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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The notes on pages 17 to 33 form part of these financial statements.
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
The notes on pages 17 to 33 form part of these financial statements.
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Enterprise Therapeutics Holdings Limited (the 'Company') is a limited company incorporated in England and Wales. The Company's registered office is at Sussex Innovation Centre, Science Park Square, Falmer, Brighton, BN1 9SB. These consolidated financial statements comprise the Company and its subsidiaries (collectively the 'Group' and individually 'Group companies'). The Group's principal activity is that of a drug discovery company dedicated to research and development of novel therapies for the treatment of respiratory diseases.
The financial statements have been prepared in accordance with UK adopted International Accounting Standards, the IFRS Interpretations Committee (formerly the International Financial Reporting Interpretations Committee (IFRIC)) interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared on a going concern basis and under the historic cost convention.
The group reconstruction effected in 2021 has been accounted for using merger accounting principles, in order to meet the overriding requirement under section 404(5) of the Companies Act 2006 for financial statements to present a true and fair view. The transaction is outside of the scope of IFRS 3. In 2021 Enterprise Therapeutics Limited was acquired by a share for share exchange, with all the former ordinary shareholders of Enterprise Therapeutics Limited having the same proportionate interest in the new holding company as they had previously held in Enterprise Therapeutics Holdings Limited. The Directors consider that it is not practicable to quantify the effect of this departure from the Companies Act 2006 requirements. Details of the Group's accounting policies, including changes during the year, are included in note 5. The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006 and elected not to present its own Statement of Comprehensive Income in these financial statements. In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the Group accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively. The areas where judgements and estimates have been made in preparing the consolidated financial statements and their effects are disclosed in note 6 2.1 Impact of new international reporting standards, amendments and interpretations There have been no new international reporting standards, amendments and interpretations that have had a material impact on the Company for the year ended 31 December 2024. Standards effective for accounting periods beginning on or after 1st January 2025 Effective date 1st January 2025 IAS 21 - The Effects of Changes in Foreign Exchange Rates - lack of exchangeability. Effective date 1st January 2026 IFRS 9 - Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Amendments to the Classification and Measurement of Financial Instruments. Annual improvements to IFRS accounting standards, amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7. Effective date 1st January 2027 IFRS 18 - Presentation and Disclosure in Financial Statements.
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The financial statements have been prepared on the going concern basis, which assumes that the Group will continue in operations for the foreseeable future. In January 2024 there was a large fundraise which brought in circa £20m. The directors, therefore, believe it is appropriate to adopt the going concern basis of accounting.
5.Accounting policies
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
5.Accounting policies (continued)
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary. The adoption of merger accounting presents Enterprise Therapeutics Holdings Limited as if it had always been the parent undertaking of the Group.
Trade payables are recognised initially at fair value and subsequently held at amortised cost using the effective interest rate method.
Cash and cash equivalents include cash in hand, deposits held with banks, bank overdrafts and other short term highly liquid investments with original maturities less than 3 months.
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
5.Accounting policies (continued)
Income tax on the results for the year comprises current and deferred tax. Income tax is recognised in the statement of comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Claims under the Research and Development Expenditure Credit Scheme are recognised on the accruals basis.
Research costs are written off to the statement of comprehensive income in the year in which they are incurred. All research costs, whether funded by grant or not, are included within administrative expenses on the face of the consolidated Statement of Comprehensive Income.
All ongoing development expenditure is currently expensed in the year in which it is incurred. Due to the regulatory and other uncertanties inherent in the development of the Group's programmes, the criteria for development costs to be recognised as an asset as prescribed by IAS 38 "Intangible Assets" are not met until the product has been submitted for regulatory approval, such approval has been received and it is probable that future economic benefits will flow to the Group. The Group does not currently have any such internal development costs that qualify for capitalisation as intangible assets.
The financial statements are presented in pounds sterling, which is the Group's functional and presentational currency. Transactions denominated in foreign currencies are translated into sterling at the actual rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at rates ruling at the balance sheet date. Exchange differences are included in the consolidated Statement of Comprehensive Income within administrative expenses.
Contributions to defined contribution pension schemes are charged to the consolidated Statement of Comprehensive Income in the year to which they relate.
