Nuformix Regulatory News (NFX)

28 July 2022

Nuformix plc

("Nuformix" or the "Company" or the "Group")

Annual Results for the year ended 31 March 2022

Nuformix plc (LSE: NFX), a pharmaceutical development company targeting unmet medical needs in fibrosis and oncology via drug repurposing, is pleased to announce its audited results for the year ended 31 March 2022.

Non-executive Directors' Statement

Introduction

Following the departure of Dr Anne Brindley as Chief Executive Officer, and post period end, Dr Alastair Riddell as Executive Chairman, both to pursue other opportunities, the key priority for the directors continues to be to focus on the Company's early-stage pipeline of preclinical assets and ensure strength in the areas of drug development, business development and financial control within the Group. We operate a lean structure with the limited Board and bring in specialists and consultants, experts in their field, to support the business as required.

To enhance the Group's funding position to allow the continued work on the three assets in the pipeline, in December 2021, the Company undertook an equity fundraise, together with related sharing agreements, with Lanstead Capital Investors L.P. ("Lanstead"), an institutional investor.

Pipeline

Nuformix has an early-stage pipeline of preclinical assets in development to address the high unmet medical need in fibrosis and oncology. We target solutions using our expertise to discover, develop and file patent applications on novel drug forms of existing, marketed drugs, that have improved physical properties, with the aim of developing novel products in new indications to bring attractive commercial opportunities. Importantly, the commercial opportunity is optimised when the repurposed product is differentiated from the original marketed drug by way of either dose, route of administration or presentation.

Drug repurposing is a well-known and successful strategy for enhancing the therapeutic and commercial value of marketed drugs, and their development typically brings a greater probability of success compared to developing brand new drugs, due to the existing data that has been generated on the marketed drug. This existence of data may also result in lower overall development costs and shorter development timelines.

The Group's business model is to take these assets to key value inflection points before partnering or licensing. We conduct our R&D activities through out-sourcing, to enable us to access the different types of expertise that are needed for drug R&D and to minimise our operational costs. We have a strong network of external contractors, with whom we have had relationships over many years.

NXP002 (new form of tranilast) - Idiopathic Pulmonary Fibrosis ("IPF")

NXP002 is the Group's pre-clinical lead asset and a potential novel inhaled treatment for IPF and possibly other fibrosing interstitial lung diseases ("ILDs"). It is a proprietary, new form of the drug tranilast, to be delivered in an inhaled formulation.

Idiopathic Pulmonary Fibrosis ("IPF") is a devastating lung disease associated with a higher mortality rate than many cancers and where there is a need for additional treatment options. Thus, IPF represents a high unmet medical need and a significant commercial opportunity. IPF is classified as a rare disease and presents a global commercial market that is forecast to grow to US$8.8bn by 2027. Sales of standard-of-care therapies OFEV and Esbriet achieved US$2.5bn and US$1bn respectively in 2021.

Tranilast has a long history of safe use as an oral drug for allergies, but there is evidence that supports its potential in fibrosis, including IPF. NXP002 is differentiated as it is a new form of tranilast that is being formulated for delivery direct to the lungs by inhalation, a new route of administration for this drug. The inhalation route is a well-known strategy for treatment of lung diseases to yield greater efficacy and reduce systemic side-effects compared to oral treatment. Nuformix has two patent families protecting new forms of tranilast, some members of which have been granted in major pharmaceutical territories, while others are still in prosecution. In addition, in March 2022 a method of use patent application was filed.

NXP002, as a potential treatment for IPF, is a likely candidate for Orphan Drug Designation which could provide additional product protection against potential competitors. The positioning of such an inhaled treatment for IPF could be either added to standard of care or administered as a monotherapy.

The Company has already generated positive preclinical data on NXP002, demonstrating that:

- NXP002 can be formulated in a simple and stable solution suitable for inhaled delivery via nebulisation;

- NXP002 formulations for nebulisation can be efficiently delivered to the lung; and

- NXP002 can dose-dependently regulate the production of mediators relevant to lung fibrosis and inflammation following a lipopolysaccharide ("LPS") challenge.

However, as announced post-period end on 30 May 2022, no conclusions could be drawn from an additional study undertaken to investigate the duration of action of NXP002 formulations. Subsequently further studies have been initiated to generate a robust pre-clinical data package to support the progression of NXP002, both in terms of product development and business development discussions.

These studies will directly address issues faced in the duration of action studies. Firstly, the Company will investigate a new formulation of NXP002 for inhalation, delivered using an alternative method designed to ensure consistent and controlled exposure is achieved. Secondly, the Company will explore a new range of doses to best optimise efficacy of treatment. The eventual aim of the studies is to confirm the formulation's positive pharmacological profile towards the treatment of lung fibrosis and inflammation via inhalation and to assess its duration of action. Data from these inhalation studies will add to the Company's current compelling pre-clinical dataset, to best support the development of NXP002 as a treatment for IPF and potentially other poorly treated fibrosing interstitial lung diseases.

