Registered number: 10908112
AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
DIRECTORS' REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
COMPANY INFORMATION
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E Eagling-Vose (resigned 31 March 2023)
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R Cohen (appointed 16 February 2023)
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K Stoddart (appointed 1 March 2024)
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James Cowper Kreston Audit
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Chartered Accountants and Statutory Auditor
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
CONTENTS
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Independent Auditor's Report
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Statement of Profit or Loss and Other Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The Directors present their report and the financial statements for the year ended 31 December 2023.
The Directors who served during the year were:
E Eagling-Vose (resigned 31 March 2023)
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R Cohen (appointed 16 February 2023)
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Directors' responsibilities statement
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The Directors are responsible for preparing the Directors' Report and the financial statements, in accordance with applicable law.
Company law requires the Directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.
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 Company and of the profit or loss of the Company for that period. In preparing the financial statements, the Directors are required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgements and estimates that are reasonable and prudent;
∙state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;
∙assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
∙use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
Disclosure of information to auditor
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Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the Director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Small companies' exemption note
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In preparing this report, the Directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
Page 1
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
On 22 January 2024, the Company drew down £650,000 from its existing loan facility.
On 15th February 2024, the Company received an additional loan note facility of £3,600,000 from the current investor.
On 21st February 2024, the Company drew down £260,000 from its existing loan facility.
On 19th March 2024, the Company drew down £480,000 from its existing loan facility.
The auditor, James Cowper Kreston Audit, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
Page 2
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
We have audited the financial statements of aVaxziPen Limited (formerly Enesi Pharma Limited) for the year ended 31 December 2023 which comprise the Statement of Profit or Loss and Other Comprehensive Income, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies set out on pages 11 - 17. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom.
In our opinion the financial statements:
∙give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its loss for the year then ended;
∙have been properly prepared in accordance with IFRSs as adopted by the United Kingdom; 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 Company 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.
Conclusions relating to going concern
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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 evaluation of the Directors assessment of the Company's ability to continue to adopt the going concern basis of accounting included:
The review and stress testing of cashflow forecasts and future funding plans.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
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.
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED) (CONTINUED)
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the and the Directors' Report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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:
∙adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
∙the financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of Directors remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors responsibilities statement on page 1, 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 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 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.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED) (CONTINUED)
The specific procedures for this engagement that we designed and performed to detect material misstatements in respect of irregularities, including fraud, were as follows:
∙Enquiry of management and those charged with governance around actual and potential litigation and claims;
∙Enquiry of management and those charged with governance to identify any material instances of non compliance with laws and regulations;
∙Reviewing minutes of meetings of those charged with governance;
∙Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
∙Performing audit work to address the risk of irregularities due to management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for evidence of bias.
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.
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.
Sue Staunton MA FCA CF (Senior Statutory Auditor)
for and on behalf of
James Cowper Kreston Audit
Chartered Accountants and Statutory Auditor
2 Chawley Park
Cumnor Hill
Oxford
Oxfordshire
OX2 9GG
21 March 2024
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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Total comprehensive income
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The notes on pages 11 to 27 form part of these financial statements.
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There was no other comprehensive income for 2023 (2022: nil).
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
REGISTERED NUMBER: 10908112
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
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Property, plant and equipment
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Trade and other receivables
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Cash and cash equivalents
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Trade and other liabilities
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Issued capital and reserves
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The financial statements on page 27 were approved and authorised for issue by the board of Director and were signed on its behalf by:
The notes on pages 11 to 27 form part of these financial statements.
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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Other comprehensive income
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Total comprehensive income for the year
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Total comprehensive income for the year
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Total contributions by and distributions to owners
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The notes on pages 11 to 27 form part of these financial statements.