All the classes of the Company's share capital are classified as equity. Incremental costs directly attributable to the issue of new share capital are shown as a deduction, net of tax, from the proceeds.
Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.
If significant parts of an item of property, plant and equipment have different useful lives then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in the consolidated Statement of Comprehensive Income. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group. Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life: Lab and office equipment - 3 to 5 years straight line
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
5.Accounting policies (continued)
6.1 Judgements
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amount reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements (apart from those involving estimates) have had the most significant effects on amounts recognised in the financial statements.
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
6.Accounting estimates and judgements (continued)
The classification of convertible loan notes in accordance with IAS 32 requires management to make judgements over the occurrence or non-occurrence of future contractual events that will impact the presentation of the loan notes. Management have accounted for the loan notes in issue as containing a compound hybrid feature and have, therefore, recognised an amount in equity equal to the the difference between the fair value of the compound instrument and the fair value of the liability component. The determination of fair value of the compound instrument requires Management to make estimates in respect of interest rates that have a significant impact on the accounting.
Research and development expenditure
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Changes in tax rates and factors affecting the future tax charges
An unprovided deferred tax asset arises principally in respect of trading losses totalling £5,058,627 (2023: £4,342,989) at 31 December 2024 together with other immaterial timing differences. This deferred tax asset has not been recognised due to the uncertainty of the future taxable profits against which it may be settled.
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 29
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Share premium
Foreign exchange reserve
Merger Reserve
Other reserves
Retained earnings
Share-based payment reserve
The share-based payment reserve represents amounts charged across the group in relation to options over restricted stock units in the Company.
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
In common with other businesses, the Group is exposed to risks that arise from its use of financial instruments. The Group’s principal financial instruments are financial assets comprising trade and other receivables (excluding prepayments) and cash balances; and financial liabilities comprising trade payables. These are all measured at at amortised cost.
Exposure to credit, liquidity, currency and interest rate risks arise in the normal course of the Group’s business. The Group does not enter into derivative financial instruments. Credit risk The Group’s credit risk is primarily attributable to its credit sales. The Group does not consider the effect of expected credit losses to be material. Liquidity risk The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely. The interest rate exposure of the Group as at 31 December 2024 and the maturity profile of the carrying value of the Group’s financial liabilities are shown in notes 16 and 18. All financial liabilities will be settled within six months unless stated in notes 16 and 18. The Group’s policy is to ensure that it has sufficient cash to allow it to meet its liabilities. This risk is monitored by the Directors via forecast cash flows and annual budgets. Currency risk The Group is exposed to translation and transaction foreign exchange risk arising because the Group has operations in more than one country. As such, the Group’s net assets arising from such overseas operations are exposed to currency risk resulting in gains or losses on retranslation into sterling. Foreign exchange risks arise when the Group enters into transactions denominated in a currency other than their functional currency. Movements in exchange rates also affect the value of the Group’s foreign currency cash balances in the UK. Exchange rate movements during the year resulted in a charge of £25,092 (2023: credit of £3,410). Interest rate risk Interest rate risk arises on borrowings which are at fixed interest rates. Changes in rates could have the effect of either increasing or decreasing the Group's net loss. The Directors do not consider the risk to be material to the financial statements as the interest on the Group's loan notes are fixed.
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 32
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ENTERPRISE THERAPEUTICS HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
During the year a prior year adjustment was made within Enterprise Therapeutics Inc as the directors consider that it is appropriate to restate the brought forward share based payment reserve, as they became aware that at the prior year end this was incorrect. The impact of this adjustment is to reduce the prior year share based payment reserve and increase retained earnings by £132,041
At 31 December 2024, the Company was owed £22,000,000 (2023: £7,250,000) by other group companies. As the Company, Enterprise Therapeutics Holdings Ltd, is the entity receiving investment by way of the issue of equity or loan notes, the operating subsidiary company, Enterprise Therapeutics Ltd, receives its funding by way of an intercompany loan. At the period end the intercompany loan with Enterprise Therapeutics Ltd was £22,000,000. Whilst the Directors remain optimistic for the continued success of the subsidiary company’s research and development activities, there remains inherent uncertainty relating to the success of the research and development. Therefore, the Directors have recognised a provision against the value of the loan of £22,000,000 in full at 31 December 2024.
In the opinion of the Directors, there is no single ultimate controlling party.
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