Post-period, two abstracts describing NXP002 were peer-reviewed and accepted for presentation at the European Respiratory Society ("ERS") International Congress 2022 being held in Barcelona on 4-6 September 2022.

NXP001 (new form of aprepitant) - Oncology

NXP001 is a proprietary new form of the drug aprepitant that is currently marketed as a product in the oncology supportive care setting (chemotherapy induced nausea and vomiting). On 23 September 2020, Nuformix granted an exclusive option to Oxilio Ltd ("Oxilio"), a privately held pharmaceutical development company, to license NXP001 globally for oncology indications on terms previously disclosed. The option was executed on 13 September 2021. Oxilio is investigating aprepitant for the potential new treatment of cancer indications. Oxilio has entered into a service agreement with Quotient Sciences and is conducting formulation development of NXP001 to determine whether it can achieve the bioavailability and subsequent dosing regimen required for this new indication. 

NXP004 (novel forms of olaparib) - Oncology

The Group has discovered novel forms of olaparib, a drug currently marketed by AstraZeneca, under the Lynparza® brand name. Lynparza® was first approved in December 2014 for the treatment of adults with advanced ovarian cancer and deleterious or suspected deleterious germline BRCA mutation. Since then, Lynparza® has secured similar approvals in breast, pancreatic and prostate cancers with further trials on-going. These approvals have propelled Lynparza® sales to US$2.7bn in 2021 with industry analysts forecasting annual sales of US$9.7bn by 2028.

The Group has filed two patent applications on these novel forms of olaparib with the potential for patent life to 2040/2041.

The Company previously demonstrated the enhanced performance of NXP004 cocrystals compared to olaparib. Subsequently further preformulation studies have allowed the Company to identify lead cocrystals from its patent estate to be progressed for further development.

Post-period, the Company reported that it initiated a programme of work to progress the NXP004 programme in three key areas:

· Commence the scale-up of lead cocrystal production processes;

· Directly compare in-vitro dissolution performance of lead co-crystals to the marketed Lynparza product; and

· Based on the results from these studies a formulation development programme may be initiated. The aims of this work will be to develop prototype formulations that offer the potential to be both bioequivalent and 'bio-better' versus the Lynparza product.

This work will direct and support future out-licensing discussions for NXP004.

Summary and Outlook

The strategy of the Group is to continue to optimise value from its existing assets while maintaining tight control of costs. In particular, the fundraise with Lanstead has enabled the Group to continue to advance and exploit the current assets within the portfolio through additional R&D and business development activities as set out above.

At the appropriate time for each asset, the Group plans to conduct business development/licensing activities for all its assets using a structured and data-driven approach, with the goal of seeking global licensing deals.

The Chairman last year acknowledged that there had been a series of changes over the years which we also experienced in the past year and more recently, however our focus and emphasis is on stability to progress the studies and achieve significant value creation to generate a real return for shareholders.

We would like to thank all stakeholders and in particular our shareholders for their continued support and we look forward to the remainder of the year and beyond with confidence that significant value can be realised from our portfolio of assets over time.

Julian Gilbert and Maddy Kennedy

Non-Executive Directors

27 July 2022

Enquiries:

About Nuformix

Nuformix is a pharmaceutical development company targeting unmet medical needs in fibrosis and oncology via drug repurposing. The Company aims to use its expertise in discovering, developing and patenting novel drug forms, with improved physical properties, to develop new products in new indications that are, importantly, differentiated from the original (by way of dosage, delivery route or presentation), thus creating new and attractive commercial opportunities. Nuformix has a pipeline of preclinical assets with potential for significant value and early licensing opportunities.

Strategic Report

Review of the Business

A review of the year is given in the Non-Executive Directors' Statement above.

Risks and uncertainties

The Group's risk management policy is regularly reviewed and updated in line with the changing needs of the business. Risk is inherent in all business. Set out below are certain risk factors which could have an impact on the Group's long-term performance and mitigating factors adopted to alleviate these risks. This does not purport to be an exhaustive list of the risks affecting the Group.

