Registered number: 08841562
CHAIN BIOTECHNOLOGY LIMITED
UNAUDITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 31 DECEMBER 2023
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CHAIN BIOTECHNOLOGY LIMITED
REGISTERED NUMBER: 08841562
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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Creditors: amounts falling due after more than one year
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Page 1
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CHAIN BIOTECHNOLOGY LIMITED
REGISTERED NUMBER: 08841562
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The directors consider that the Company is entitled to exemption from audit under section 477 of the Companies Act 2006 and members have not required the Company to obtain an audit for the year in question in accordance with section 476 of the Companies Act 2006.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
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 1 August 2024.
The notes on pages 4 to 12 form part of these financial statements.
Page 2
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CHAIN BIOTECHNOLOGY LIMITED
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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Shares issued during the year
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Comprehensive income for the year
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Shares issued during the year
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The notes on pages 4 to 12 form part of these financial statements.
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Page 3
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CHAIN BIOTECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Chain Biotechnology Limited is a private company limited by share capital, incorporated in England and Wales. The registered office is 2 Chawley Park, Cumnor Hill, Oxford, OX2 9GG.
The principal activity of the Company is microbiome therapeutics with a novel drug development platform.
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 Company has sufficient funds to continue operating for at least 8 months from the balance sheet date. As at the date of signature, the Company is in advanced discussions with potential investors and expects to receive further funding within the next 2 months, which will fund the Company until the end of 2025. Therefore, in the opinion of the directors, the Company will have adequate funding to continue operating for at least 12 months following the date of approval of the financial statements; as such, they have been prepared on a going concern basis.
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.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Page 4
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CHAIN BIOTECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Tangible fixed assets (continued)
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Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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.
The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liablities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
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.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of comprehensive income in the same period as the related expenditure.
Page 5
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CHAIN BIOTECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
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.
Interest income is recognised in profit or loss using the effective interest method.
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Provisions for liabilities
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Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Increases in provisions are generally charged as an expense to profit or loss.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
Page 6
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CHAIN BIOTECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. 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 balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Page 7
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CHAIN BIOTECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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The operating loss is stated after charging:
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Depreciation of tangible fixed assets
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The average monthly number of employees, including directors, during the year was 12 (2022 - 8).
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Charge for the year on owned assets
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Page 8
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CHAIN BIOTECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Prepayments and accrued income
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Other taxation and social security
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Accruals and deferred income
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Creditors: Amounts falling due after more than one year
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Page 9
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CHAIN BIOTECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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Page 10
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CHAIN BIOTECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Charged to profit or loss
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The deferred tax asset is made up as follows:
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Accelerated capital allowances
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Tax losses carried forward
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Short term timing differences
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Allotted, called up and fully paid
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1,704,568 (2022 - 1,068,849) Ordinary shares of £0.001 each
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On 2 June 2023, 93,921 and 541,798 A Ordinary shares of £0.001 each, were issued for total consideration of £94 and £1,349,904 respectively. Costs of £66,089 directly attributable to the share issue were posted to share premium.
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 £13,819 (2022 - £6,560) Contributions totalling £3,220 (2022 - £2,360) were payable to the fund at the balance sheet date and are included in creditors.
Page 11
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CHAIN BIOTECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Related party transactions
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During the year £28,145 (2022: £26,250) was charged to the company by non-executive directors; this charge is included in administrative expenses. £13,450 (2022: nil) was charged to the company by a consultant who is also a minority shareholder in the company.
During the year, new unapproved share options were granted to 2 non-executive directors. (2022: nil). At 31st December 2023, 2 non-executive directors (2022: 2) held unapproved share options in respect of ordinary shares of £0.001; one has an exercise price of £6.53 per share (2022: £6.53) and the other of £0.56 per share (2022: £4.17).
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The Chain Biotechnology Ltd Enterprise Management Incentive (EMI) Share Option Plan was established on 5th September 2016 for the benefit of certain eligible employees. The Board of Directors administers the Scheme and determines the persons to whom awards will be granted and the number of shares to be granted.
Options granted under the Scheme are exercisable into ordinary shares of Chain Biotechnology Ltd. Options granted vest and become exercisable on the sale of the Company where the option holder remains in employment with the Company, or within 89 days of leaving date if an eligible employee leaves the company. Options are non-transferable, and expire on 4th September 2026 if not exercised before that date.
New EMI share options were granted to 8 employees and directors during the year at an exercise price of £0.56 per share (2022: nil).
At 31 December 2023, 8 employees held EMI share options (2022:2).
The Company has also granted unapproved share options which are exercisable into ordinary shares of Chain Biotechnology Ltd. The Board of Directors administers the unapproved Scheme and determines the persons to whom awards will be granted and the number of shares to be granted. Options granted vest and become exercisable upon the occurrence of an Exit Event. Options are non-transferable, and expire on the 10th anniversary of the date of grant.
Options were granted to 3 people under the unapproved scheme during 2023 (2022: nil). 19,625 options were outstanding at 31 December 2023 (2022: 7,500).
At 31st December 2023, 3 individuals held share options under the unapproved Scheme (2022: 3).
No individual shareholder or group of shareholders are ‘Persons with Significant Control’ in relation to the Company.
Page 12
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