Caseware UK (AP4) 2023.0.135 2023.0.135 2023-12-312023-12-312023-12-31false2023-01-01falseNo description of principal activityfalsefalse 11234758 2023-01-01 2023-12-31 11234758 2022-01-01 2022-12-31 11234758 2023-12-31 11234758 2022-12-31 11234758 2022-01-01 11234758 1 2022-01-01 2022-12-31 11234758 2 2022-01-01 2022-12-31 11234758 1 2023-01-01 2023-12-31 11234758 e:CompanySecretary1 2023-01-01 2023-12-31 11234758 e:Director1 2023-01-01 2023-12-31 11234758 e:Director1 2023-12-31 11234758 e:Director2 2023-01-01 2023-12-31 11234758 e:Director2 2023-12-31 11234758 e:Director3 2023-01-01 2023-12-31 11234758 e:Director3 2023-12-31 11234758 e:Director4 2023-01-01 2023-12-31 11234758 e:Director4 2023-12-31 11234758 e:Director5 2023-01-01 2023-12-31 11234758 e:Director6 2023-01-01 2023-12-31 11234758 e:Director7 2023-01-01 2023-12-31 11234758 e:Director7 2023-12-31 11234758 e:Director8 2023-01-01 2023-12-31 11234758 e:Director8 2023-12-31 11234758 e:RegisteredOffice 2023-01-01 2023-12-31 11234758 d:Buildings d:LongLeaseholdAssets 2023-01-01 2023-12-31 11234758 d:PlantMachinery 2023-01-01 2023-12-31 11234758 d:FurnitureFittings 2023-01-01 2023-12-31 11234758 d:OfficeEquipment 2023-01-01 2023-12-31 11234758 d:CurrentFinancialInstruments 2023-12-31 11234758 d:CurrentFinancialInstruments 2022-12-31 11234758 d:Non-currentFinancialInstruments 2023-12-31 11234758 d:Non-currentFinancialInstruments 2022-12-31 11234758 d:Non-currentFinancialInstruments 1 2023-12-31 11234758 d:Non-currentFinancialInstruments 1 2022-12-31 11234758 d:CurrentFinancialInstruments d:WithinOneYear 2023-12-31 11234758 d:CurrentFinancialInstruments d:WithinOneYear 2022-12-31 11234758 d:Non-currentFinancialInstruments d:AfterOneYear 2023-12-31 11234758 d:Non-currentFinancialInstruments d:AfterOneYear 2022-12-31 11234758 d:ShareCapital 2023-01-01 2023-12-31 11234758 d:ShareCapital 2023-12-31 11234758 d:ShareCapital 2022-01-01 2022-12-31 11234758 d:ShareCapital 2022-12-31 11234758 d:ShareCapital 2022-01-01 11234758 d:ForeignCurrencyTranslationReserve 2023-01-01 2023-12-31 11234758 d:OtherMiscellaneousReserve 2023-01-01 2023-12-31 11234758 d:OtherMiscellaneousReserve 2023-12-31 11234758 d:OtherMiscellaneousReserve 2022-01-01 2022-12-31 11234758 d:OtherMiscellaneousReserve 2022-12-31 11234758 d:OtherMiscellaneousReserve 2022-01-01 11234758 d:OtherMiscellaneousReserve 1 2022-01-01 2022-12-31 11234758 d:OtherMiscellaneousReserve 2 2022-01-01 2022-12-31 11234758 d:RetainedEarningsAccumulatedLosses 2023-01-01 2023-12-31 11234758 d:RetainedEarningsAccumulatedLosses 2023-12-31 11234758 d:RetainedEarningsAccumulatedLosses 2022-01-01 2022-12-31 11234758 d:RetainedEarningsAccumulatedLosses 2022-12-31 11234758 d:RetainedEarningsAccumulatedLosses 2022-01-01 11234758 d:RetainedEarningsAccumulatedLosses 1 2022-01-01 2022-12-31 11234758 d:RetainedEarningsAccumulatedLosses 2 2022-01-01 2022-12-31 11234758 e:OrdinaryShareClass1 2023-01-01 2023-12-31 11234758 e:OrdinaryShareClass1 2023-12-31 11234758 e:OrdinaryShareClass1 2022-12-31 11234758 e:OrdinaryShareClass2 2023-01-01 2023-12-31 11234758 e:OrdinaryShareClass2 2023-12-31 11234758 e:OrdinaryShareClass3 2023-01-01 2023-12-31 11234758 e:OrdinaryShareClass3 2023-12-31 11234758 e:PreferenceShareClass1 2023-01-01 2023-12-31 11234758 e:PreferenceShareClass1 2023-12-31 11234758 e:PreferenceShareClass1 2022-12-31 11234758 e:FRS102 2023-01-01 2023-12-31 11234758 e:Audited 2023-01-01 2023-12-31 11234758 e:FullAccounts 2023-01-01 2023-12-31 11234758 e:PrivateLimitedCompanyLtd 2023-01-01 2023-12-31 11234758 d:Subsidiary1 2023-01-01 2023-12-31 11234758 d:Subsidiary1 1 2023-01-01 2023-12-31 11234758 d:Subsidiary2 2023-01-01 2023-12-31 11234758 d:Subsidiary2 1 2023-01-01 2023-12-31 11234758 e:Consolidated 2023-12-31 11234758 e:ConsolidatedGroupCompanyAccounts 2023-01-01 2023-12-31 11234758 2 2023-01-01 2023-12-31 11234758 4 2023-01-01 2023-12-31 11234758 6 2023-01-01 2023-12-31 11234758 d:ShareCapital 1 2022-01-01 2022-12-31 11234758 d:ShareCapital 2 2022-01-01 2022-12-31 11234758 f:PoundSterling 2023-01-01 2023-12-31 xbrli:shares iso4217:GBP xbrli:pure