The primary risks identified by the Board are:

Strategic risks

· Funding the business

The biotechnology and pharmaceutical industries are very competitive, with many major players having substantial R&D departments with greater resources and financial support. The Group aims to execute licensing deals early in the development process in order to generate revenue to support the business. The Group's lead asset is targeted towards IPF, a disease area where there is good precedent for licensing deals at early stages of development. Without licensing revenue, reliance falls on raising funds from investors or potential M&A opportunities. Failure to generate additional funding from these sources, if required, would compromise the Group's ability to achieve its strategic objectives as set out in the outlook. There is a material uncertainty around achieving early licensing deals and, if needed, raising additional funds. However it is the Directors' reasonable expectation that the Group has adequate resources to continue to operate as a going concern for at least twelve months from the date of the approval of the accounts. In forming this assessment, the Directors have prepared cashflow forecasts covering the period ending 31 March 2024 that take into account the likely run rate on overheads and research and development expenditure and the prudent expectations of income from out-licensing rights to its programmes.

The Subscription proceeds from the Lanstead Sharing Agreements pursuant to which the Company is entitled to receive back those proceeds on a pro rata monthly basis over a period of 20 months, subject to adjustment upwards or downwards each month depending on the Company's share price at the time. The Sharing Agreement provides the opportunity for the Company to benefit from positive future share price performance. Notwithstanding the Subscription Price of 1.5 pence, shareholders should note that the share price of the Company needs to be on average over the 20 months of the Sharing Agreement at or above the Benchmark Price of 2 pence per share for the Company to receive at least, or more than, the gross Subscription of £1.65million.

· Feasibility of drug candidates

Pharmaceutical R&D is an inherently risky activity and drug candidates can fail due to a lack of efficacy, lack of potency, unsuitable pharmacokinetic properties, unacceptable toxicology profile, poor stability of the drug or formulation, poor performance of the drug product, or other technical issues unforeseen at the time of candidate selection. This is the main reason that conventional pharmaceutical R&D takes many years and billions of dollars to progress a drug from discovery through to an approved medicine. It is possible that the drug candidates selected by the Group are found to be non- viable for further development although the Group's model of repurposing and working on known drugs allows us to mitigate this risk to a certain extent.

· Failure to generate and protect our IP

If our IP rights are not adequately secured or defended against infringement, or conversely become subject to infringement claims by others, commercial exploitation could be completely inhibited. The Group constantly monitors its patents and is prepared to defend them rigorously.

By virtue of conducting research on known drugs, competitors may file patent applications on the same drugs as the Group, and thus there is a risk of securing new granted patents. There is a delay of up to 18 months in publishing patent applications and thus it is not always known whether the Group's inventions will be novel. This is mitigated through knowledge and expertise in identifying new IP and promptly filing patent applications.

· Unrealistic goals and timeframes

The Board has a duty to maintain a realistic view of the chances of success of products, deals and partnerships. Should this not be managed accurately and appropriately, the Group and its Board and staff risk financial, business and reputational damage, whilst its shareholders become exposed to investment risk and uncertainty over the Group's viability and status. The Board continually reviews expectations and communications in the public domain to reduce the risk of misalignment.

· Reliance on partners

To progress the development of a drug candidate requires resources, financial and otherwise, that are not necessarily available to the Group. The drug candidates that the Group wishes to develop may be of interest to third parties capable of providing these resources, so a partnership (e.g., a co-development partnership) may provide mutual benefits and mitigate risks for the Group. However, the specific strategic focus of a partner may not align totally with the Group's objectives. Maintaining a balance in a partnership is therefore a risk, such as timing, cost sharing, development decisions. Currently the Group is progressing two of its three pipeline assets without external co-development partners and thus this risk is currently minimised.

Operational risks

· Management, employees, consultants and contractors

With a fully virtual Group operating model with a reliance on consultants and contractors, the Group's ability to manage day to day tasks and its relationships with its customers and suppliers could be undermined by failure to recruit key personnel. The Group endeavours to offer attractive remuneration and a positive working environment for all people involved in its projects. The Board are incentivised as detailed in the Directors' Remuneration Report.

· Business development risks in terms of timing and success of deal flow

Opportunities to generate value from the portfolio have increased, but there is a need to generate further data to make the assets as attractive as possible to potential licensees. The Group seeks to extract value from its existing pipeline through early licensing deals once sufficient data are generated, to provide revenue. Generation of more robust data packages will lead to a greater probability of successful licensing discussions.

· Adapting to the external environment - COVID-19

The ability of the Group to quickly adapt to external events such as the outbreak of COVID-19 may impact the delivery of our strategy. The pandemic could cause further impact to external research. Our primary focus remains the safety of our employees. The Group follows Government advice whilst allowing employees to work flexibly. The risks are also minimised by the Group's virtual business model, allowing the Board to work remotely and effectively. Close liaison with contractors ensures that Group projects are progressed according to agreed timelines and costs.

Financial risk management

· Failure to achieve strategic plans or meet targets or expectations

The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. Further detail on the Group's risk management policies and procedures are set out in Note 20 of the financial statements.

