 2022
- 13 -
Share capital
Share premium account
Own shares
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2021
228,594
18,839,056
522,333
(21,610,005)
(2,020,022)
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
-
-
(426,898)
(426,898)
Issue of share capital
15
402
159,596
-
-
159,998
Balance at 31 December 2021
228,996
18,998,652
522,333
(22,036,903)
(2,286,922)
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
-
(845,684)
(845,684)
Issue of share capital
15
2,138
726,378
-
-
728,516
Balance at 31 December 2022
231,134
19,725,030
522,333
(22,882,587)
(2,404,090)
Helperby Therapeutics Group Limited
Notes to the Financial Statements
For the year ended 31 December 2022
- 14 -
1
Accounting policies
Company information

Helperby Therapeutics Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 66 Lincoln's Inn Fields, London, WC2A 3LH.

 

The group consists of Helperby Therapeutics Group Limited and all of its subsidiaries.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Helperby Therapeutics Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2022. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

1.3
Going concern

The group's principal activity is developing intellectual property ("IP"). This IP is still in the research phase and the group will therefore continue to generate losses for the foreseeable future.

 

Management have produced cashflow forecasts for the twelve months from the approval of the financial statements and have determined that with current and future committed resources the group can continue to operate as a going concern . The future resources have been formally committed by a director and shareholder of the group and are necessary for the group to continue as a going concern.

 

The directors have satisfied themselves that the future committed resources are readily available to the group and on that basis, they have a reasonable expectation that the group and company can continue in operational existence for the foreseeable future. Although this expectation is reasonable the long term reliance on external funding coupled with the limited clinical trials activity in the year ended 31 December 2022 does give rise to a level of uncertainty, and the going concern status of the group is contingent on the receipt of said funding.

Helperby Therapeutics Group Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
- 15 -
1.4
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

1.5
Research and development expenditure

Research and development expenditure is written off against profits in the year in which it is incurred.

1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Fixtures, fittings and equipment
15% reducing balance
Computer equipment
33% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.7
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.8
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Recoverable amount is the higher of fair value less costs to sell and value in use. 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 which the estimates of future cash flows have not been adjusted.

1.9
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks.

Helperby Therapeutics Group Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
- 16 -
1.10
Financial instruments

The group has elected to apply the provisions of Section 11 and Section 12 of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the group's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present fair value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

 

Basic financial liabilities

Basic financial liabilities, which include trade and other payables and bank loans, are initially measured at transaction price and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present fair value of the future receipts discounted at a market rate of interest.

1.11
Compound instruments

The component parts of compound instruments issued by the group are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity net of income tax effects and is not subsequently remeasured.

1.12
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.13
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Helperby Therapeutics Group Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
- 17 -
1.14
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.15
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes option pricing model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

 

The expense in relation to options over the parent company’s shares granted to employees of a subsidiary is recognised by the company as a capital contribution, and presented as an increase in the company’s investment in that subsidiary.

 

1.16
Grants received

Grants received are credited to deferred revenue. Grants towards capital expenditure are released to the profit and loss account over the expected useful life of the assets. Grants towards revenue expenditure are released to the profit and loss account as the related expenditure is incurred.

1.17
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Helperby Therapeutics Group Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
- 18 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Recognition of Research and Development expenditure

Corporation tax relief in respect of research and development tax credits is included in the income statement on the basis of the amount that the directors expect to receive in respect of the research and development expenditure incurred during the year. The balance due at the year end is disclosed in debtors.

Impairment of investments

The investments in subsidiary companies are included at cost. In the opinion of the directors the value of the group represents the value of the subsidiary companies which carry out the research and development activity of the group and therefore the directors believe that no impairment provision is necessary against the cost of these investments.

Convertible loan notes

The convertible loan notes are complex financial instruments and required to be recognised at fair value. In assessing the fair value of the loan, the directors have taken into account the likelihood of the loan noted being converted or repaid, the terms of repayment, the applicable interest rate and the expected rate of a comparable, non-convertible instrument. Following this, it is the directors judgement that the difference between the fair value of the loan note and the carrying value is not material.