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Page 8
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash flows from operating activities
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Depreciation of property, plant and equipment
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(Gain)/loss on sale of property, plant and equipment
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Movements in working capital:
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(Increase)/decrease in trade and other receivables
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Decrease in trade and other payables
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Increase in contract liabilities
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Cash generated from operations
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Net cash used in operating activities
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Cash flows from investing activities
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Purchases of property, plant and equipment
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Proceeds from disposal of property, plant and equipment
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Disposal of discontinued operation, net of cash disposed of
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Net cash used in investing activities
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Page 9
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
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Cash flows from financing activities
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Issue of convertible debt
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Net cash from financing activities
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Net decrease in cash and cash equivalents
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Cash and cash equivalents at the beginning of year
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Cash and cash equivalents at the end of the year
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The notes on pages 11 to 27 form part of these financial statements.
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies
These financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRS IC) 2006 issued and effective at the time of preparing these annual financial statements, in conformity with the requirement of the Companies Act. They were authorised for issue by the Company's Director.
Details of the Company's accounting policies, including changes during the period, are included in note 1.
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Company's accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The areas where judgements and estimates have been made in preparing the financial statements and their effect are disclosed in note 4.
Basis of measurement
The financial statements have been prepared on the historical cost basis, unless specified within these accounting policies, which are measured on an alternative basis on each reporting date.
Impact of new international reporting standards, amendments and interpretations
There have been no new international reporting standards, amendments and interpretations that have had a material impact on the Company for the year ended 31 December 2023.
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective:
Effective date 1st January 2024
Presentation of Financial Statements - Classification of liabilities as current or non-current (amendments to IAS 1)
Presentation of Financial Statements - non-current liabilities with covenants (IAS 1)
Lease Liability in a sale and leaseback
Effective date 1st January 2025
Lack of Exchangeability - Amendments to IAS 21
The Directors do not consider that these standards will have a material impact on the Company.
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. Revenue from providing services in the business to business market is recognised in the accounting period in which the services are rendered. Revenue is recognised on the stages of completion basis to complete the performance obligations. In the early stages of the contract, the Company may not be able to reasonably measure the outcome of a performance obligation but is expected to recover all costs incurred in satisfying the performance obligations. Under such conditions, the Company recognises revenue to the extent of the costs incurred until such time it can reasonably measure the outcome of the performance obligation.
Contracts with customers contain separate performance obligations. The transaction price is allocated to each performance obligation based on the stand-alone agreed selling prices.
Estimates of revenues, costs, or extent of progress towards completion of a performance obligation are revised if circumstances change. Any resulting changes in estimated revenues or costs are reflected in the Statement of Profit or Loss in the period in which the circumstances giving rise to the revisions become known by management.
The customer pays for services provided in accordance with set payment terms in contracts with customers. If the services rendered by the Company exceed the payment, a contract asset is recognised. If the payment exceed the services rendered a contract liability is recognised. There is no variable consideration included in the terms of contracts with customers. There are no impairment losses recognised on receivables arising from contracts with customers and no warranties offered on services provided.
All of the classes of the Company's share capital are classified as equity. Mandatorily redeemable preference shares are classified as liabilities. Incremental costs directly attributable to the issue of new share capital are shown as deductions, net of tax, from the proceeds.
Page 12
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
Grants are not recognised until there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.
Grants are recognised in profit or loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate. Specifically, grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the Statement of Financial Position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.
Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognised in profit or loss in the period in which they become receivable.
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Share-based payment transactions of the Company
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Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date.
The fair value determined at the grant date of the equity-settled share-based payments is expensed based on the Company's estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.
Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.
For cash-settled share-based payments, a liability is recognised for the goods or services acquired, measured initially at the fair value of the liability. At the end of each reporting period until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the year.
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
The financial statements have been prepared on the going concern basis, which assumes that the Company will continue in operations for the foreseeable future.
There was a loss for the year of £4,353,321 (2022: £4,943,760) and at the year end the Company had cash and cash equivalents of £265,535 (2022: £469,932). The Director has prepared forecasts and budgets for a period of 12 months from approval of the financial statements which take account of these circumstances and show the Company to be on progression for achievement of its objectives into 2024/2025.