Financial Highlights

· Net assets at year-end of £4,737,962 (2021: £5,686,261) which includes £464,095 cash at bank (2021: £1,669,780)

· The Group delivered a loss on ordinary activities (after tax credit) for the year of £1,108,993 (2021: loss of £1,253,497) and a loss per share of 0.19p (2021: 0.22p). The reported loss is driven mainly by costs related to the further development of pipeline assets

· Total revenue for the year of £50,000 (2021: £195,550)

Future outlook

The Non-Executive Directors' Statement above gives information on the outlook of the Group.

Performance

The following are the key performance indicators ("KPIs") considered by the Board in assessing the Group's performance against its objectives. These KPIs are:

Financial KPIs

The Group is currently at a stage where the Board considers availability of cash to fund the planned R&D activities to be the primary KPI. At 31 March 2022 cash balances totalled £464,095 (2021: £1,669,780). The Board will consider introducing additional KPIs to monitor the Group's development as they become relevant in the future.

· Meeting financial targets:

The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. Further detail on the Group's risk management policies and procedures are set out in Note 20 of the financial statements.

· Revenue from collaborative technology licensing agreements:

During the year, collaborative agreements with third parties entailed providing fee-for-service work and applying Nuformix know how to their proprietary products. This has provided Nuformix with limited short-term revenue streams.

The future Group strategy is to prioritise its resources on progressing its own portfolio to generate licensing revenue.

Non-Financial KPIs

· Progress of Lead Programmes:

The Group strategy is to generate revenue streams through applying and further developing its IP to produce proprietary product opportunities for short-term development and early out-licensing opportunities. Thus, progression of its assets towards licensing is crucial to the business.

NXP002: During the year the Group prioritised the development of NXP002, its IPF candidate, and generated further preclinical data. Post-period, studies are ongoing to provide a more robust data package for potential early licensing. In addition, two abstracts describing the NXP002 were peer-reviewed and accepted for presentation at the European Respiratory Society ("ERS"). Progression of the planned R&D, filing a patent application and peer reviewed acceptance of submitted abstracts are important performance indicators.

NXP001: In the Group signed an exclusive global licensing agreement with Oxilio to license the NXP001 IP for oncology indications. Securing the full licensing agreement is an important performance indicator.

NXP004: During the year, the Group discovered new forms of olaparib, a commercially attractive oncology drug, and filed an additional patent application, an important performance indicator.

· Co-development with third parties:

Co-development of generic products with third parties, where Nuformix's knowhow or IP could provide extended patent protection is a potential business model although the Group is prioritising its resources on progressing its own portfolio to generate licensing revenue.

Section 172

The Board considers the interests of the Group's employees and other stakeholders, including the impact of its activities on the community, environment and the Group's reputation, when making decisions. The Board ensures that its decisions offer the best chance to promote the success of the Group as a whole and consider the likely and long-term consequences for all stakeholders, particularly (though not exclusively) considering the following:

· How the views and interests of all stakeholders were represented in the boardroom during the year. Open and honest discussion at Board level considers the impact on the Group's stakeholders when reviewing items flowing to the Board as part of its activities, whether this is reviewing strategy, budget or a business development opportunity.

· Given the size and stage of development of the Group, the Board has not formally adopted a mechanism to obtain stakeholder feedback. However, the Group's Directors can be contacted at info@nuformix.com should any stakeholders wish to contact the Group and shareholders may contact the Company's investor relations adviser, IFC Advisory Limited, at nuformix@investor-focus.co.uk.

· The Group's strategy and business model detailed in the Non-Executive Directors' Statement above

· How the Group manages risks is set out in the full annual report

· Corporate governance including how governance supported the delivery of our strategic objectives in this period is set out in the annual report

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. The Directors are required by law to prepare the Group and Parent Company financial statements in accordance with UK-adopted international accounting standards. 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 Group and of the profit or loss for that period. In preparing the Company and Group's financial statements, Companies Act 2006 requires that Directors:

· Select suitable accounting policies and apply them consistently;

· Make judgements and accounting estimates that are reasonable and prudent;

· State whether applicable under UK-adopted international accounting standards, have been followed, subject to any material departures disclosed and explained in the financial statements; and

· 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 Group transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In the case of each person who was a director at the time of this report was approved:

· So far as that Director is aware, there is no relevant audit information of which the Group's auditor is unaware; and

· That Director has taken all steps that the director ought to have taken as a director to make himself aware of any relevant audit information and to establish that the Group's auditor is aware of that information.

Auditors

A resolution to reappoint Jeffreys Henry Audit Limited as auditors will be presented to the members at the Annual General Meeting in accordance with Section 485(2) of the Companies Act 2006.

Independent Auditor's Report to the Members of Nuformix plc

Opinion

We have audited the financial statements of Nuformix plc ("Parent Company") and its subsidiary (together the "Group") for the year ended 31 March 2022 which comprise the statement of comprehensive income, the statements of financial position, the statements of changes in equity, the statements of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted International Accounting Standards.