Registered number: 11234758










MEDPHARM HOLDCO LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
MEDPHARM HOLDCO LIMITED
 
 
COMPANY INFORMATION


Directors
N Barras (resigned 17 January 2024)
M B Brown (resigned 17 January 2024)
P H Johnson (resigned 17 January 2024)
A G Muddle (resigned 17 January 2024)
D Parker 
T Wahlbrink 
E Hjerpe (appointed 27 June 2024)
P Walsh (appointed 31 October 2024)




Company secretary
P Walsh



Registered number
11234758



Registered office
Unit 3
Chancellor Court 50 Occam Road

Surrey Research Park

Guildford

GU2 7AB




Independent auditor
MHA
Statutory Auditors

6th Floor

2 London Wall Place

London

EC2Y 5AU





 
MEDPHARM HOLDCO LIMITED
 

CONTENTS



Page
Group strategic report
 
1 - 3
Directors' report
 
4 - 6
Independent auditor's report
 
7 - 10
Consolidated statement of comprehensive income
 
11
Consolidated statement of financial position
 
12 - 13
Company statement of financial position
 
14
Consolidated statement of changes in equity
 
15 - 16
Company statement of changes in equity
 
17 - 18
Consolidated statement of cash flows
 
19 - 20
Consolidated analysis of net debt
 
21
Notes to the financial statements
 
22 - 45


 
MEDPHARM HOLDCO LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The directors present the Strategic Report for the year ended 31 December 2023.
Medpharm Limited, the main trading company in the group (Medpharm) is a leading, global provider of contract topical and transdermal product design and formulation development services.
Medpharm has fully established R&D centres in the US and UK and GMP clinical manufacturing in the US and UK. Since establishment in 1999, Medpharm has partnered with a variety of high profile clients to develop and
deliver over 30 superior products to the market which are directly are directly benefiting patients with a wide variety of conditions.
Medpharm are experts at reducing risk and accelerating development times for generic and proprietary pharmaceutical customers through proprietary, industry-leading performance-testing models. Well established as a global leader in dermatology, nail, mucosal membrane and transdermal product development, Medpharm also offers innovative solutions for opthalmic and airway preparations. These solutions are recognised for their scientific rigour by regulators and investors.
Medpharm also holds patented technology based on the 'patch-in-a-can' concept - "MedSpray". MedSpray benefits patients by offering the possibility of long-term dosing of a product through the skin or mucosal membrane from a clear 'patch' conveniently applied as a spray from a can. It is applicable to a wide variety of products including those for curing infections or pain management. The unique dosing offers clients the opportunity to differentiate their product and potentially achieve premium pricing for extended effects. The technology is often applicable when clients are considering the life cycle management of established products.
Medpharm can support clients throughout the development process from initial API characterisation to clinical
manufacture. Importantly, Medpharm offers flexibility to deliver the parts of a client's development programme
which best fit with their requirements. Fundamentally, Medpharm will propose to clients the optimal program for
their current circumstances that maximises the change for achieving the desired outcome and efficiently
mitigates the risks associated with the project. Our strategy is aimed at leveraging and expanding the firm's
unique capabilities to continue to provide clients with outstanding service, enabling them to deliver outstanding
treatments for the ultimate consumer.

Business review
 
With a view to maintaining their standing in the market, Medpharm continued to invest in business development
and marketing capabilities. However, revenue declined from £18.7m in 2022 to £11.3m in 2023. The pipeline for
future revenue however remains strong.

Page 1

 
MEDPHARM HOLDCO LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Principal risks and uncertainties
 
The principal risks and uncertainties facing the company are discussed below:
Financial risk management
Credit risk
Medpharm is exposed to credit risk from credit sales. It is group policy that the credit risk of customers is assessed and to factor the information from the assessment into future dealings with customers, therefore mitigating the risk. Medpharm also requires significant upfront payments from customers to cover ongoing project costs and operates stringent credit control procedures across all group companies.
Liquidity risk
The group actively manages its finances by reviewing cashflows, performance against budget and the availability of working capital to ensure that it has sufficient available funds for its operations.
Interest rate risk
The group monitors all interest bearing assets and liabilities and their financial impact.
FX risk
The group is exposed to foreign exchange fluctuation risk through expanding activities with overseas customers. The company mitigates these risks by denominating contracts in stable currencies, monitoring foreign exchange movements and planning accordingly.
Market risk
The industry in which the group operate has experienced a sustained period of challenges, including the reduction of financing available to its customers and potential customers. The impact of this on the business is mitigated by aggressive management of the group's cost structure to ensure operations sufficient liquidity to maintain operations.
Operational risk management
Resourcing risk
Medpharm aims to be lean and as responsive to client demands as possible. Managing capacity and throughput
have always been key to achieving high profitability levels. However, with increasing success in targeting blue
chip clients, managing client agendas and balancing work schedules are even more critical to avoiding lost
throughput.
Project risk
There are inherent risks with all research projects, which are compounded by frequent changes in client
strategies, which can lead to early terminations of projects which show less favourable results. We aim to
mitigate these risks via contract terms and flexible scheduling wherever possible.
Management and staff risk
The business has expanded its senior management team, which helps mitigate the risks inherent in a rapidly
growing business and reduce reliance on a few key individuals. Employee engagement initiatives are being put
into place to improve staff retention and build a stable knowledge base, which should provide longer term
resilience.




