Relation Therapeutics Limited
Registered number: 12305953
Information for filing with
Registrar
For the year ended 31 December 2023
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12305953
31 December 2023
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RELATION THERAPEUTICS LIMITED
REGISTERED NUMBER: 12305953
STATEMENT OF FINANCIAL POSITION
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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Capital redemption reserve
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12305953
31 December 2023
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RELATION THERAPEUTICS LIMITED
REGISTERED NUMBER: 12305953
STATEMENT OF FINANCIAL POSITION (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 by:
The notes on pages 3 to 13 form part of these financial statements.
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12305953
31 December 2023
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RELATION THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Relation Therapeutics Limited (the 'Company') is a company limited by shares, registered in England and Wales. The Company's registered number is 12305953. The address of its registered office is 6th Floor One London Wall, London, United Kingdom, EC2Y 5EB.
Relation Therapeutics is an end-to-end biotech developing transformational medicines, with technology at its core. The Company’s ambition is to understand human biology in an unprecedented way; discovering therapies that will treat some of life's most devastating diseases. It leverages single-cell multi-omics directly from patient tissue, functional assays and machine learning to drive at disease understanding — from cause to cure. The Company’s Lab-in-the-Loop seamlessly integrates single-cell analysis, genomics and machine learning. It has developed powerful technologies which it applies to select druggable targets and develop transformational medicines.
Relation Therapeutics focused on diseases where its technology can add significant value, and looks for opportunities where there is a validated translational path to the clinic. It is rapidly advancing programmes in bone disease using insights from its technology and data, including its proprietary functional single-cell atlas, Osteomics.
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 preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The financial statements have been prepared in Pound Sterling as this is the currency of the primary economic environment which the Company operates and is rounded to the nearest pound.
The following principal accounting policies have been applied:
The financial statements are prepared on a going concern basis. The Company remains assured of the financial support provided by the parent company, Relation Therapeutics Inc. The directors have received confirmation that the parent company will support the Company and provide it with adequate funds when necessary to enable it to meet its debts as they fall due for a period of at least twelve months from the date of these financial statements. On this basis, the directors consider it appropriate to prepare the financial statements on a going concern basis.
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12305953
31 December 2023
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RELATION THERAPEUTICS 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 presentation 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.
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.
All other foreign exchange gains and losses are presented in the Statement of Comprehensive Income within ‘administrative expenses’.
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover 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 turnover is recognised:
Rendering of services
Turnover 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 turnover can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
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.
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12305953
31 December 2023
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RELATION THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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Interest payable and similar expenses
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Interest payable and similar expenses 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.
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 other creditors as a liability in the Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.
Where share options are awarded to employees, the fair value of the options 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 reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.
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12305953
31 December 2023
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RELATION THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting 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 reporting date.
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.
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.
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12305953
31 December 2023
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RELATION THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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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 are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable.
Financial assets
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is identified, an impairment loss is recognised in profit or loss.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and its recoverable amount, which is an estimate of the amount that the Company would receive for the asset if it were to be sold at the reporting date.
Financial liabilities
Basic financial liabilities, including trade and other payables are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a rate of interest.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payables are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost.
Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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12305953
31 December 2023
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RELATION THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Judgements in applying accounting policies and key sources of estimation uncertainty
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In applying the Company's accounting policies, the directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. The directors' judgements, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.
Critical judgements in applying the Company's accounting policies
The critical judgements that the directors have made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below.
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 the expected life of the share option or appreciation right, volatility and dividend yield and making assumptions about them. For the measurement of the fair value of equity-settled transactions with employees at the grant date, the Company uses a fair value measurement in accordance with IFRS 13.
Key sources of estimation uncertainty
The directors do not consider there to be any key sources of estimation uncertainty.
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The average monthly number of employees, including the directors, during the year was 43 (2022: 25).
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12305953
31 December 2023
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RELATION THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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At 1 January 2023 (as previously stated)
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At 1 January 2023 (as restated)
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At 1 January 2023 (as previously stated)
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At 1 January 2023 (as restated)
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At 31 December 2022 (as restated)
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During the year, the directors decided to restate the opening balances of computer equipment, office equipment and lab equipment due to amounts that had been incorrectly capitalised. The cost has decreased by £204,998 and other debtors has increased by £204,998. Depreciation has decreased by £16,625 and this has been credited by £16,625 in administrative expenses in the Statement of comprehensive income. The impact on the profit and loss and the net reserve position of the Company is that is has increased by £16,625.