At the balance sheet date the Company had a further £2,388,424 available to draw down from the consolidated redeemable loan note agreement. On 22 January 2024, 21 February 2024 and 19 March 2024, the Company drew down £650,000, £260,000 and £480,000 respectively from this existing loan facility and on 15 February 2024, the Company received a further loan note facility of £3,600,000 from the current investor.
The investor has also confirmed continuing support for the Company. The Director believes, therefore, that the Company has sufficient cash to fund its operations for at least 12 months beyond the date of signing these financial statements. Consequently, the Directors believes it is appropriate to adopt the going concern basis of accounting.
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Property, plant and equipment
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Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:
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15% - 33.33% straight line
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16.67% - 33.33% straight line
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Assets under construction
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
The Company leases property for the purposes of its operations. Lease terms contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor.
In accordance with IFRS 16, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use.
Assets and liabilities arising from a lease are initially measured on a present value basis. The net present value of the lease liability includes the present value of the lease payments not made at the date of transition, lease payments made before the commencement date less any lease incentives received and an estimate of the costs expected to be incurred in returning the leased property to its original condition. Lease payments to be made under reasonably certain extension options are included in the measurement of the liability.
The lease payments are discounted using the rate implicit in the lease agreement. If that rate cannot be readily determined, the lessee's incremental borrowing rate is used.
Lease payments are allocated between their principal payments and the finance cost. The finance cost is charged to the Statement of Profit or Loss over the lease period.
Right-of-use assets are depreciated over the life of the lease on a straight line basis.
Short term leases with a lease term of less than 12 months or leases with low value assets are recognised on a straight line basis as an expense in the Statement of Profit or Loss.
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
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Impairment of tangible and intangible assets
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At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible 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). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs of disposal 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.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease (see note 1.7).
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase (see note 1.7).
Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
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Trade and other receivables
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Trade receivables are recognised initially at fair value and subsequently held at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Company will not be able to collect all the amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of the estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the Statement of Comprehensive Income within administrative expenses.
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.Accounting policies (continued)
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Cash and cash equivalents
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Cash and cash equivalents include cash in hand, deposits held with banks, bank overdrafts and other short term highly liquid investments with original maturities less than 3 months. Short term liquid investments with a maturity of over three months would be included in a separate category, 'Short term liquidity investments'.
Trade payables are recognised initially at fair value and subsequently held at amortised cost using the effective interest rate method.
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Current and deferred income tax
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Income tax on the results for the period comprises current and deferred tax. Income tax is recognised in the Statement of Comprehensive Income in the period it relates to. Research and development tax credits are recognised on an accruals basis.
Research costs are written off to the Statement of Comprehensive Income in the period in which they are incurred. All research costs, whether funded by grant or not, are included within administrative expenses on the face of the Statement of Comprehensive Income. These research and development costs total £553,719 (2022: £1,501,145).
All ongoing development expenditure is currently expensed in the period in which it is incurred. Due to the regulatory and other uncertainties inherent in the development of the Company's programmes, the criteria for development costs to be recognised as an asset, as prescribed by IAS 38, "Intangible asset", are not met until the product has been submitted for regulatory approval, such approval has been received and it is probable that future economic benefits will flow to the Company. The Company does not currently have any such internal development costs that qualify for capitalisation as intangible assets.
The Company contributes to the funds of a defined contribution pension scheme and the pension charge represents the amounts payable by the Company to the fund in respect of the period.
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Cash and cash equivalents
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Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 90 days from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
aVaxziPen Limited (formerly Enesi Pharma Limited) (the 'Company') is a private limited company incorporated in the UK. The Company's registered office is at 120A&B Olympic Avenue, Milton Park, Abingdon, OX14 4SA. The Company's principal activity is that of research and development of natural sciences and engineering.
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Functional and presentation currency
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These financial statements are presented in pound sterling, which is the Company's functional currency. All amounts have been rounded to the nearest pound, unless otherwise indicated.
