REGISTERED NUMBER: 07725451 (England and Wales) |
Group Strategic Report, Report of the Directors and |
Audited Consolidated Financial Statements for the Year Ended 31 December 2022 |
for |
Huma Therapeutics Limited |
REGISTERED NUMBER: 07725451 (England and Wales) |
Group Strategic Report, Report of the Directors and |
Audited Consolidated Financial Statements for the Year Ended 31 December 2022 |
for |
Huma Therapeutics Limited |
Huma Therapeutics Limited (Registered number: 07725451) |
Contents of the Consolidated Financial Statements |
for the Year Ended 31 December 2022 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 6 |
Consolidated Statement of Profit or Loss | 10 |
Consolidated Statement of Profit or Loss and Other Comprehensive Income | 11 |
Consolidated Statement of Financial Position | 12 |
Company Statement of Financial Position | 14 |
Consolidated Statement of Changes in Equity | 16 |
Company Statement of Changes in Equity | 18 |
Consolidated Statement of Cash Flows | 20 |
Company Statement of Cash Flows | 21 |
Notes to the Statements of Cash Flows | 22 |
Notes to the Consolidated Financial Statements | 24 |
Reconciliation of Equity | 74 |
Reconciliation of Loss | 78 |
Huma Therapeutics Limited |
Company Information |
for the Year Ended 31 December 2022 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
45 Gresham Street |
London |
EC2V 7BG |
Huma Therapeutics Limited (Registered number: 07725451) |
Group Strategic Report |
for the Year Ended 31 December 2022 |
The directors present their strategic report of the company and the group for the year ended 31 December 2022. |
The company has chosen in accordance with s.414C(11) Companies Act 2006 to set out in the strategic report |
information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) |
Regulations 2008 to be contained in the directors report. It has done so in respect of future development and financial instruments. |
MISSION |
The mission of the group is to help people live longer, fuller lives. |
TRANSITION TO IFRS |
For the year ended 31 December 2022, Huma Therapeutics Ltd adopted International Financial Reporting Standards ("IFRS"), as adopted by the United Kingdom, for the first time. These financial statements include transition notes (notes 34 & 35) to explain the impact of changing from UK GAAP to IFRS. |
REVIEW OF BUSINESS |
The directors consider the following measures to be the key financial performance indicators: |
2022 | 2021 | Change % |
000's | 000's |
Total Contract Value (Excluding devices) | 28,500 | 23,900 | 19% |
Turnover | 12,686 | 5,307 | 139% |
Gross Profit | 9,421 | 4,683 | 101% |
Loss after Tax | (30,924 | ) | (23,303 | ) | 33% |
Cash and cash equivalents | 35,705 | 45,910 | (22% | ) |
Group TCV (Total Contract Value) increased more than 19% over 2022, and based on the backlog from 2021 we drove revenue growth of 139%. |
Operating expenses grew 38%, which is considerably slower than the growth in revenues, and demonstrates the benefit of some of the investments made during 2021 and 2022. |
In late December 2022, the Company acquired Alcedis, a leading digital clinical trials company based in Germany. This strengthened our position in the clinical trials space, and added to the string of successful acquisitions that we have concluded since December 2021. |
Huma Therapeutics Limited (Registered number: 07725451) |
Group Strategic Report |
for the Year Ended 31 December 2022 |
PRINCIPAL RISKS AND RISK MANAGEMENT |
Macroeconomic environment: The uncertain macroeconomic environment with higher inflation and risk of a recession, could impact the ability of the group to maximise revenue growth. However, the Directors are comforted that the digital health industry generally is benefiting from the global growth of healthcare systems looking to alternative solutions from traditional delivery of healthcare. Moreover, other clients such as pharmaceutical and medical device companies are less impacted by the macroeconomic environment than other industries. |
Inflationary pressures: Could lead to higher wage costs in order to attract and retain the right talent. Wages represent the majority of the costs to the business, and the Company may not be able to pass on the increased costs through price increases to customers. This could lead to an impact on the profitability. In order to mitigate this risk, the Company is continuing to invest in innovation to make its product more valuable to customers. It is also investing in improving its overall employee benefits and has a flexible, hybrid working policy to position itself as an attractive place to work. |