3
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
19,400
18,899
4
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2022
2021
2022
2021
Number
Number
Number
Number
Total
3
3
-
0
-
0
Helperby Therapeutics Group Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
4
Employees
(Continued)
- 19 -

Their aggregate remuneration comprised:

Group
Company
2022
2021
2022
2021
£
£
£
£
Wages and salaries
23,678
25,557
-
0
-
0
Social security costs
2,388
2,838
-
-
Pension costs
126
126
-
0
-
0
26,192
28,521
-
0
-
0
5
Interest receivable and similar income
2022
2021
£
£
Other interest receivable and similar income
-
6
6
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
(12,989)
(16,676)
Foreign current tax on profits for the current period
-
0
115
Total current tax
(12,989)
(16,561)
Deferred tax
Origination and reversal of timing differences
-
0
(3,363)
Total tax credit
(12,989)
(19,924)

At 2022 the company had deferred tax assets of £314,388 (2021 - £165,831), calculated at a corporation tax rate of 19% (2021 - 19%). At 2022 the group had deferred tax assets of £4,648,673 (2021 - £4,375,163), calculated at a corporation tax rate 19% (2021 - 19%). The deferred tax assets are mainly in relation to tax losses carried forward and are not included in the financial statements because recovery is uncertain. The deferred tax assets may be recovered against future profits from the same trades.

Helperby Therapeutics Group Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
- 20 -
7
Tangible fixed assets
Group
Plant and machinery etc
£
Cost
At 1 January 2022 and 31 December 2022
15,928
Depreciation and impairment
At 1 January 2022
15,361
Depreciation charged in the year
423
At 31 December 2022
15,784
Carrying amount
At 31 December 2022
144
At 31 December 2021
567
The company had no tangible fixed assets at 31 December 2022 or 31 December 2021.
8
Fixed asset investments
Group
Company
2022
2021
2022
2021
£
£
£
£
Investment in subsidaries
-
0
-
0
321,170
321,170
Helperby Therapeutics Group Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
- 21 -
9
Subsidiaries

Details of the company's subsidiaries at 31 December 2022 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Helperby IP Development Limited*
England and Wales
Dormant
Ordinary
100.00
Helperby Management Limited*
England and Wales
Dormant
Ordinary
100.00
Helperby Therapeutics Limited
England and Wales
Development of intellectual property
Ordinary
100.00
Helperby Therapeutics Ireland Limited
Ireland
Development of intellectual property
Ordinary
100.00
Helperby Therapeutics USA Inc
USA
Development of intellectual property
Ordinary
95.67
Helperby Infection Control Limited
England and Wales
Development of intellectual property
Ordinary
100.00

The registered office of Helperby Therapeutics Limited, Helperby IP Development Limited and Helperby Management Limited is 66 Lincoln's Inn Fields, London, WC2A 3LH. The registered office of Helperby Therapeutics USA Inc is 1209 Orange Street, City of Wilmington 1989, County of New Castle, Delaware, USA. The registered office of Helperby Therapeutics Ireland Limited is 2 Grand Canal Square, Dublin 2,D02 A342, Ireland. The registered office of Helperby Infection Control Limited is c/o Dragon Argent Limited, 63, Bermondsey Street, London, SE1 3XF.

 

The companies marked with an asterisk are exempt from filing audited accounts under s394A of the Companies Act 2006 as they have been dormant throughout the period. Helperby Therapeutics USA Inc is exempt from filing audited accounts under the laws of the United States of America. Helperby Therapeutics Ireland Limited is exempt from filing audited accounts under the laws of Ireland.

10
Debtors
Group
Company
2022
2021
2022
2021
Amounts falling due within one year:
£
£
£
£
Corporation tax recoverable
13,550
16,676
-
0
-
0
Other debtors
69,729
53,260
24,774
22,704
83,279
69,936
24,774
22,704
Amounts falling due after more than one year:
Deferred tax asset
26,368
23,578
-
-
Total debtors
109,647
93,514
24,774
22,704
Helperby Therapeutics Group Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
- 22 -
11
Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
£
£
£
£
Trade creditors
129,336
155,802
-
0
-
0
Taxation and social security
687
702
-
0
-
0
Other creditors
947,881
842,635
469,159
367,519
1,077,904
999,139
469,159
367,519
12
Loans and overdrafts
Group
Company
2022
2021
2022
2021
£
£
£
£
Convertible loans
1,935,218
1,625,523
1,935,218
1,625,523
Other loans
123,544
610,578
123,544
610,578
2,058,762
2,236,101
2,058,762
2,236,101
Payable after one year
2,058,762
2,236,101
2,058,762
2,236,101

The long-term loans are secured by fixed charges over the intellectual property rights.

 

Included within long-term loans is a loan of £120,000 with 2% APR interest plus Barclays base rate from time to time. This is repayable within 3 months notice after the first 12 months. No notice had been issued as at 31/12/2022 and there is no expectation that this loan will be repayable within the next year.

 

The convertible loan notes have been accounted for as financial liabilities as the number of shares that will be converted in the future is variable. As such they do not meet the fixed for fixed condition and there is no equity component.