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 March 2022 and of the loss for the year then ended;

• have been properly prepared in accordance with UK-adopted International Accounting Standards; 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 UK, including the FRC's Ethical Standard as applied to listed entities, 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.

Material uncertainty related to going concern

We draw attention to note 2 in the financial statements, which indicates that the Group and Parent Company is not in a position where is it self-financing and will require further funding which has not yet been secured. Whilst management are confident that such funding will be achieved there is an inherent material uncertainty surrounding this. As stated in note 2, these events or conditions, along with other matters set out in note 2, indicate that a material uncertainty exists that may cast significant doubt on the Group and Parent Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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. Our evaluation of the Directors' assessment of the Group's ability to continue to adopt the going concern basis of accounting included, as part of our risk assessment, review of the nature of the business of the Group, its business model and related risks including where relevant the impact of the COVID-19 pandemic, the requirements of the applicable financial reporting framework and the system of internal control. We evaluated the Directors' assessment of the Group's ability to continue as a going concern, including challenging the underlying data and key assumptions used to make the assessment, and evaluated the Directors' plans for future actions in relation to their going concern assessment.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

An overview of the scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the Directors made subjective judgments, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Group, its accounting processes, its internal controls and the industry in which it operates.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

In addition to the matter described in the material uncertainty related to going concern section above, we have determined the matters below to be the key audit matters to be communicated in our report.

Below is not a complete list of all risks identified by our audit.

Our application of materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Based on our professional judgment, we determined materiality for the financial statements as a whole as follows:

We agreed with the Board of Directors that we would report to them misstatements identified during our audit above £3,150 as well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion the part of the directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

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

• the information given in the 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 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 its environment obtained in the course of the audit, we have not identified material misstatements in the 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 Group, or returns adequate for our audit have not been received from branches not visited by us; or

• the Group financial statements and the directors' remuneration report to be audited 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.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement above, 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 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 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 financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council's website, to detect material misstatements in respect of irregularities, including fraud.

The extent to which our procedures are capable of detecting irregularities, including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• the senior statutory auditor ensured the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

• we identified the laws and regulations applicable to the Group through discussions with the Directors, and from our commercial knowledge and experience of the biotech sector;

• we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group, including Companies Act 2006, taxation legislation, data protection, anti-bribery, employment, environmental, health and safety legislation and anti-money laundering regulations;

• we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and

• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the group's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;

• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

• performed analytical procedures to identify any unusual or unexpected relationships;

• tested journal entries to identify unusual transactions;

• assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 2 of the financial statements were indicative of potential bias;

• investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• agreeing financial statement disclosures to underlying supporting documentation;

• reading the minutes of meetings of those charged with governance;

• enquiring of management as to actual and potential litigation and claims;

• reviewing correspondence with HMRC and the group's legal advisor.

There are inherent limitations in our audit procedures described above. The more removed the laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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.

Other matters we are required to address

We were appointed by the Board of Directors on 18 February 2022 to audit the financial statements for the year ended 31 March 2022. Our total uninterrupted period of engagement is 1 year, covering the year ended 31 March 2022.

The non-audit services prohibited by the FRC's Ethical Standard were not provided to the Group and we remain independent of the Group in conducting our audit. 

Our audit opinion is consistent with the additional report to the Board of Directors.

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 2006. Our audit work has been undertaken so that we might state to the Group'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 Group and the Group's members as a body, for our audit work, for this report, or for the opinions we have formed.

Sanjay Parmar

(Senior statutory auditor)

For and on behalf of Jeffreys Henry Audit Limited (Statutory Auditor)

Finsgate

5-7 Cranwood Street

London EC1V 9EE

Date: 27 July 2022

Financial Statements

Consolidated Statement of Comprehensive Income

for the year-ended 31 March 2022

The accompanying notes to the financial statements form an integral part of the financial statements.

Consolidated Statement of Financial Position

As at 31 March 2022

The accompanying notes to the financial statements form an integral part of the financial statements.

Consolidated Statement of Changes in Equity

For the year-ended 31 March 2022

The accompanying notes to the financial statements form an integral part of the financial statements.

Consolidated Statement of Cash Flows

for the year-ended 31 March 2022

The accompanying notes to the financial statements form an integral part of the financial statements

Notes to the Consolidated Financial Statements

for the year-ended 31 March 2022

1. General information

Nuformix plc ("the Company") and its subsidiary (together, "the Group") operate in the field of pharmaceutical development targeting unmet medical needs in fibrosis and oncology via drug repurposing.

The Company is a public limited company which is listed on the Standard List of the London Stock Exchange, domiciled in the United Kingdom ("the UK") and incorporated in England and Wales.