 
Page 2

 
MEDPHARM HOLDCO LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Health and safety
The company conducts its business in a manner that protects the safety of those involved in its operations. The
company strives to prevent all accidents, incidents and occupational illnesses through its Health, Safety, Security
& Environment (HSSE) Management System. This is embedded into everyday work processes at all levels of the
organisation and addresses all aspects of managing safety and health, as well as security, environmental and
social risks at our facilities. The company is committed to continuous efforts to identify and eliminate or
management health and safety risks associated with its activities.

Financial key performance indicators
 
A range of Key Performance Indicators (KPIs) are used to monitor and manage the business and ensure focus
is maintained on the key priorities, outlined below:
        
31 December 2023 31 December 2022
Revenue       £11,296,451   £18,676,309
(Loss)/profit before tax     (£12,051,273)  (£16,694,270)
Working capital (net current (liabilities)/assets) (£7,291,826)   (£4,122,650)


This report was approved by the board and signed on its behalf.



T Wahlbrink
Director

Date: 11 April 2025

Page 3

 
MEDPHARM HOLDCO 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.

Directors' responsibilities statement

The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The loss for the year, after taxation, amounted to £12,412,039 (2022 - loss £16,623,609).

No dividends were paid during the year. The directors do not recommend payment of a final dividend.

Directors

The directors who served during the year were:

N Barras (resigned 17 January 2024)
M B Brown (resigned 17 January 2024)
P H Johnson (resigned 17 January 2024)
A G Muddle (resigned 17 January 2024)
D Parker 
T Wahlbrink 

Page 4

 
MEDPHARM HOLDCO LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Future developments

In parallel with fee for service for our clients as outlined above, Medpharm is constantly looking for opportunities
to develop new formulation and drug delivery technologies which enhance clients' products, provide clinical
benefits for patients and meet the increasingly stringent requirements of regulatory authorities.
Medpharm believes that current services can be more broadly deployed to improve the lives of an even wider
group of consumers and to do so we need to communicate with a broader market and clearly demonstrate
tangible benefits to potential clients, emphasising our top-quality, rapid and low risk development propositions.
Additional investments to expand capacity are in progress and complimentary acquisitions will be sought where
significant synergies exist.

Going concern

The financial statements have been prepared assuming the group will continue as a going concern. The going concern assumption contemplates the realisation of assets and satisfaction of liabilities in the normal course of business. However, the industry in which the group operates has experienced a prolonged downturn, which has resulted in many of the group’s customers facing financial challenges. As such, the group experienced a significant decline in turnover in recent years culminating in the generation of an operating loss of £9,909,195 in 2023. In response, in 2024, the wider group undertook multiple refinancing transactions in order to fund its operations. In addition, the group merged with Tergus Pharma Inc., a similarly sized, US-based contract development and manufacturing organization (CDMO) that also focused on topical and transdermal pharmaceuticals. As a result of the merger with Tergus and the expansion opportunities afforded by the combined businesses, the Group required additional funding to continue its operations and finance growth initiatives.
In April 2025, the group was refinanced by its existing shareholder group. The refinancing included US$11.9
million of new equity financing, US$3.0 million of which was used to reduce the third-party debt obligations of the
group. This financing, in combination with additional equity investments made in late 2024 and early 2025, bring
the total recent financing efforts of the group to US$18.0 million. The directors of the group continue to explore
other strategies that will help ensure continued operations, including incremental cost reductions, expansion of
its offerings to new end-markets and geographies, and the merger or acquisition of other companies in the industry. All such things taken into consideration allows the directors to conclude that, the group shall have the necessary liquidity to conduct normal operations through a date twelve months beyond the date of these
ifinancial statements. Accordingly, the financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the group were unable to continue as a going concern.

Qualifying third party indemnity provisions

The Group has made qualifying third party indemnity provisions for the benefit of its directors during the year.
These provisions remain in force at the reporting date.

Disclosure of information to auditor

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 and the Group'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 and the Group's auditor is aware of that information.

Page 5

 
MEDPHARM HOLDCO LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Post balance sheet events

The wider Medpharm group has undergone significant restructuring since the balance sheet date, as outlined in
note 32 to the financial statements.

Auditor

The auditor previously traded through the legal entity MacIntyre Hudson LLP. In response to regulatory changes, MacIntyre Hudson LLP ceased to hold an audit registration with engagement transitioning to MHA Audit Services LLP. MHA 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.
 





T Wahlbrink
Director

Date: 11 April 2025

Page 6

 
MEDPHARM HOLDCO LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MEDPHARM HOLDCO LIMITED
 

Opinion


We have audited the financial statements of Medpharm Holdco Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated statement of comprehensive income, the Consolidated statement of financial position, the Company statement of financial position, the Consolidated statement of cash flows, the Consolidated statement of changes in equity, the Company statement of changes in equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 December 2023 and of the Group's loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


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 Group 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


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.


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 Group's or the parent 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.


Page 7

 
MEDPHARM HOLDCO LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MEDPHARM HOLDCO LIMITED (CONTINUED)


Other information


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 ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Group strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Group strategic report and the Directors' report have 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company 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.


Page 8

 
MEDPHARM HOLDCO LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MEDPHARM HOLDCO LIMITED (CONTINUED)


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 4, 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 Group's and the parent 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 Group or the parent 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 Group financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
 
Enquiry of management and those charged with governance around actual and potential litigation claims;
Performing audit work over the risk of 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 bias;
Reviewing minutes of meetings for those changes with governance; and
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
 

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.


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.


Page 9

 
MEDPHARM HOLDCO LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MEDPHARM HOLDCO LIMITED (CONTINUED)


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 2006Our 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.





