Registered number: 13472791
EQRX UK LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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EQRX UK LIMITED
REGISTERED NUMBER: 13472791
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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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 statement of income and retained earnings 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 on 6 February 2024.
The notes on pages 2 to 9 form part of these financial statements.
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EQRX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is EQRX UK LIMITED, Oak House, Tanshire Park, Shackleford Road, Elstead, GU8 6LB.
The principal activity of the company during the period was to provide support to the ultimate parent company whose activity was the research and development of medicine to enable lower cost availability
to oncology and immunology patients.
2.Accounting policies
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Basis of preparation of financial statements
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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 shortened their prior year reporting period from incorporation date of 23 June 2021 to 31 December 2021. As such the comparatives shown are not entirely comparable as the current reporting period reflects a full twelve months to 31 Decemeber 2022.
The following principal accounting policies have been applied:
Post year end the company has been purchased by a new parent company, Revolution Medicines, Inc., a company registered in Delaware, United States of America. The directors of the company have received assurances from the new parent entity that there are no plans to close the company down, but at the date of signing of the financial accounts, they are not aware of the full intentions of the parent company with regards to its future operations. At the date of signature of these accounts EQRX UK Limited continues to trade and receive support from the group. Therefore the directors continue to adopt the going concern basis of accounting in preparing the annual financial statements.
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Foreign currency translation
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Functional and presentation currency
The Company's functional currency is GBP and rounded to the nearest £.
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.
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EQRX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
Revenue represents income generated within the terms of the cost-plus agreement with the ultimate parent company.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company 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:
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
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EQRX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
Short-term debtors are measured at transaction price, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.
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.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
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EQRX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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Financial instruments (continued)
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Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of
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EQRX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
2.Accounting policies (continued)
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Financial instruments (continued)
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ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
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Cost of defined contribution scheme
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The average monthly number of employees, including directors, during the year was 8 (2021 - 5).
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Amounts owed by group undertakings
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Prepayments and accrued income
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Cash and cash equivalents
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EQRX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Allotted, called up and fully paid
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1 (2021 - 1) Ordinary shares share of £1.00
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Profit and loss account
The Profit & Loss account represents cumulative profits and losses.
The company operates a defined contribution plan for its employees. The pension cost charge represents
contributions payable by the company to the fund and amounted to £94,109 (2021: £4,750) for the year. Contributions totalling £10,548 (2021: £5,750) were payable to the fund at the balance sheet date and are included in creditors (note 7).
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Commitments under operating leases
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At 31 December 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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EQRX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
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Related party transactions
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The company has taken advantage of the exemption available under paragraph 33. 1A of FRS 102, whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertakings of the group.
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During the year, share options of 682,730 (2021 - 1,477,025) ordinary shares of $0.0001 per shares in the ultimate parent company, EQRx, Inc. were granted to senior staff members of EQRx UK Limited under the 2021 Stock Option and Incentive Plan. During the prior year a total of 1,430,000 share options were issued to senior members prior to the ultimate parent company undergoing a merger whereby these shares were converted from Legacy EQRx convertible preferred stock issued into shares of the ultimate parent company combined common stock using a merger conversion ratio of 0.627, leading to the 1,430,000 shares issued prior to the merger recalculated at 896,610 total shares options. In additon to this, one of the directors settled a total of 19,985 share options back to the ultimate parent company, EQRx, Inc. using the merger conversion ratio of 0.627, leading to 12,530 share options being settled during the prior year. EQRx UK Limited bared no cost in relation to this transaction. At the balance sheet date, a cumulative amount of 659,097 (2021 - 289,216) share options were vested in line with the share option agreement terms. No other shares options were exercised and modified during the year and there is no right to a cash alternative. The total number of share options in issue at the balance sheet date total 1,613,834.
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Post balance sheet events
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EGRX UK Limited was sold by its parent comany EQRX INC, a Delaware corporation, to Revolution Medicines, INC, a Delaware Corporation on the 31 July 2023.
The parent company is Revoluion Medicines, Inc, a company registered in the USA whose registered address is Saginaw Drive, Redwood City CA, 94063, United States. This company is also the ultimate controlling party. Copies of the financial statements for Revolution Medicines, Inc are available to the public and may be obtained from their registered address. Revolution Medicines, Inc is the largest and smallest company to consolidate these financial statements.
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EQRX UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
The auditors' report on the financial statements for the year ended 31 December 2022 was unqualified.
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In their report, the auditors emphasised the following matter without qualifying their report:
The auditor drew attention to note 2.2 in the financial statements, which states the company has a new parent entity after a company sale and that the new parent company does not intend to dissolve this company and will support it. The audtor has not seen sufficient evidence during their audit to verify this statement, but likewise nothing has been seen to suggest this is not the case. These events or
conditions, along with the other matters as set forth in note 2.2, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern.
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. The audit work has been undertaken so that Auditors' might state
to thecompany’s members those matters the Auditors' are required to state in an auditor’s report and
for noother purpose. To the fullest extent permitted by law, TWP Accounting LLP will not
accept or assumeresponsibility to anyone other than the company and the company’s members as a
body, for the auditwork, for the Independent Auditors' Report, or for the opinions formed
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The audit report was signed on 7 February 2024 by Paul Hawksley FCA MAAT CTA (Senior Statutory Auditor) on behalf of TWP Accounting LLP.
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