DUNAD THERAPEUTICS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 13
DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Dunad Therapeutics Limited ("the Company") is a private limited company domiciled and incorporated in England and Wales under the Companies Act 2006. The registered office is The Officers' Mess, Royston Road, Cambridge, United Kingdom, CB22 4QH.
The Group consists of Dunad Therapeutics Limited and all of its subsidiaries.
The Group consists of Dunad Therapeutics Limited and all of its subsidiaries.
2.Accounting policies
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 following principal accounting policies have been applied:
Page 14
DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
The Group's financial statements consist of the financial statements of the Parent Company Dunad Therapeutics Limited together with all entities controlled by the Parent Company (its subsidiaries).
All financial statements are made up to 31 December 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.
All intra-group transactions, balances and unrealised gains on transactions between Group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the Group's financial statements from the date that control commences until the date that control ceases.
The Parent Company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group.
The Parent Company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
All financial statements are made up to 31 December 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.
All intra-group transactions, balances and unrealised gains on transactions between Group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the Group's financial statements from the date that control commences until the date that control ceases.
The Parent Company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group.
The Parent Company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
∙Section 7 'Statement of Cash Flows': Presentation of a Statement of Cash Flow and related notes and disclosures;
∙Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fairvalue changes recognised in profit or loss and in other comprehensive income;
∙Section 33 'Related Party Disclosures': Compensation for key management personnel.
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DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
The Group made a loss for the year of £10,993,467 (2024: £12,043,109 loss) and at the year-end has net liabilities of £204,708 (2024: net assets of £10,087,693), of which £2,676,657 is in cash (2024: £10,181,189).
The financial statements have been prepared on a going concern basis, which assumes that the Group and parent company will continue as a going concern for the foreseeable future, and specifically, as a minimum for a period of at least twelve months from the date of approval of these financial statements. In making this assessment, management have considered, and the directors have approved, the following:
The financial statements have been prepared on a going concern basis, which assumes that the Group and parent company will continue as a going concern for the foreseeable future, and specifically, as a minimum for a period of at least twelve months from the date of approval of these financial statements. In making this assessment, management have considered, and the directors have approved, the following:
∙The Group and parent company current performance, current cash position and business plan;
∙The Group and parent company cashflow forecasts for a period of at least 12 months from the date of approval of these financial statements, as well as a base case cash flow forecast; and,
∙The Group’s track record of successful fundraising from investors. Since the Company’s incorporation, the Group has raised £37.1 million of equity from venture capital funds and pharma collaborators, plus a £2.2m convertible loan note. These funds have been used in research and development activities in accordance with the company’s business plan and strategy.
In August 2025, the Company successfully completed a further round of funding from some of its existing investors in the form of a convertible loan note, committing up to £6.0 million of further investment. Of this balance, £2.0 million was received on 12 August 2025 and a further £0.9 million was received in April 2026. The remaining balance is expected to be received over the course of the next 12 months as certain scientific milestones are met, however, the third tranche of the convertible loan note are dependent on the continued success of the lead program, which is inherently uncertain.
The directors have considered a number of cash flow forecast scenarios that will allow the Group to progress its research and development efforts, which include slowing spending as needed to extend the company’s cash runway. The result of the additional fundraising will determine the pace the Group advances its programs.
The directors appreciate the challenging nature of drug discovery and with the relatively short cash runway and the uncertain status of additional fundraising acknowledge a material uncertainty exists in relation to the ability of the Group and parent company to continue as a going concern. The Company has identified and executed a number of strategies to reduce costs and continues to explore non-dilutive funding opportunities, such as grants. The current cash balance and the convertible loan note proceeds provide a cash runway beyond 12 months from the date of filing the financial statements and thus management believes a going concern basis of preparation remains appropriate.
Based on the Group’s history of strong investor support, ongoing discussions with further interested investors and belief in the science, the directors have a reasonable expectation that the Group and parent company will be able to continue to meet its commitments and liabilities as they fall due and to execute its business plan.
For these reasons, the directors adopt a going concern basis in preparing the financial statements. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern.
The directors have considered a number of cash flow forecast scenarios that will allow the Group to progress its research and development efforts, which include slowing spending as needed to extend the company’s cash runway. The result of the additional fundraising will determine the pace the Group advances its programs.
The directors appreciate the challenging nature of drug discovery and with the relatively short cash runway and the uncertain status of additional fundraising acknowledge a material uncertainty exists in relation to the ability of the Group and parent company to continue as a going concern. The Company has identified and executed a number of strategies to reduce costs and continues to explore non-dilutive funding opportunities, such as grants. The current cash balance and the convertible loan note proceeds provide a cash runway beyond 12 months from the date of filing the financial statements and thus management believes a going concern basis of preparation remains appropriate.
Based on the Group’s history of strong investor support, ongoing discussions with further interested investors and belief in the science, the directors have a reasonable expectation that the Group and parent company will be able to continue to meet its commitments and liabilities as they fall due and to execute its business plan.
For these reasons, the directors adopt a going concern basis in preparing the financial statements. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern.
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DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
Revenue from licensing income is recognised evenly over the period of the licensing agreement.
Revenue from collaboration income is recognised in the period in which the work has been incurred, inline with the collaboration agreement.
Grants of a revenue nature are recognised in the Consolidated Statement of Comprehensive Income in the same period as the related expenditure.
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DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black-Scholes model. The fair value determined at the grant date is expensed over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
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DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
A subsidiary is an entity controlled by the Group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Group has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Group's Balance Sheet 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.
The Group has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Group's Balance Sheet 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.
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DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) 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 debtors due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
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.
Basic financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is 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 creditors, bank loans, other loans and loans due to fellow Group companies are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments 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.
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DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors 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.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
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DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows:
Research and development tax credit
The tax recoverable balance is calculated based on the Parent Company's expected eligibility to qualify for enhanced tax deductions for research and development under the SME scheme. Eligibility is dependent on both the size of the Parent Company and its ownership structure.
Convertible loan notes
The Group has issued convertible loan notes which are accounted for as compound financial instruments, with separate liability and equity components recognised on initial recognition. The liability component is measured by discounting the future cash flows at an estimated market rate of interest for a similar instrument without a conversion feature.
Share-based payments
The Group operates equity-settled share option schemes. The fair value of options granted is determined at the grant date using the Black Scholes model, which requires the use of estimates and assumptions, including expected volatility, expected option life, risk-free interest rates and dividend yield.
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DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Analysis of turnover by country of destination:
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DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
There were no factors that may affect future tax charges.
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DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
11.Tangible fixed assets (continued)
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DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
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Details of the company's subsidiaries at 31 December 2025 are as follows:
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DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 29
DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 30
DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
The Group operates a defined contributions pension scheme. The assets of the scheme are held eparately from those of the Group in an independently administered fund. The pension cost charge epresents contributions by the Group to the fund and amounted to £121,482 (2024 - £162,304).
Page 31
DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Page 32
DUNAD THERAPEUTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
The Company issued 19,891,314 Ordinary B3 Shares for £1,989.15 to certain existing investors on 5 May 2026 and also issued 5,070 Ordinary Shares to satisfy the exercise of options over Ordinary Shares between 1 January 2026 and May 2026.
At the balance sheet date, there was no individual controlling party.
Page 33