Stephen Poleykett BA (Hons) FCA (Senior statutory auditor)
  
for and on behalf of
MHA
 
Statutory Auditors
  
London, United Kingdom

11 April 2025
MHA is the trading name of MHA Audit Services LLP, a limited liability partnership in England and Wales (registered number OC455542).
Page 10

 
MEDPHARM HOLDCO LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

As restated
2023
2022
Note
£
£

  

Turnover
 4 
11,296,451
18,676,309

Cost of sales
  
(5,355,702)
(7,601,179)

Gross profit
  
5,940,749
11,075,130

Administrative expenses
  
(13,513,664)
(16,088,924)

Exceptional administrative expenses
 13 
(2,347,537)
(10,515,367)

Other operating income
 5 
11,257
555,190

Operating loss
 6 
(9,909,195)
(14,973,971)

Interest receivable and similar income
 10 
4,670
1,270

Interest payable and similar expenses
 11 
(2,146,748)
(1,721,569)

Loss before taxation
  
(12,051,273)
(16,694,270)

Tax on loss
 12 
(360,766)
70,661

Loss for the financial year
  
(12,412,039)
(16,623,609)

  

Currency translation differences
  
(37,106)
197,174

Other comprehensive income for the year
  
(37,106)
197,174

Total comprehensive income for the year
  
(12,449,145)
(16,426,435)

(Loss) for the year attributable to:
  

Owners of the parent Company
  
(12,412,039)
(16,623,609)

  
(12,412,039)
(16,623,609)

The notes on pages 22 to 45 form part of these financial statements.

Page 11

 
MEDPHARM HOLDCO LIMITED
REGISTERED NUMBER: 11234758

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

As restated
2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 16 
9,106,268
10,262,960

  
9,106,268
10,262,960

Current assets
  

Stocks
 18 
79,973
108,583

Debtors: amounts falling due within one year
 19 
6,948,209
6,468,816

Cash at bank and in hand
 20 
1,080,268
1,363,707

  
8,108,450
7,941,106

Creditors: amounts falling due within one year
 21 
(15,400,276)
(12,063,756)

Net current liabilities
  
 
 
(7,291,826)
 
 
(4,122,650)

Total assets less current liabilities
  
1,814,442
6,140,310

Creditors: amounts falling due after more than one year
 22 
(19,711,240)
(18,216,773)

Provisions for liabilities
  

Deferred taxation
 24 
(729,041)
(798,672)

Other provisions
 25 
(2,347,537)
-

  
 
 
(3,076,578)
 
 
(798,672)

Net liabilities
  
(20,973,376)
(12,875,135)


Capital and reserves
  

Called up share capital 
 26 
14,857,027
10,500,000

Foreign exchange reserve
 27 
(6,123)
-

Share based payment reserve
 27 
-
1,136,120

Profit and loss account
 27 
(35,824,280)
(24,511,255)

Equity attributable to owners of the parent Company
  
(20,973,376)
(12,875,135)


Page 12

 
MEDPHARM HOLDCO LIMITED
REGISTERED NUMBER: 11234758
    
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023

The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




T Wahlbrink
Director

Date: 11 April 2025

The notes on pages 22 to 45 form part of these financial statements.

Page 13

 
MEDPHARM HOLDCO LIMITED
REGISTERED NUMBER: 11234758

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

As restated
2023
2022
Note
£
£

Fixed assets
  

Investments
 17 
1
7,982,344

  
1
7,982,344

Current assets
  

Debtors: amounts falling due within one year
 19 
4,150,884
1,609,745

  
4,150,884
1,609,745

Creditors: amounts falling due within one year
 21 
-
(3,308,637)

Net current assets/(liabilities)
  
 
 
4,150,884
 
 
(1,698,892)

Total assets less current liabilities
  
4,150,885
6,283,452

  

Creditors: amounts falling due after more than one year
 22 
(19,711,240)
(18,210,139)

  

Net liabilities
  
(15,560,355)
(11,926,687)


Capital and reserves
  

Called up share capital 
 26 
14,857,027
10,500,000

Share based payment reserve
 27 
-
1,136,120

Profit and loss account
 27 
(30,417,382)
(23,562,807)

  
(15,560,355)
(11,926,687)


The loss of the parent company in the year was £7,990,695 (2022 - £19,780,965).
The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


T Wahlbrink
Director

Date: 11 April 2025

The notes on pages 22 to 45 form part of these financial statements.

Page 14

 
MEDPHARM HOLDCO LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Foreign exchange reserve
Other reserves
Profit and loss account
Total equity

£
£
£
£
£

At 1 January 2023 as restated
10,500,000
-
1,136,120
(24,511,255)
(12,875,135)


Comprehensive income for the year

Loss for the year

-
-
-
(12,412,039)
(12,412,039)

Currency translation differences
-
-
-
(37,106)
(37,106)


Other comprehensive income for the year
-
-
-
(37,106)
(37,106)


Total comprehensive income for the year
-
-
-
(12,449,145)
(12,449,145)


Contributions by and distributions to owners

Shares issued during the year
4,357,027
-
-
-
4,357,027

Transfer to/from profit and loss account
-
-
(1,136,120)
1,136,120
-

Foreign exchange movement
-
(6,123)
-
-
(6,123)


Total transactions with owners
4,357,027
(6,123)
(1,136,120)
1,136,120
4,350,904


At 31 December 2023
14,857,027
(6,123)
-
(35,824,280)
(20,973,376)


The notes on pages 22 to 45 form part of these financial statements.