The address of its registered office is 6th Floor, 60 Gracechurch Street, London, EC3V 0HR.

The company operates in a virtual manner and as such does not have a principal place of business.

2. Summary of Significant Accounting policies

Basis of preparation

On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK-adopted International Accounting Standards, with future changes being subject to endorsement by the UK Endorsement Board. Nuformix plc transitioned to UK-adopted International Accounting Standards in its Group and Parent Company financial statements on 1 April 2021. This change constitutes a change in accounting framework. However, there is no change on recognition, measurement or disclosure in the financial year reported as a result of the change in framework.

These Group and Parent Company financial statements were prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.

The financial statements of the Group and the Parent Company have been prepared on accrual basis and under historical cost convention. The financial statements are presented in Pounds Sterling which is the Group's functional and presentational currency.

New Standards and Interpretations

No new standards, amendments or interpretations, effective for the first time for the period beginning on or after 1 April 2021 have had a material impact on the Group.

Standards, amendments and interpretations that are not yet effective and have not been early adopted are as follows:

The Directors are evaluating the impact of the new and amended standards above. The Directors believe that these new and amended standards are not expected to have a material impact on the financial statements of the Group

Going concern

The financial statements have been prepared on the going concern basis of preparation which, inter alia, is based on the Directors' reasonable expectation that the Group and Parent Company has adequate resources to continue to operate as a going concern for at least twelve months from the date of approval of these financial statements. In forming this assessment, the Directors have prepared cashflow forecasts covering the period ending 31 March 2024 that take into account the likely run rate on overheads and research and development expenditure and the estimates of the possibilities of raising funds through issues of equity and have considered alternative strategies should projected income be delayed or fail to materialise.

The Group is not in a position for self-financing and will require further funding which has not yet been secured. Whilst the Directors understand the risks and issues around raising further funds through an equity raise, this will be carefully considered, as and when appropriate.

These circumstances indicate the existence of an inherent material uncertainty, which may cast a significant doubt on the Group's and Parent Company's ability to continue as a going concern, when in twelve - eighteen months' time a thorough review of funding will be required. However, these scenarios have already been considered and will continue to be closely monitored by the Directors. The financial statements do not include any adjustments that would result if the company or Group was unable to continue as a going concern.

The Directors have carried out a thorough review of costs and are clear on the development work to be completed. Discretionary costs have been carefully reviewed and reduced where reasonable to do so while continuing to allow the prudent running of the business.

After careful consideration, the Directors consider that they have reasonable grounds to believe that the Group can be regarded as a going concern and for this reason they continue to adopt the going concern basis in preparing the Group's financial statements.

Critical Accounting Estimates and Judgements

The preparation of these financial statements under UK-adopted International Accounting Standards requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. These estimates and assumptions are based upon management's knowledge and experience of the amounts, events or actions. Actual results may differ from such estimates.

The critical accounting estimates are considered to relate to the following:

Intangible assets

The Group recognises intangible assets in respect of goodwill arising on consolidation. This recognition requires the use of estimates, judgements and assumptions in determining whether the goodwill is impaired at each year end.

Share options

The Group's fair values equity-settled share-based payment transactions using the Black-Scholes model. The use of the models involves judgements and estimates including an assessment of whether the shares will vest. Should actual future outcomes differ from these assessments the amounts recognised on a straight-line basis would vary from those currently recognised.

Basis of consolidation

The Group's financial statements consolidate those of the parent company and its subsidiary as of 31 March 2022. Its subsidiary has a reporting date of 31 March.

All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a Group perspective. Amounts reported in the financial statements of its subsidiary have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.

Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.

Business combinations

The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.

Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.

Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the Group's activities. Revenue is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the Group.

The Group recognises revenue when:

• the amount of revenue can be reliably measured;

• it is probable that future economic benefits will flow to the entity; and,

• specific criteria have been met for each of the Group activities, such as the demonstration of milestone achievements in research or acceptance by both parties.

Segmental information

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-makers. The chief operating decision-makers, who are responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive Board of Directors.

All operations and information are reviewed together so that at present there is only one reportable operating segment.

In the opinion of the Directors, during the year the Group operated in the single business segment of the research and development of pharmaceutical products using technology developed by the Group.

Taxation

Taxation comprises current and deferred tax. Current tax is based on taxable profit or loss for the period. Taxable profit differs from net profit or loss as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's current tax asset is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial information and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

Property, plant and equipment

Property, plant and equipment is stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of property, plant and equipment includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged to write off the cost of assets over their estimated useful lives, as follows:

Goodwill and Intangible assets

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting year date.

