Registered number: 11893311
ELIEM THERAPEUTICS (UK) LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 31 DECEMBER 2023
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ELIEM THERAPEUTICS (UK) LIMITED
REGISTERED NUMBER: 11893311
BALANCE SHEET
AS AT 31 DECEMBER 2023
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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 comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 5 April 2024.
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Valerie Morisset
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The notes on pages 4 to 10 form part of these financial statements.
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ELIEM THERAPEUTICS (UK) LIMITED
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Shares issued during the year
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Payment to parent company for shares issued under option scheme
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Total transactions with owners
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The notes on pages 4 to 10 form part of these financial statements.
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ELIEM THERAPEUTICS (UK) LIMITED
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Shares issued during the year
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Payment to parent company for shares issued under option scheme
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Total transactions with owners
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The notes on pages 4 to 10 form part of these financial statements.
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ELIEM THERAPEUTICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Eliem Therapeutics (UK) Limited is a limited Company incorporated in the United Kingdom. The address of the registered office is 3rd Floor, 1 Ashley Road, Altrincham, Cheshire, WA14 2DT.
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 FRS 102 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland' and the requirements of the Companies Act 2006. 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 following principal accounting policies have been applied:
The directors have considered the going concern basis of preparation of the financial statements, noting the results for the year, forecasts and plans going forward.
The directors have prepared cash flow forecasts for a period of 12 months from the date of signing which demonstrate that, with the continued support of the parent undertaking, the company will have sufficient cash available for it to be able to continue as a going concern.
The directors have obtained a letter of support from the parent undertaking confirming their intention to continue supporting Eliem Therapeutics (UK) Limited for the foreseeable future. The directors are confident that the parent undertaking has sufficient resources available to enable it to fulfil its' commitment to support Eliem Therapeutics (UK) Limited for the foreseeable future.
The financial statements do not contain any adjustments that would be required if the company were not able to continue as a going concern.
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FOREIGN CURRENCY TRANSLATION
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Functional and presentation currency
The Company's functional and presentational currency is USD.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
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ELIEM THERAPEUTICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (CONTINUED)
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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.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Research and development costs are written off as they are incurred.
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 Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
Where share based payments are awarded to employees, the fair value of the options or restricted stock awards at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest.
Where the terms and conditions of awards are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is charged to profit or loss over the remaining service period.
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 corporation tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
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ELIEM THERAPEUTICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (CONTINUED)
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Contingent consideration in connection with the purchase price of the intangible asset outside of business combinations is recognised as a financial liability only when the consideration is contingent upon future events that are beyond Eliem Therapeutics (UK) Limited control. In cases where the payment of contingent consideration is within Eliem Therapeutics (UK) Limited control, the liability is recognised only as from the date when a non-contingent obligation arises. Contingent consideration linked to the purchase of individual assets primarily relates to future milestone payments in connection with in-licensed intellectual property in the Healthcare business sector.
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IMPAIRMENT OF FIXED ASSETS
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Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset, or cash-generating unit (CGU) to which the asset has been allocated, is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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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. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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ELIEM THERAPEUTICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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The average monthly number of employees, including directors, during the year was 21 (2022 - 24).
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CASH AND CASH EQUIVALENTS
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ELIEM THERAPEUTICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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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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Allotted, called up and fully paid
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600 (2022 - 500) Ordinary shares of £1.00 each
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On 22 December 2023, the company issued 100 Ordinary Shares for consideration of £2,556,669 ($3,235,413).
Share premium account
Includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium.
Other reserves
Represents the share based payments reserve as disclosed in note 10.
Profit and loss account
Includes all current and prior period retained profits and losses less any dividends paid.
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ELIEM THERAPEUTICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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The company has three stock based compensation schemes. One is an Option Incentive (EMI Option
Incentive Plan) the second being a Restricted Stock Purchase Agreement and the third being an
Unapproved Scheme. All three are share based schemes and the principal currency of the schemes is
USD ($).
Options are exercisable at a price equal to the estimated fair value of Eliem Therapeutics Inc’s stock on
the date of grant. The option vesting period is either (i) 25% on the first anniversary of the grant date
with the remainder vesting monthly over the following three years or (ii) monthly vesting over four years.
If the options remain unexercised after a period of ten years from the date of grant, the options expire.
Restricted stock awards are released over a 4 year period (with a one year cliff and then monthly
thereafter). Options and restricted stock awards are forfeited if the employee leaves the company before
the awards vest.
There were no option or restricted stock awards granted in the year.
Details of the share options and restricted stock awards outstanding during the year are as follows:
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Weighted
average
exercise
price (cents)
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Weighted
average
exercise
price (cents)
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Outstanding at the beginning of the year
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Forfeited during the year
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Exercised during the year
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Outstanding at the end of the year
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There were 611,373 (2022 - 531,158) options exercisable at the year end.
The fair value of the share options at the grant date was calculated using the Black Scholes model,
which is considered to be the most appropriate generally accepted valuation method of measuring fair
value. The fair value of the restricted stock awards is equal to the stock price on the date of grant. The
fair value of option and restricted awards is recognised over the requisite service period for each
separately vesting portion of the award (i.e., the "accelerated method").
Certain share-based payment awards are subject to provisions in which the vesting of these awards is
automatically accelerated upon the occurrence of events such as an involuntary termination in
connection with the reduction in force. Further, in connection with the implementation of the Company's
February 2023 restructuring plan and workforce reduction in October 2023, the Company modified the
terms of certain share-based payment awards for impacted employees including partial or full
acceleration of vesting of options and restricted stock awards upon separation and extension of exercise
periods for options post-separation.
As a result of: (i) the contractual acceleration and (ii) the discretionary modification of share-based
payment awards in connection with the February 2023 restructuring plan and workforce reduction in
October 2023, the Company recorded share-based compensation expense of $701,013 in the year.
A total share-based compensation charge of $1,820,199 (2022 - $3,356,807) has been made to the
Statement of Comprehensive Income in the year.
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ELIEM THERAPEUTICS (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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 $190,880 (2022 - $242,967). Contributions totalling $264,991 (2022 - $32,842) were payable to the fund at the balance sheet date and are included in creditors.
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COMMITMENTS UNDER OPERATING LEASES
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At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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The Company's ultimate and parent Company and controlling party is Eliem Therapeutics, Inc, a company incorporated in the United States of America.
The auditors' report on the financial statements for the year ended 31 December 2023 was unqualified.
The audit report was signed on 5 April 2024 by Andrew Booth (Senior Statutory Auditor) on behalf of Price Bailey LLP.
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