Page 15

 
MEDPHARM HOLDCO LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022


Called up share capital
Share based payment reserve
Profit and loss account
Total equity

£
£
£
£

At 1 January 2022 as restated
10,500,000
774,367
(8,084,820)
3,189,547


Comprehensive income for the year

Loss for the year as restated

-
-
(16,623,609)
(16,623,609)

Currency translation differences
-
-
197,174
197,174


Other comprehensive income for the year
-
-
197,174
197,174


Total comprehensive income for the year
-
-
(16,426,435)
(16,426,435)


Contributions by and distributions to owners

Share-based payment charge
-
361,753
-
361,753


Total transactions with owners
-
361,753
-
361,753


At 31 December 2022 as restated
10,500,000
1,136,120
(24,511,255)
(12,875,135)


The notes on pages 22 to 45 form part of these financial statements.

Page 16

 
MEDPHARM HOLDCO LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Share based payment reserve
Profit and loss account
Total equity

£
£
£
£

At 1 January 2023 as restated
10,500,000
1,136,120
(23,562,807)
(11,926,687)


Comprehensive income for the year

Loss for the year as restated
-
-
(7,990,695)
(7,990,695)
Total comprehensive income for the year
-
-
(7,990,695)
(7,990,695)


Contributions by and distributions to owners

Shares issued during the year
4,357,027
-
-
4,357,027

Transfer to/from profit and loss account
-
(1,136,120)
1,136,120
-


Total transactions with owners
4,357,027
(1,136,120)
1,136,120
4,357,027


At 31 December 2023 as restated
14,857,027
-
(30,417,382)
(15,560,355)


The notes on pages 22 to 45 form part of these financial statements.

Page 17

 
MEDPHARM HOLDCO LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022


Called up share capital
Share based payment reserve
Profit and loss account
Total equity

£
£
£
£

At 1 January 2022 as restated
10,500,000
774,367
(4,608,327)
6,666,040


Comprehensive income for the year

Loss for the year as restated

-
-
(19,780,965)
(19,780,965)

Currency translation differences
-
-
826,485
826,485


Other comprehensive income for the year
-
-
826,485
826,485


Total comprehensive income for the year
-
-
(18,954,480)
(18,954,480)


Contributions by and distributions to owners

Share-based payment charge
-
361,753
-
361,753


Total transactions with owners
-
361,753
-
361,753


At 31 December 2022 as restated
10,500,000
1,136,120
(23,562,807)
(11,926,687)


The notes on pages 22 to 45 form part of these financial statements.

Page 18

 
MEDPHARM HOLDCO LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

As restated
2023
2022
£
£

Cash flows from operating activities

Loss for the financial year
(12,412,039)
(16,623,609)

Adjustments for:

Depreciation of tangible assets
1,555,764
1,968,937

Interest paid
2,146,748
1,721,569

Interest received
(4,670)
(1,270)

Taxation charge
360,766
(70,661)

Decrease/(increase) in stocks
28,610
(108,583)

Decrease in debtors
1,337,208
2,487,066

Increase in creditors
930,443
1,175,955

Increase in provisions
2,347,537
-

Corporation tax received/(paid)
219,666
(496,484)

Amortisation and impairment of intangible fixed assets
-
10,583,967

Foreign exchange
(6,123)
(260,393)

Net cash generated from operating activities

(3,496,090)
376,494


Cash flows from investing activities

Purchase of tangible fixed assets
(399,072)
(873,800)

Interest received
4,670
1,270

Net cash from investing activities

(394,402)
(872,530)

Cash flows from financing activities

Issue of ordinary shares
1,853,257
-

New secured loans
1,132,815
2,511,486

Other new loans
2,777,432
-

Repayment of finance leases
(13,269)
(69,121)

Interest paid
(2,146,748)
(1,721,569)

Net cash used in financing activities
3,603,487
720,796
Page 19

 
MEDPHARM HOLDCO LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

As restated

2023
2022

£
£



Net (decrease)/increase in cash and cash equivalents
(287,005)
224,760

Cash and cash equivalents at beginning of year
1,363,707
1,138,947

Cash and cash equivalents at the end of year
1,076,702
1,363,707


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,080,268
1,363,707

Bank overdrafts
(3,566)
-

1,076,702
1,363,707


The notes on pages 22 to 45 form part of these financial statements.

Page 20

 
MEDPHARM HOLDCO LIMITED
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023





At 1 January 2023 as restated
Cash flows
Other non-cash changes
At 31 December 2023
£

£

£

£

Cash at bank and in hand

1,363,707

(283,439)

-

1,080,268

Bank overdrafts

-

(3,566)

-

(3,566)

Debt due after 1 year

(18,210,139)

-

(1,501,101)

(19,711,240)

Debt due within 1 year

(5,836,937)

(3,910,247)

-

(9,747,184)

Finance leases

(13,269)

13,269

-

-


(22,696,638)
(4,183,983)
(1,501,101)
(28,381,722)

The notes on pages 22 to 45 form part of these financial statements.

Page 21

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Medpharm Holdco Limited is a private company limited by shares and is registered and incorporated in England and Wales in the United Kingdom. The registered office is Unit 3, Chancellor Court, 50 Occam Road, Surrey Research Park, Guildford, Surrey, GU2 7AB.
The company's principal activities and nature of its operations are disclosed in the Directors' Report.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.