Goodwill is not amortised, but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units ("CGUs") for the purpose of impairment testing. The allocation is made to those CGUs or groups of CGUs that are expected to benefit from the business combination in which the goodwill arose. The Group currently has only one CGU.

Other intangible assets, including customer relationships, licences, patents and trademarks, that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and any accumulated impairment losses.

Amortisation is provided on the Group's patents to write off the cost, less any estimated residual value, over their expected useful economic life on a 10% straight line basis.

Impairment testing of goodwill, other intangible assets and property, plant and equipment

For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are expected to benefit from synergies of a related business combination and represent the lowest level within the Group at which management monitors goodwill.

Cash-generating units to which goodwill has been allocated (determined by the Group's management as equivalent to its operating segments) are tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset's (or cash-generating unit's) carrying amount exceeds its recoverable amount, which is the higher of fair value less costs of disposal and value-in-use. To determine the value-in-use, management estimates expected future cash flows from each cash-generating unit and determines a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked to the Group's latest approved budget, adjusted as necessary to exclude the effects of future reorganisations and asset enhancements. Discount factors are determined individually for each cash-generating unit and reflect current market assessments of the time value of money and asset-specific risk factors.

Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash-generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Financial instruments

IFRS 9 requires an entity to address the classification, measurement and recognition of financial assets and liabilities.

i) Classification

The Company classifies its financial assets in the following measurement categories:

• those to be measured at amortised cost.

The classification depends on the Company's business model for managing the financial assets and the contractual terms of the cash flows.

The Company classifies financial assets as at amortised cost only if both of the following criteria are met:

• the asset is held within a business model whose objective is to collect contractual cash flows; and

• the contractual terms give rise to cash flows that are solely payment of principal and interest.

•

ii) Recognition

Purchases and sales of financial assets are recognised on trade date (that is, the date on which the Company commits to purchase or sell the asset). Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.

iii) Measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset.

Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Debt instruments

Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the statement of profit or loss.

iv) Impairment

The Company assesses, on a forward looking basis, the expected credit losses associated with any debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the Company applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

Financial liabilities

The Group's financial liabilities include other payables.

Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group designated a financial liability at fair value through profit or loss.

Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss (other than derivative financial instruments that are designated and effective as hedging instruments).

All interest-related charges and, if applicable, changes in an instrument's fair value that are reported in profit or loss are included within finance costs or finance income.

Equity

Equity comprises the following:

• "Share capital" represents the nominal value of equity shares.

• "Share premium" represents the amount paid for equity shares over the nominal value.

• "Reverse acquisition reserve" arises due to the elimination of the Company's investment in Nuformix Technologies Limited.

• "Merger relief reserve" represents the share premium arising on issue of shares in respect of the reverse acquisition takeover.

• "Share option reserve" represents the fair value of options issued.

• "Retained earnings" represents retained earnings/losses.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a separate entity and has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior years.

For defined contribution plans contributions are paid into publicly or privately administered pension insurance plans on a mandatory or contractual basis. The contributions are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as an asset.

Share based payments

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value excludes the effect of non-market-based vesting conditions. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 18.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of the number of equity instruments that will eventually vest. At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market-based vesting conditions. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to reserves.

Equity‑settled share‑based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.

For cash‑settled share‑based payments, a liability is recognised for the goods or services acquired, measured initially at the fair value of the liability. At each reporting date until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the year.

Earnings per Ordinary Share

The Company presents basic and diluted earnings per share data for its Ordinary Shares.

Basic earnings per Ordinary Share is calculated by dividing the profit or loss attributable to Shareholders by the weighted average number of Ordinary Shares outstanding during the period.

Diluted earnings per Ordinary Share is calculated by adjusting the earnings and number of Ordinary Shares for the effects of dilutive potential Ordinary Shares.

Investment in subsidiaries

Investments in subsidiaries are carried in the Company's balance sheet at cost less accumulated impairment losses. On disposal of investments in subsidiaries the difference between disposal proceeds and the carrying amounts of the investments are recognised in profit or loss.

3. Revenue

The analysis of the Group's revenue for the year from continuing operations is as follows:

5. Operating loss

6. Finance income and costs

7. Staff costs

The average number of persons employed by the Group (including directors) during the year and analysed by category was as follows:

8. Directors' remuneration

The Directors' remuneration for the year was as follows:

Details of the total remuneration paid for the services of the directors are set out in the Remuneration Report.

The tax on loss before tax for the year is lower than (2021: lower than) the standard rate of corporation tax in the UK of 19% (2021: 19%).

The differences are reconciled below:

No deferred tax asset has been recognised as the Directors cannot be certain that future profits will be sufficient for this asset to be realised. As at 31 March 2022 the Group has tax losses carried forward of approximately £4,853,000 (2021: £4,120,000).