Regulatory: The Company develops and supplies Software-as-a-Medical-Device (SaMD) and Medical Data Systems for Clinical Trials. During 2022, the Group focused on transitioning to the new European Medical Device Regulation (EU MDR). This was successfully concluded with the Class IIb EU MDR approval and Class II FDA approval in H1 2023. Maintaining compliance and obtaining the required certifications and regulatory approvals is important to the continued supply of the Company's products. The Company has a highly skilled Quality Assurance & Regulatory Affairs team that monitors the regulatory environment and supports the company in ensuring compliance with existing standards and regulations. |
Access to funding: Being loss-making today, the Company assumes that it can continue to access the private and public funding resources required to support its growth, should this be needed. In order to mitigate this risk, the company carefully manages its resources and maintains and develops strong relationships with a wide range of investors and financial institutions. |
Foreign exchange exposure: The Group earns revenue in USD, GBP or Euros. The Company does not enter into any hedging transactions but retains bank balances in a combination of these currencies. |
RESEARCH AND DEVELOPMENT |
The Group continues to invest in developing assets to add to its platform, in order to enhance the offering to customers. |
FUTURE DEVELOPMENTS |
The Directors remain confident of sustained growth in the business; however, predicting the pace of digital-first adoption is not easy. In order to achieve its future objectives, the Group continues to invest in its sales and marketing capabilities, in research and development to improve the product offering and enhance the technology platform, and continues to build relationships with leading institutions and life sciences companies. |
ON BEHALF OF THE BOARD: |
20 September 2023 |
Huma Therapeutics Limited (Registered number: 07725451) |
Report of the Directors |
for the Year Ended 31 December 2022 |
The directors present their report with the financial statements of the company and the group for the year ended 31 December 2022. |
For the year ended 31 December 2022, Huma Therapeutics Limited adopted International Financial Reporting Standards ("IFRS"), as adopted by the United Kingdom, for the first time. These financial statements include transition notes (notes 34 & 35) to explain the impact of changing from UK GAAP to IFRS. |
PRINCIPAL ACTIVITY |
The principal activities of the Company are the development and commercialisation of a technology platform that supports digital-first delivery of care and research. The Company serves three principal customer groups; hospital at home solutions for healthcare service providers, companion/SaMD solutions for the commercial divisions of life sciences companies and solutions that support decentralised clinical trials for the R&D divisions of life sciences companies. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 December 2022. |
EVENTS SINCE THE END OF THE YEAR |
The Group has reviewed its subsequent events through the signing of the audit report. |
By June 2023, there was an ongoing funding round whereby £16,173k funds had been signed and received from investors. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2022 to the date of this report. |
GOING CONCERN |
In making their assessment of going concern, the directors have considered detailed forecasts of expected revenues, expenditure and cash flows and taken into consideration existing banking facilities of the wider group. The base forecasts and downside scenario forecasts were prepared through to August 2024, which is considered the foreseeable future. |
Since the year end, by June 2023, there was ongoing funding round whereby £16,173k funds had been signed and received from investors. |
The directors are of opinion that the group has sufficient funds available to finance· its operations for the foreseeable future following the date of approval of these financial statements and accordingly they have prepared the financial statements on the going concern basis. |
BRANCHES OUTSIDE THE UK |
The group operates a branch in Italy under the name BioBeats Group Limited. |
STRATEGIC REPORT |
The Directors have chosen in accordance with S414c of the Companies Act to set out in the strategic report information required by Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch 7 to be contained in the Directors' report. |
Huma Therapeutics Limited (Registered number: 07725451) |
Report of the Directors |
for the Year Ended 31 December 2022 |
DIRECTORS' RESPONSIBILITIES STATEMENT |
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and 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 company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
AUDITORS |
On 4 November 2022, Davis Grant Limited resigned as the auditors for Huma Therapeutics Ltd. |
CLA Evelyn Partners Limited was appointed as the new auditors for Huma Therapeutics Ltd for the year ended 31 December 2022. |