The financial statements include a prior year adjustment in respect of the figures as at 31 December 2022. The figures for 31 December 2022 have therefore been restated, see note 28.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

Page 22

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Going concern

The financial statements have been prepared assuming the group will continue as a going concern. The going concern assumption contemplates the realisation of assets and satisfaction of liabilities in the normal course of business. However, the industry in which the group operates has experienced a prolonged downturn, which has resulted in many of the group’s customers facing financial challenges. As such, the group experienced a significant decline in turnover in recent years culminating in the generation of an operating loss of £9,909,195 in 2023. In response, in 2024, the wider group undertook multiple refinancing transactions in order to fund its operations. In addition, the group merged with Tergus Pharma Inc., a similarly sized, US-based contract development and manufacturing organization (CDMO) that also focused on topical and transdermal pharmaceuticals. As a result of the merger with Tergus and the expansion opportunities afforded by the combined businesses, the Group required additional funding to continue its operations and finance growth initiatives.
In April 2025, the group was refinanced by its existing shareholder group. The refinancing included US$11.9 million of new equity financing, US$3.0 million of which was used to reduce the third-party debt obligations of the group. This financing, in combination with additional equity investments made in late 2024 and early 2025, bring the total recent financing efforts of the group to US$18.0 million. The directors of the group continue to explore other strategies that will help ensure continued operations, including incremental cost reductions, expansion of its offerings to new end-markets and geographies, and the merger or acquisition of other companies in the industry. All such things taken into consideration allows the directors to conclude that, the group shall have the necessary liquidity to conduct normal operations through a date twelve months beyond the date of these financial statements. Accordingly, the financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the group were unable to continue as a going concern.

Page 23

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP and rounded to the nearest £.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

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.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

Page 24

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.5

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group 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:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

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 Group 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.

 
2.6

Operating leases: the Group as lessee

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.

 
2.7

Research and development

Research and development expenditure is written off against profits in the year in which it is incurred. The estimated claim is recognised within other operating income.

 
2.8

Interest income

Interest income is recognised in profit or loss using the effective interest method.

Page 25

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.9

Finance costs

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.

 
2.10

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.11

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Group in independently administered funds.

 
2.12

Current and deferred taxation

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 reporting date in the countries where the Company and the Group operate and generate 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;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

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.

Page 26

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.13

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.

 
2.14

Intangible assets

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.

 
2.15

Tangible fixed assets

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.

Depreciation is provided on the following basis:

Long-term leasehold property
-
5-20% straight line
Plant and machinery
-
10-20% straight line
Fixtures and fittings
-
15% straight line
Office equipment
-
20% straight line

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.

 
2.16

Impairment of fixed assets and goodwill

Assets that are subject to depreciation or amortisation are assessed at each reporting 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 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 reporting date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

Page 27

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.17

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.18

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.19

Debtors

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.

 
2.20

Cash and cash equivalents

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.

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.21

Creditors

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.

 
2.22

Provisions for liabilities

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.

Page 28

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.23

Financial instruments

The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the Group's Statement of financial position when the Group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Page 29

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.23
Financial instruments (continued)

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the circumstances.
Critical accounting estimates and assumptions
The company makes estimates and assumptions concerning the future. The resulting accounting
estimates and assumptions will, by definition, seldom equal the related actual results.
Long-term contracts
Estimates are made in respect of establishing the stage of completion of long-term contracts. In
determining the stage of completion, the directors estimate the costs to complete and compare costs
incurred as a proportion of total expected costs. Costs relate mainly to contractual hourly staff rates,
materials and equipment.
Recoverability of receivables
The company establishes a provision for receivables that are estimates not to be recoverable. When
assessing recoverability, the directors consider factors such as the ageing of the receivables, past
experience of recoverability, and the credit profile of individual or groups of customers.
Equity-settled share options
In relation to equity-settled remuneration schemes, employee services received, and the corresponding
increase in equity, are measured by reference to the fair value of the equity instruments at the date of
grant. The fair value of share options is estimated using valuation models, such as Black-Scholes, on the
date of grant based on certain assumptions. 

Page 30

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Revenue
11,296,451
18,676,309

11,296,451
18,676,309


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
1,423,230
1,494,105

Rest of Europe
2,032,093
2,054,394

Rest of the world
7,841,128
15,127,810

11,296,451
18,676,309



5.


Other operating income

2023
2022
£
£

Other operating income
11,257
555,190

11,257
555,190



6.


Operating loss

The operating loss is stated after charging:

2023
2022
£
£

Depreciation
1,555,764
1,968,637

Exchange differences
178,685
653,062

Other operating lease rentals
1,320,124
1,507,931

Share-based payment
-
361,753

Amortisation of intangible assets
-
1,706,033

Impairment of intangible assets
-
8,877,934

Page 31

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

7.


Auditor's remuneration

During the year, the Group obtained the following services from the Company's auditor:


2023
2022
£
£

Fees payable to the Company's auditor for the audit of the consolidated and parent Company's financial statements
100,000
110,000


8.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Wages and salaries
8,016,640
9,757,444
-
-

Social security costs
711,284
863,353
-
-

Cost of defined contribution scheme
302,936
382,035
-
-

9,030,860
11,002,832
-
-


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Employees
154
182

The Company has no employees other than the directors, who did not receive any remuneration (2022 - £NIL)

9.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
72,002
846,349

72,002
846,349


The highest paid director received remuneration of £72,002 (2022 - £456,882).

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2022 - £NIL).

Page 32

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Interest receivable

2023
2022
£
£


Other interest receivable
4,670
1,270

4,670
1,270


11.