11. Loss per share

Loss per share is calculated based on the weighted average number of shares outstanding during the period. Diluted loss per share is calculated based on the weighted average number of shares outstanding and the number of shares issuable as a result of the conversion of dilutive financial instruments.

There is no difference between the basic and diluted earnings per share as the effect would be to decrease earnings per share.

For impairment testing purposes, management considers the operations of the Group to represent a single cash generating unit (CGU) focused on pharmaceutical development, targeting unmet medical needs in fibrosis and oncology via drug repurposing. The directors have assessed the recoverable amount of goodwill, which in accordance with IAS36 is the higher of its value in use and its fair value less cost to sell (fair value), in determining whether there is evidence of impairment.

As at 31 March 2022, the Group assessed the recoverable amount of the CGU with reference to a value-in-use calculation based on cash flow projection of the subsidiary. The calculations uses cash flow projection based on financial budgets approved by the Directors covering a 30-year period with discount rate of 15% assumed. The recoverable amount of the CGU based on the value-in-use calculation exceeded its carrying amount. The Directors also assessed the market capitalisation of the Group with reference to the share price of the Company and supported the view that goodwill is not impaired.

The fair value of trade and other receivables is considered by the Directors not to be materially different to the carrying amounts.

The Directors consider that the carrying value of cash and cash equivalents represents their fair value.

On 17 December 2021, the company completed a capital increase through the issue of 24,000,000 shares of £0.001 each in a share placement at a price of £0.015 per share, with a share premium of £115,982.

17. Share options and warrants

The Group operates share-based payment arrangements to remunerate Directors and key employees in the form of a share option scheme. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant. The fair value is determined at the grant date of the equity-settled share-based payments and is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest and adjusted for the effect of non- market based vesting conditions.

The following share-based payments were made in the year to 31 March 2022:

On 31 January 2022, the directors, A. Riddell. J. Gilbert and M. Kennedy were granted warrants to subscribe for 3,000,000 new Ordinary shares of £0.001 at an exercise price of 1.45p each. The warrants are exercisable up until 31 January 2023. The fair value of the warrants was determined using the Black-Scholes option pricing model at 1.45p per warrant.

The fair value of the options and warrants issued in 2022 were determined using the Black-Scholes option pricing model, where appropriate, and had a weighted average of 2.46p per option (2021: 2.46p).

The significant inputs into the model in respect of the options and warrants granted in the years ended 31 March 2021 and 31 March 2022 were as follows:

The following table sets out details of the granted warrants and options movements:

18. Pension and other schemes

Defined contribution pension sheme

The Group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the Group to the scheme and amounted to £1,721 (2021: £3,870).

Contributions totaling £Nil (2021: £292) were payable to the scheme at the end of the year and are included in creditors.

The fair value of trade and other payables is considered by the Directors not to be materially different to the carrying amounts. All payables are due within one year.

20. Financial instruments

Credit risk

The main credit risk relates to liquid funds held at banks. The credit risk in respect of these bank balances is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.

Liquidity risk

The Group seeks to manage financial risk, to ensure sufficient liquidity is available to meet foreseeable needs. An analysis of trade and other payables is given in note 19.

Capital risk management

The Group's objectives when managing capital are:

• to safeguard the Group's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders;

• to support the Group's growth; and

• to provide capital for the purpose of strengthening the Group's risk management capability.

The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. Management regards total equity as capital and reserves, for capital management purposes.

21. Related party transactions

All transactions with related parties are conducted on an arm's length basis.

The remuneration of the key management personnel of the Group, who are defined as the directors, is set out in the directors' remuneration report.

Ultimate controlling party

The Directors do not consider there to be a single ultimate controlling party.

22. Post Balance Sheet Events

In December 2021 the Company entered into a Sharing Agreement with Lanstead Capital Partners LP ("Lanstead"), split into two tranches of new shares issued with payments to be received over a 20-month period from March 2022 to October 2023. Tranche 1 covers the period March 2022 to June 2022 and Tranche 2 runs from July 2022 to October 2023

The agreement is structured in such a way that the proceeds received by the Company are linked to the market price for the Company's shares. The proceeds are calculated based on the volume-weighted average share price in the month preceding the payment from Lanstead, compared to a target price of 2p per share. The total proceeds based on the 2p share price are £1,650,000, with Tranche 1 representing £330,000 of this amount.

At the time of signing the accounts the Company has received the full proceeds from Tranche 1 at a value of £139,982 net. This is considered to be an adjusting post balance sheet event and therefore the share issue in the year to March 2022 has been adjusted to reflect the known proceeds.

Tranche 2 of the share issue completed in April 2022 and the proceeds are yet to be determined as they relate to the future share price. As stated above this will vary in accordance with the share's performance against the target price of 2p. The issue of shares post year end is considered to be a post balance sheet event.