The auditors, CLA Evelyn Partners Limited, have indicated their willingness to be reappointed for another term and arrangements are in place for them to be deemed reappointed as auditors in the absence of a General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Huma Therapeutics Limited |
Opinion |
We have audited the financial statements of Huma Therapeutics Limited (the 'Group') for the year ended 31 December 2022 which comprise Consolidated Statement of Profit and Loss, Consolidated Other Comprehensive Income, Consolidated Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows, Company Statement of Cash Flows and the notes to the financial statements, including 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 company's affairs as at 31 December 2022 and of its 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 company 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, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Emphasis of matter - value of customer relationships and contracts |
We draw attention to note 12 in the financial statements, which explains that the value of the customer relationships of £20,563k and contracts £2,578k has used a net present value model of future cash flows. There are a number of assumptions in estimating the present value of future cash flows including management's expectation of future revenue, timing and quantum of expenditure, achieving a compound annual revenue growth rate to year of 60.8% and applying a 7% discount rate. Assumptions are made on the useful economic life of this intangible asset and if shortened, would increase the amortisation charge recognised in the income statement. The ultimate outcome of this matter is not certain, and the financial statements do not reflect any impairment that might be required against the customer relationships and contracts should the revenue growth rates not be achieved. Our opinion is not modified in this matter. |
Other information |
The other information comprises the information included in Group Strategic Report, Report of the Directors, and Audited Consolidated Financial Statements, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. |
We have nothing to report in this regard. |
Report of the Independent Auditors to the Members of |
Huma Therapeutics Limited |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- the information given in the 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 company 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, or returns adequate for our audit have not been received from branches not visited by us; or |
- the financial statements are not in agreement with the accounting records and returns; or |
- certain disclosures of directors' remuneration specified by law are not made; or |
- we have not received all the information and explanations we require for our audit. |
Responsibilities of directors |
As explained more fully in the directors' responsibilities statement set out on page five, 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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
Report of the Independent Auditors to the Members of |
Huma Therapeutics Limited |
Auditors' 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, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below: |
In the context of the audit, we considered those laws and regulations which determine the form and content of the financial statements and which are central to the Company's ability to conduct its business and where failure to comply could result in material penalties. The Company must abide by the Companies Act 2006 and UK-adopted international accounting standards in respect of the preparation and presentation of the financial statements. Aside from this, we did not identify any specific laws and regulations as being of significance in the context of the Company. |
We performed the following specific procedures to gain evidence about compliance with the significant laws and regulations identified above: |
- We enquired with the Company's management as to the existence of litigation and no material items were identified; |
- We have reviewed board minutes for evidence of noncompliance; and |
- We have obtained representation from management that they have disclosed to us all known instances of non-compliance or suspected non-compliance with laws and regulations. |
The senior statutory auditor led a discussion with all members of the engagement team regarding the susceptibility of the entity's financial statements to material misstatement, including how fraud might occur. The key areas identified as part of the discussion were the risk of manipulation of the financial statements through manual journal entries, incorrect recognition of revenue, existence and valuation of network infrastructure/electric vehicle assets, and accounting estimates such as impairment assumptions. These areas were communicated to the other members of the engagement team who were not present at the discussion. |