Page 17
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Accounting estimates and judgements
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Estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amount reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the period. However, the nature of estimation means that actual outcomes could differ from those estimates. The most significant judgements made in the preparation of the financial statements are as follows:
Revenue from contracts with customers
The Company makes an assessment of its future performance obligations and the extent to which the costs incurred represent the value attributable to revenue. Due to the early stage of contracts, there is some uncertainty as to the stage of progress towards satisfaction of the performance obligations.
Leases
The implementation of IFRS 16 requires the Company to account for its leases as right-of-use assets over the life of the lease agreement. The present value of the lease liability on inception requires management to assess various factors including the discount rate and the life of the lease and the extent to which any options to extend or break the lease are exercised. These factors have a resulting impact in determining the present value of the lease liability on inception.
Share-based payments
Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including expected life of the share option, fair value of the share price and the volatility. For the measurement of the fair value of equity settled share-based payments, the Company uses the Black-Scholes model.
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The following is an analysis of the Company's revenue for the year from continuing operations:
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Revenue expected to be recognised in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the year end is £364,197 (2021: £18,353).
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Government grants receivable
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Page 18
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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During the year, the Company obtained the following services from the Company's auditor:
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Fees payable to the Company's auditor for the audit of the Company's financial statements
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Employee benefit expenses
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Employee benefit expenses (including Directors) comprise:
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Defined contribution pension cost
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Key management personnel compensation
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, including the Director of the Company listed on page 1.
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Defined contribution scheme costs
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Page 19
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Average number of employees
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The average monthly number of persons (including Directors) employed by the Company during the period was:
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Information regarding the highest paid director is as follows:
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Emoluments (including share based payment)
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Pension contributions to defined contribution pension schemes
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Finance income and expense
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Recognised in profit or loss
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Net finance expense recognised in profit or loss
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Page 20
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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10.1 Income tax recognised in profit or loss
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Current tax on profits for the year
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Tax expense excluding tax on sale of discontinued operation and share of tax of equity accounted associates and joint ventures
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The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to losses for the year are as follows:
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Income tax credit/expense (including income tax on associate, joint venture and discontinued operations)
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Tax using the Company's domestic tax rate of 23.52% (2022:19%)
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Non-tax deductible amortisation of goodwill and impairment
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Expenses not deductible for tax purposes, other than goodwill, amortisation and impairment
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Utilisation of tax losses
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Rollover relief on profit on disposal of property, plant and equipment
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Higher rate taxes on overseas earnings
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Adjustments to tax charge in respect of prior periods
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Changes in tax rates and factors affecting the future tax charges
There are no factors that may affect future tax charges.
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10.2 Current tax assets and liabilities
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Page 21
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Property, plant and equipment
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Assets under construction
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Transfers between classes
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Transfers between classes
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Assets under construction £
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Accumulated depreciation and impairment
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Charge owned for the year
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Charge owned for the year
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The right-of-use asset relates to 120A&B Olympic Avenue, Milton Park, Oxfordshire.
During the year, the Company re-assessed the life of the lease and consequently revalued the right-of-use asset.
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Page 22
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Trade and other receivables
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Prepayments and accrued income
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Total trade and other receivables
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Financial assets measured at amortised cost comprise trade receivables and other receivables.
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Other payables - tax and social security payments
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Total current trade and other payables
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Financial liabilities measured at amortised cost comprise trade payables, other payables and accruals.
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Page 23
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Total loans and borrowings
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Financial liabilities measured at amortised cost comprises redeemable loan notes.
The carrying value of loans and borrowings classified as financial liabilities measured at amortised cost approximates fair value.
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A Ordinary shares of £0.000010 each
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Ordinary shares of £0.000010 each
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A Ordinary shares carry full voting rights and carry a right to receive dividends subject to the repayment of all loan notes of the Company. Ordinary shares carry voting rights but do not entitle the holder of Ordinary shares to dividends.
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Retained earnings
The retained earnings reserve includes current and prior period losses.
Page 24
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Arrangement of share option plan
All employees of the Company are eligible for options over ordinary shares in the Company. Options have been awarded under the Company's EMI Share Option Schemes (the EMI Schemes).