Interest payable and similar expenses

As restated
2023
2022
£
£


Bank interest payable
645,647
224,562

Other loan interest payable
-
110,222

Preference share dividends
1,501,101
1,386,785

2,146,748
1,721,569

Page 33

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Taxation


As restated
2023
2022
£
£

Corporation tax


Current tax on profits for the year
(75,361)
-


(75,361)
-

Foreign tax


Foreign tax on income for the year
505,758
111,718

505,758
111,718

Total current tax
430,397
111,718

Deferred tax


Origination and reversal of timing differences
(69,631)
194,347

Derecognition of deferred tax asset
-
(478,049)

Adjustment in respect of prior periods
-
101,323

Total deferred tax
(69,631)
(182,379)


Tax on loss
360,766
(70,661)
Page 34

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
12.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 23.5% (2022 - 19%). The differences are explained below:

As restated
2023
2022
£
£


Loss on ordinary activities before tax
(12,051,273)
(16,694,270)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
(2,832,049)
(3,171,911)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
2,265,424
2,541,841

Deferred tax adjustments in respect of prior years
-
(478,049)

Different tax rates on overseas earnings
(34,996)
49,859

Fixed asset differences
(47,579)
(152,918)

Short-term timing difference leading to an increase (decrease) in taxation
(69,631)
-

Unrelieved tax losses carried forward
1,079,597
1,140,517

Total tax charge for the year
360,766
(70,661)


Factors that may affect future tax charges

Deferred tax assets have not been recognised in respect of losses of £12,318,792 (2022 - £4,856,025) as it is not probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Page 35

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Exceptional items

2023
2022
£
£


Impairment losses
-
8,877,934

Aborted sale
-
1,637,433

Provision in respect of onerous lease
2,347,537
-

2,347,537
10,515,367

During the prior year, an assessment was done on the goodwill held by the group, and an impairment loss of £8,877,934 was recognised to reflect the loss-making position of the group.
During the prior year, progress was made in an agreement to sell the subsidiaries, Medpharm Ltd and MP Pharma Services Ltd, incurring costs of £243,915 and £1,393,518 respectively. However, ultimately, the transactions were abandoned.
During the current year, the company's subsidiary, MP Pharma Services Inc., vacated a premises on which it holds a lease until 2031. The company continues to pay its lease commitments and has not been able to either terminate the lease early or sublet it. As such, a provision has been provided for in respect of the present value of the remaining lease payments as at 31 December 2023. 


14.


Parent company profit for the year

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements. The loss after tax of the parent Company for the year was £7,990,695 (2022 - loss £19,780,965).

Page 36

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


Intangible assets

Group and Company





Goodwill

£



Cost


At 1 January 2023
17,060,329



At 31 December 2023

17,060,329



Amortisation


At 1 January 2023
17,060,329



At 31 December 2023

17,060,329



Net book value



At 31 December 2023
-



At 31 December 2022
-



Page 37

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Tangible fixed assets

Group






Long-term leasehold property
Plant and machinery
Fixtures and fittings
Office equipment
Total

£
£
£
£
£



Cost or valuation


At 1 January 2023
7,275,984
7,017,017
290,783
887,388
15,471,172


Additions
34,043
312,673
9,013
43,343
399,072



At 31 December 2023

7,310,027
7,329,690
299,796
930,731
15,870,244



Depreciation


At 1 January 2023
959,263
3,741,970
131,608
375,371
5,208,212


Charge for the year
481,318
920,138
23,183
131,125
1,555,764



At 31 December 2023

1,440,581
4,662,108
154,791
506,496
6,763,976



Net book value



At 31 December 2023
5,869,446
2,667,582
145,005
424,235
9,106,268



At 31 December 2022
6,316,721
3,275,047
159,175
512,017
10,262,960

Page 38

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2023
22,854,907



At 31 December 2023

22,854,907



Impairment


At 1 January 2023
14,872,563


Charge for the period
7,982,343



At 31 December 2023

22,854,906



Net book value



At 31 December 2023
1



At 31 December 2022
7,982,344


Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Medpharm Limited
Unit 3, Chancellor Court, 50 Occam Road, Surrey Research Park, Guildford, Surrey, GU2 7AB
Ordinary
100%
MP Pharma Services Inc*
42222 Emperor Blvd, Suit 320, Durham, NC 27703
Ordinary
100%

* Indirect shareholding

Page 39

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

18.


Stocks

Group
Group
2023
2022
£
£

Raw materials and consumables
79,973
108,583

79,973
108,583



19.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Trade debtors
1,355,256
2,511,034
-
-

Other debtors
857,514
1,525,458
1,647,114
1,609,745

Called up share capital not paid
2,503,770
-
2,503,770
-

Prepayments and accrued income
2,231,669
2,432,324
-
-

6,948,209
6,468,816
4,150,884
1,609,745



20.


Cash and cash equivalents

Group
Group
2023
2022
£
£

Cash at bank and in hand
1,080,268
1,363,707

Less: bank overdrafts
(3,566)
-

1,076,702
1,363,707


Page 40

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

21.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Bank overdrafts
3,566
-
-
-

Bank loans
5,270,860
4,138,045
-
-

Other loans
4,476,324
1,698,892
-
1,698,892

Trade creditors
2,480,090
1,770,417
-
-

Other taxation and social security
118,438
179,164
-
-

Obligations under finance lease and hire purchase contracts
-
6,635
-
-

Other creditors
199,849
134,848
-
1,609,745

Accruals and deferred income
2,851,149
4,135,755
-
-

15,400,276
12,063,756
-
3,308,637


Bank loans of £5,270,860 (2022 - £4,138,045) are secured against the assets of the group.


22.


Creditors: Amounts falling due after more than one year

Group

Group
As restated
Company

Company
As restated
2023
2022
2023
2022
£
£
£
£

Net obligations under finance leases and hire purchase contracts
-
6,634
-
-

Preference shares
19,711,240
18,210,139
19,711,240
18,210,139

19,711,240
18,216,773
19,711,240
18,210,139


The group and company have 12,500,000 preference shares of £1 each in issue, which are redeemable on 15 March 2024 and incur an annual 8% cumulative cash dividend. During the year, the group and company were charged dividends of £1,501,101 (2022 - £1,386,785) on these preference shares. The 8% accrued dividends are included within the £19,711,240 (2022 - £18,210,139) liability at the year-end.  
The preference shares carry the right to one vote at general meetings of the company and are not eligible for further dividends beyond the contractual 8% noted above.