Audit procedures performed by the engagement team on the areas where fraud might occur included: |
- Testing the occurrence of revenue, including the underlying deferred income. |
- Testing of the recognition and recoverability of year-end trade debtors and accrued income; |
- Testing journal entries, selected based on specific risk assessments applied based on client processes; |
- Understanding and challenging the basis for management estimates. |
The senior statutory auditor was satisfied that the engagement team collectively had the appropriate competence and capabilities to identify or recognise irregularities. |
A further description of our responsibilities is available on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report. |
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 Report of the Auditors. |
Report of the Independent Auditors to the Members of |
Huma Therapeutics Limited |
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 company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
45 Gresham Street |
London |
EC2V 7BG |
Huma Therapeutics Limited (Registered number: 07725451) |
Consolidated Statement of Profit or Loss |
for the Year Ended 31 December 2022 |
2021 |
as restated |
Notes | £'000 | £'000 |
CONTINUING OPERATIONS |
Revenue | 12,686 | 5,307 |
Cost of sales | (3,265 | ) | (624 | ) |
GROSS PROFIT | 9,421 | 4,683 |
Other operating income | 189 | 59 |
Administrative expenses | (40,917 | ) | (29,575 | ) |
OPERATING LOSS | (31,307 | ) | (24,833 | ) |
Finance costs | 5 | (267 | ) | (131 | ) |
Finance income | 5 | 143 | - |
LOSS BEFORE INCOME TAX | 6 | (31,431 | ) | (24,964 | ) |
Income tax | 7 | 507 | 1,661 |
LOSS FOR THE YEAR | (30,924 | ) | (23,303 | ) |
Loss attributable to: |
Owners of the parent | (30,924 | ) | (23,303 | ) |
Huma Therapeutics Limited (Registered number: 07725451) |
Consolidated Statement of Profit or Loss and Other Comprehensive Income |
for the Year Ended 31 December 2022 |
2022 | 2021 |
as restated |
£'000 | £'000 |
LOSS FOR THE YEAR | (30,924 | ) | (23,303 | ) |
OTHER COMPREHENSIVE INCOME |
Items that will not be reclassified to profit or loss: |
Exchange differences on retranslating of subsidiary undertaking | (248 | ) | (33 | ) |
Exchange differences on non monetary transactions with subsidiary undertaking | 809 | - |
Income tax relating to items that will not be reclassified to profit or loss | - | - |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX | 561 | (33 | ) |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR | (30,363 | ) | (23,336 | ) |
Total comprehensive income attributable to: |
Owners of the parent | (30,363 | ) | (23,336 | ) |
Huma Therapeutics Limited (Registered number: 07725451) |
Consolidated Statement of Financial Position |
31 December 2022 |
2022 | 2021 | 2021 |
as restated |
Notes | £'000 | £'000 | £'000 |
ASSETS |
NON-CURRENT ASSETS |
Goodwill | 11 | 16,095 | 9,974 | 1,537 |
Intangible assets | 12 | 50,330 | 15,165 | 340 |
Property, plant and equipment | 13 | 1,972 | 731 | 411 |
Investments | 14 | 74 | - | 23 |
68,471 | 25,870 | 2,311 |
CURRENT ASSETS |
Trade and other receivables | 15 | 12,507 | 4,393 | 6,351 |
Tax receivable | 427 | 2,034 | 1,122 |
Listed Investments | 16 | 5,734 | 11,521 | 9,919 |
Cash and cash equivalents | 17 | 35,705 | 45,909 | 6,111 |
54,373 | 63,857 | 23,503 |
TOTAL ASSETS | 122,844 | 89,727 | 25,814 |
EQUITY |
SHAREHOLDERS' EQUITY |
Called up share capital | 18 | 28 | 27 | 23 |
Share premium | 19 | 134,415 | 105,548 | 41,449 |
Advances for shares | 19 | 5,000 | 11,000 | 2,508 |
Share options reserves | 19 | 29,087 | 20,622 | 13,867 |
Retained earnings | 19 | (92,361 | ) | (61,998 | ) | (38,662 | ) |
TOTAL EQUITY | 76,169 | 75,199 | 19,185 |
LIABILITIES |
NON-CURRENT LIABILITIES |
Financial liabilities - borrowings |
Lease liabilities and |
Convertible loan notes | 21 | 21,010 | 137 | - |
Deferred tax | 25 | 6,160 | 3,686 | - |
Provisions | 24 | 123 | 87 | - |
27,293 | 3,910 | - |
CURRENT LIABILITIES |
Trade and other payables | 20 | 18,600 | 10,319 | 6,469 |
Financial liabilities - borrowings |
Lease liabilities and |
Convertible loan notes | 21 | 517 | 296 | 160 |
Tax payable | 265 | 3 | - |
19,382 | 10,618 | 6,629 |
TOTAL LIABILITIES | 46,675 | 14,528 | 6,629 |
TOTAL EQUITY AND LIABILITIES | 122,844 | 89,727 | 25,814 |
Huma Therapeutics Limited (Registered number: 07725451) |
Consolidated Statement of Financial Position - continued |
31 December 2022 |
The financial statements were approved by the Board of Directors and authorised for issue on 20 September 2023 and were signed on its behalf by: |
D Vahdat - Director |
Huma Therapeutics Limited (Registered number: 07725451) |
Company Statement of Financial Position |
31 December 2022 |
2022 | 2021 | 2021 |
as restated |
Notes | £'000 | £'000 | £'000 |