13
Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Convertible loans
14
405,082
1,625,523
405,082
1,625,523
Other creditors
1,885,069
778,158
1,885,069
778,158
2,290,151
2,403,681
2,290,151
2,403,681
Helperby Therapeutics Group Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
- 23 -
14
Convertible loan notes
Group
Company
2022
2021
2022
2021
£
£
£
£
Liability component of convertible loan notes
1,825,523
1,537,523
1,825,523
1,537,523
Interest on convertible loan notes
109,696
88,000
109,696
88,000
1,935,219
1,625,523
1,935,219
1,625,523

The loan notes, worth £400,000 disclosed in 2019 were issued on 25 September 2019. They are repayable either by cash or equity conversion on the date 36 months from the beginning of the agreement.

The loan notes, worth £1,100,000 disclosed in 2020 were issued on 16 July 2020 and 3 September 2020 at a nominal amount of £800,000 and £300,000 respectively, A further subscription deed of £200,000 was received on 23 June 2022.

The effective rate of interest is 8%. The interest payable on the convertible loan notes in the year was £109,696 (2021 - £88,000).

15
Share capital
Group and company
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and not fully paid
Ordinary Shares of 10p each
2,094,290
2,072,910
209,429
207,291
Orindary "B" shares of 10p each
216,550
216,550
21,655
21,655
Orindary "D" shares of 10p each
500
500
50
50
2,311,340
2,289,960
231,134
228,996

The ordinary shares and 'B' shares have full dividend and voting rights.

 

The 'D' shares shall be converted into ordinary shares automatically and immediately prior to a public offering on a recognised stock exchange or following the receipt by the holders of the 'D' shares of the written consent of a simple majority of the ordinary shareholders. The number of ordinary shares that the holders of the 'D' shares receive after conversion shall be calculated by determining the number they will need to hold in order to be the holders of 4% of the entire share capital of the company after conversion.

The called up share capital not fully paid totals £22,651 (2021 - £22,651). The called up share capital fully paid totals £208,483 (2021 - £206,345).

Shares issued during the year
During the year, the company issued 21,380 (2021 - 4,015) ordinary shares of 10p for a total consideration of £726,378 (2021 - £159,998) to provide additional working capital for the group.

Shares to be issued
Share capital to be issued relates to £522,333 (2021 - £522,333) of services rendered and for which payment is in the form of equity at a conversion rate of £29.30 per new ordinary share. This will result in the issue of 17,827 (2021 - 17,827) ordinary shares of 10p, with a share premium of £520,550 (2021 - £520,550).
Helperby Therapeutics Group Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
- 24 -
16
Share-based payment transactions

During the year 21,872 (2021 - nil) share options at a weighted average price of £29.3 (2021 - nil) lapsed. The number of share options outstanding at the year end is 105,000 (2021 - 126,872).

 

The fair value of the share options has been calculated using the Black-Scholes model. The assumptions used in the calculation of the fair value of the share options outstanding during the year are as follows:

 

Exercise Price            £24.60        £29.30        £39.85

Share Price at the date of grant    £7.38        £8.79        £11.93

Expected Volatility            50%        50%        50%            

Expected Life            5 years        5 years        5 years

 

The weighted average price in respect of the options subsisting at the year end was £31.71 (2021 - £30.57) per share with a weighted average life of 1.90 years (2021 - 2.92 years).

 

No share based payment charges arises from the share option scheme during the year (2021 - nil), as all options have already vested.

Group
Company
2022
2021
2022
2021
£
£
£
£
Liabilities at the period end
Arising from equity settled share based payment transactions
244,188
167,580
244,188
167,580

During the year consultancy services with a value of £76,608 (2021 - £167,580) were provided to Helperby Therapeutics Limited in exchange for the right to shares in Helperby Therapeutics Group Limited. The transactions have been recognised in the financial statements of both entities in accordance with section 26 of FRS 102.

 

17
Related party transactions
Transactions with
Amounts owed to
related parties
related parties
2022
2021
2022
2021
£
£
£
£
Group
Entities with control, joint control or significant influence over the group
(171,289)
(160,977)
-
75
Company director and shareholder
228,525
110,100
844,807
719,725
Company with close family member as director
132,047
12,861
123,544
628,799
Key management personnel
-
-
49,500
49,500

The group has taken advantage of the exemption available in FRS 102 whereby it has not disclosed transactions with any wholly owned subsidiary undertaking.

Helperby Therapeutics Group Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
- 25 -
18
Controlling party

In the opinion of the directors, there is no ultimate controlling party.

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