Options granted under the EMI Scheme have a fixed exercise price based on the market price at the date of grant which has been agreed with HMRC as being the appropriate market value for the purposes of granting options. The contractual life of the options is 10 years.
Options for main consultants have been awarded under the Company's Unapproved Share Option Scheme (the Unapproved Scheme) which have a fixed exercise price based on the market price at the date of grant which has been agreed with HMRC as being the appropriate market value for the purposes of granting options. The contractual life of the options is 10 years.
Share options held by Directors in the period are as follows:
Elizabeth Eagling-Vose held 25,000 options during the year ended 31 December 2023 which were all forfeited during the year.
All share options are in respect of Ordinary £0.00001 shares.
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Balance at the beginning of the year
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Exercised during the year
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Forfeited during the year
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The weighted average exercise price of all options is £0.000005 (2022: £0.000005).
The fair value of share options is determined using the Black-Scholes Model. The inputs into the Black-Scholes model are as follows:
Share price: £0.00001
Option price: £0.00001
Risk free rate: 0.33% - 1.32%
Term: 1.5 years to 10 years
Volatility: 25%
The total expense in respect of share options for the years ended 31 December 2023 and 31 December 2022 is not material to these financial statements and as such no charge has been recognised.
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The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £76,292 (2022: £75,803). The total contributions payable to the fund at the balance sheet date were £13,234 (2022: £12,261).
Page 25
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
At 31 December 2023, the Company had capital commitments totalling £nil (2022: £55,623).
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Ultimate controlling party
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The Company is controlled by Mr A T Rowlands as a result of his shareholdings.
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Notes supporting statement of cash flows
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Cash at bank available on demand
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Cash and cash equivalents in the statement of financial position
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Cash and cash equivalents in the statement of cash flows
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Financial instruments - risk management
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In common with other businesses, the Company is exposed to risks that arise from its use of financial instruments. The Company’s principal financial instruments are financial assets comprising trade and other receivables (excluding prepayments) and cash balances; and financial liabilities comprising trade payables. These are all measured at at amortised cost.
Exposure to credit, liquidity, currency and interest rate risks arise in the normal course of the Company’s business. The Company does not enter into derivative financial instruments.
Credit risk
The Company’s credit risk is primarily attributable to its credit sales. The Company does not consider the effect of expected credit losses to be material.
Liquidity risk
The Company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely. The interest rate exposure of the Company as at 31 December 2023 and the maturity profile of the carrying value of the Company’s financial liabilities are shown in note 13. All financial liabilities will be settled within twelve months unless stated in note 14. The Company’s policy is to ensure that it has sufficient cash to allow it to meet its liabilities. This risk is monitored by the Director via forecast cash flows and annual budgets.
Currency risk
The Company is exposed to translation and transaction foreign exchange risk arising because the Company has operations in more than one country. As such, the Company’s net assets arising from such overseas operations are exposed to currency risk resulting in gains or losses on retranslation into sterling.
Foreign exchange risks arise when the Company enters into transactions denominated in a currency other than their functional currency. Movements in exchange rates also affect the value of the Company’s foreign currency cash balances in the UK. Exchange rate movements during the year resulted in a gain of £17,324 (2022: loss of £3,381).
Page 26
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AVAXZIPEN LIMITED (FORMERLY ENESI PHARMA LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Interest rate risk
Interest rate risk arises on borrowings which are at fixed interest rates. Changes in rates could have the effect of either increasing or decreasing the Company's net loss. The Director does not consider the risk to be material to the financial statements as the Company only has loan notes with its shareholder and interest rates are fixed.
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Events after the reporting date
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On 22 January 2024, the Company drew down £650,000 from its existing loan facility.
On 15th February 2024, the Company received an additional loan note facility of £3,600,000 from the current investor.
On 21st February 2024, the Company drew down £260,000 from its existing loan facility.
On 19th March 2024, the Company drew down £480,000 from its existing loan facility.
Page 27
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