During the year, the directors decided to reclassify the opening balances of computer equipment (cost of £193,694 and depreciation of £16,141) to lab equipment, as this more accurately reflects the nature of these items. This has had no impact on the profit or loss and the net reserve position of the Company.
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12305953
31 December 2023
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RELATION THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Debtors: Amounts falling due within one year
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During the year, the directors decided to restate prior year administrative expenses and prepayments due to an error in the prior year. This has increased administrative expenses by £38,701 and decreased prepayments by £38,701. The impact on the profit and loss and the net reserve position of the Company is a decrease of £38,701.
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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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Amounts owed to group undertakings are unsecured and interest free.
Amounts owed to group undertakings have been treated as a financial liability as the Company does not have an unconditional right to avoid paying this liability in cash.
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12305953
31 December 2023
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RELATION THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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Allotted, called up and fully paid
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1,371,729 (2022: 1,364,506) ordinary shares of £0.001 each
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The Company has one class of ordinary shares; each share carries one voting right per share but no right to fixed income.
On 3 July 2023, the Company issued 7,223 shares with a par value of £0.001 for a total consideration of £7,223,551.
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Share premium account
This reserve represents the amount above the nominal value received for issued share capital, less transaction costs.
Capital redemption reserve
This reserve represents the nominal value of owned shares that have been acquired in the Company and cancelled.
Other reserves
This reserve represents the fair value of options recognised as an expense. This remains as a separate component of equity.
Profit and loss account
This reserve represents the cumulative profits and losses of the Company.
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12305953
31 December 2023
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RELATION THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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The Company operates a share-based incentive program for its employees, offering options over shares in Relation Therapeutics Inc., its parent company. The share-based payment charged is allocated to the Company, as the employees it relates to are employed by it. The share-based payment charge for the year was £146,688 (restated 2022: £200,601).
The following table summarises the activity from 31 December 2021:
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Weighted
average
exercise
price
(cent)
2023
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Restated
Weighted
average
exercise
price
(cent)
2022
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RestatedNumber
31 December 2022
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Outstanding at the beginning of the year
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Granted during the period
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Forfeited during the year
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Exercised during the period
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Outstanding at the end of the year
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The directors have corrected a misstatement in the 2022 of the number of options granted in the year to 4,175,975 (previously stated: 3,588,275) and to correct the number of options forfeited in the prior year to nil (previously stated: 900,000).
The directors have also corrected the calculation of the fair value of options issued in 2022. The charge recognised is £200,601 (previously stated: £270).
The fair values of options granted under the program were calculated using the Black Scholes method as the fair value of services received could not be estimated reliably. The directors believe that the Black Scholes method provides the best estimate of the fair value of the equity instruments granted.
The fair value of the share options granted in the current and previous financial year were calculated using the Black Scholes method at the grant date. This is considered to be an appropriate method of calculating the fair value based on the information which was made available at the time of valuation.
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12305953
31 December 2023
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RELATION THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
During the year the directors identified adjustments that are required to correct prior year fixed assets, prepayments and share based payments. The net assets position of the Company for the year ended 31 December 2022 has decreased by £22,076 to £1,486,970. The impact on the profit and loss and the net reserve position of the Company is an increase of loss from £7,209,039 to £7,431,465.
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. Contributions totalling £nil (2022: £22,878) were payable to the fund at the reporting date and are included in other creditors.
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Related party transactions
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The Company is a wholly owned subsidiary of Relation Therapeutics Inc and has taken advantage of the exemption from disclosing related party transactions undertaken between wholly owned members of the group that have been concluded under normal market conditions.
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Post balance sheet events
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On 31 July 2024, the Company issued 27,000 shares with a par value of £0.001 for a total consideration of £27,000,000.
The immediate and ultimate parent company is Relation Therapeutics Inc, a company registered in the United States of America. The address of its registered office is The Manors of Inverrary, 4158 Inverrary Drive, Apt. 508, Building 4, Lauderhill, Florida, 33319.
The directors do not consider there to be an ultimate controlling party.
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