Page 41

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

23.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

Group
Group
2023
2022
£
£

Within one year
-
6,635

Between 1-5 years
-
6,634

-
13,269


24.


Deferred taxation


Group



2023


£






At beginning of year
798,672


Credit to profit or loss
(69,631)



At end of year
729,041

Company


2023






At end of year
-
The provision for deferred taxation is made up as follows:

Group
Group
2023
2022
£
£

Accelerated capital allowances
(729,041)
(798,672)

(729,041)
(798,672)

Page 42

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

25.


Provisions


Group



Other provision

£





Charged to profit or loss
2,347,537



At 31 December 2023
2,347,537

During the current year, the company's subsidiary, MP Pharma Services Inc., vacated a premises on which it holds a lease until 2031. The company continues to pay its lease commitments and has not been able to either terminate the lease early or sublet it. As such, a provision has been provided for in respect of the present value of the remaining lease payments as at 31 December 2023.


26.


Share capital

2023
2022
£
£
Shares classified as equity

Allotted, called up and fully paid



10,500,000 (2022 - 10,500,000) B Ordinary shares of £1.00 each
10,500,000
10,500,000
2,503,770 (2022 - ) D Ordinary shares of £1.00 each
2,503,770
-
1,090,151 (2022 - ) Z Ordinary shares of £1.70 each
1,853,257
-

14,857,027

10,500,000

As restated
2023
2022
£
£
Shares classified as debt

Allotted, called up and fully paid



12,500,000 (2022 - 12,500,000) Preferred shares of £1.00 each
19,711,240
18,210,139


The company's B and Z ordinary shares, which carry no right to fixed income, carry the right to one vote at general meetings of the company.
The company's D ordinary shares, which carry no right to fixed income, carry no right to vote at general meetings of the company.
The preference shares are classified as liabilities and their terms are set out in note 22.

Page 43

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

27.


Reserves

Foreign exchange reserve

The foreign exchange reserve represents the gains and losses arising on retranslating the net assets/liabilities of overseas operations into British sterling.

Share based payment reserve

The share based payment reserve represents the cumulative share based payment expense for the company's share option schemes.

Profit and loss account

The profit and loss account is represented by retained earnings.


28.


Prior year adjustment

The financial statements of Medpharm Holdco Limited have been restated to incorporate the impact of errors in the previous year. A deferred tax liability of £567,769 had been recognised in the company's subsidiary Medpharm Limited in relation to timing differences between capital allowances and depreciation, however the taxable losses of the company as at 31 December 2022 were sufficient to offset against the timing differences, and therefore no deferred tax liability should have been recognised. Deferred tax liabilities have therefore decreased by £567,769 as has the group's tax charge, whilst retained earnings as at 31 December 2022 have increased by the same amount.
Additionally, the 8% accrued dividends on the group's preference shares should have been compounded. Adjusting for this error has decreased the group's retained earnings as at 1 January 2022 by £526,094 and increased the group's preference share dividend charge by £386,785 in the year to 31 December 2022. Subsequently, the group's retained earnings as at 31 December 2022 have decreased by £912,879 as has the group's preference share liability as shown in note 22.


29.


Pension commitments

The group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge represents contributions payable by the group to the fund in the year and amounted to £302,936 (2022 - £382,035). Contributions totalling £24,167 (2022 - £31,604) were payable to the fund at the balance sheet date and are included in creditors.

Page 44

 
MEDPHARM HOLDCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

30.


Commitments under operating leases

At 31 December 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2023
2022
£
£

Not later than 1 year
1,082,547
1,236,959

Later than 1 year and not later than 5 years
3,448,078
4,076,123

Later than 5 years
1,761,406
1,669,151

6,292,031
6,982,233

31.


Related party transactions

The group has taken advantage of the exemptions provided by Section 33 of FRS 102 'Related Party
Disclosures' and has not disclosed transactions entered into between two or more members of a group,
provided that any subsidiary undertaking which is party to the transactions is wholly owned by a member
of that group.


32.


Post balance sheet events

In January 2024, the company was refinanced, subscribing 20,767,148 Series A Preferred Shares for £20,767,148 from new investors. As a result of this transaction, the existing shareholders shares were sold or retired. The funding from this equity transaction was used to completely retire the third-party bank debt of the group and provide operating funding to the group.
In June 2024, the group merged with Tergus Pharma Inc., a similarly sized, US-based contract development and manufacturing organization.
In December 2024, the newly-merged group into a US$4,000,000 (approximately £3.1 million) financing transaction with certain existing shareholders.
In March 2025, the newly-merged group entered into a US$2,000,000 (approximately £1.5 million) financing transaction with certain existing shareholders.
In April 2025, the newly-merged group was recapitalised, which included incremental equity financing from certain existing shareholders and a coterminous restructuring of debt obligations assumed in the June 2024 merger with Tergus. The recapitalization included US$11.9 million of financing from new equity issuances, of which US$3.0 million was used to reduce the company’s outstanding debt. The lender also agreed to convert 50% of the remaining debt balance into an equity instrument. The remainder of the financing will be used to support continued operations of the group.


33.


Controlling party

Ampersand 2014 Limited Partnership is the ultimate controlling party.
Following the restructuring of the group in June 2024, the ultimate parent of the group is now Montana
Holdco LLC, a limited company registered in Delaware in the United States of America.

Page 45