ASSETS |
NON-CURRENT ASSETS |
Goodwill | 11 |
Intangible assets | 12 |
Property, plant and equipment | 13 |
Investments | 14 | 33,053 | 12,381 | 2,182 |
CURRENT ASSETS |
Trade and other receivables | 15 |
Tax receivable |
Listed Investments | 16 | 5,734 | 11,521 | 9,919 |
Cash and cash equivalents | 17 |
TOTAL ASSETS |
EQUITY |
SHAREHOLDERS' EQUITY |
Called up share capital | 18 |
Share premium | 19 |
Advances for shares | 19 |
Share options reserves | 19 |
Retained earnings | 19 | ( | ) | ( | ) | ( | ) |
TOTAL EQUITY |
LIABILITIES |
NON-CURRENT LIABILITIES |
Financial liabilities - borrowings |
Lease liabilities and |
Convertible loan notes | 21 | 20,353 | - | - |
Provisions | 24 |
CURRENT LIABILITIES |
Trade and other payables | 20 |
Financial liabilities - borrowings |
Lease liabilities and |
Convertible loan notes | 21 |
TOTAL LIABILITIES |
TOTAL EQUITY AND LIABILITIES |
Huma Therapeutics Limited (Registered number: 07725451) |
Company Statement of Financial Position - continued |
31 December 2022 |
The financial statements were approved by the Board of Directors and authorised for issue on |
Huma Therapeutics Limited (Registered number: 07725451) |
Consolidated Statement of Changes in Equity |
for the Year Ended 31 December 2022 |
Called up |
share | Retained | Share |
capital | earnings | premium |
£'000 | £'000 | £'000 |
Balance at 1 January 2021 | 23 | (38,662 | ) | 41,449 |
Deficit for the year | - | (23,303 | ) | - |
Other comprehensive income | - | (33 | ) | - |
Total comprehensive income | - | (23,336 | ) | - |
Issue of share capital | 4 | - | 64,099 |
Total transactions with owners, recognised directly in equity | 4 | - | 64,099 |
Balance at 31 December 2021 | 27 | (61,998 | ) | 105,548 |
Deficit for the year | - | (30,924 | ) | - |
Other comprehensive income | - | 561 | - |
Total comprehensive income | - | (30,363 | ) | - |
Issue of share capital | 1 | - | - |
Shares issued | - | - | 28,867 |
Total transactions with owners, recognised directly in equity | 1 | - | 28,867 |
Balance at 31 December 2022 | 28 | (92,361 | ) | 134,415 |
Huma Therapeutics Limited (Registered number: 07725451) |
Consolidated Statement of Changes in Equity - continued |
for the Year Ended 31 December 2022 |
Advances | Share |
for | options | Total |
shares | reserves | equity |
£'000 | £'000 | £'000 |
Balance at 1 January 2021 | 2,508 | 13,867 | 19,185 |
Deficit for the year | - | - | (23,303 | ) |
Other comprehensive income | - | - | (33 | ) |
Total comprehensive income | - | - | (23,336 | ) |
Issue of share capital | - | - | 64,103 |
Share option charge | - | 6,755 | 6,755 |
Shares to be issued | 11,000 | - | 11,000 |
Shares issued | (2,508 | ) | - | (2,508 | ) |
Total transactions with owners, recognised directly in equity | 8,492 | 6,755 | 79,350 |
Balance at 31 December 2021 | 11,000 | 20,622 | 75,199 |
Deficit for the year | - | - | (30,924 | ) |
Other comprehensive income | - | - | 561 |
Total comprehensive income | - | - | (30,363 | ) |
Issue of share capital | - | - | 1 |
Share option charge | - | 8,465 | 8,465 |
Shares issued | (6,000 | ) | - | 22,867 |
Total transactions with owners, recognised directly in equity | (6,000 | ) | 8,465 | 31,333 |
Balance at 31 December 2022 | 5,000 | 29,087 | 76,169 |
Huma Therapeutics Limited (Registered number: 07725451) |
Company Statement of Changes in Equity |
for the Year Ended 31 December 2022 |
Called up |
share | Retained | Share |
capital | earnings | premium |
£'000 | £'000 | £'000 |
Balance at 1 January 2021 | ( | ) |
Deficit for the year | - | (26,643 | ) | - |
Total comprehensive income | - | ( | ) | - |
Issue of share capital | - |
Balance at 31 December 2021 | ( | ) |
Deficit for the year | - | (28,737 | ) | - |
Other comprehensive income | - | 809 | - |
Total comprehensive income | - | ( | ) | - |
Issue of share capital | - |
Shares issued | - | - | 28,867 |
Total transactions with owners, recognised directly in equity | 1 | - | 28,867 |
Balance at 31 December 2022 | 28 | (91,134 | ) | 134,415 |
Huma Therapeutics Limited (Registered number: 07725451) |
Company Statement of Changes in Equity - continued |
for the Year Ended 31 December 2022 |
Advances | Share |
for | options | Total |
shares | reserves | equity |
£'000 | £'000 | £'000 |
Balance at 1 January 2021 |
Deficit for the year | - | - | (26,643 | ) |
Total comprehensive income | ( | ) |
Issue of share capital | - | - |
Share option charge | - | 6,755 | 6,755 |
Shares to be issued | 11,000 | - | 11,000 |
Shares issued | (2,508 | ) | - | (2,508 | ) |
Balance at 31 December 2021 |
Deficit for the year | - | - | (28,737 | ) |
Other comprehensive income | 809 |
Total comprehensive income | ( | ) |
Issue of share capital | - | - |
Share option charge | - | 8,465 | 8,465 |
Shares issued | (6,000 | ) | - | 22,867 |
Total transactions with owners, recognised directly in equity | (6,000 | ) | 8,465 | 31,333 |
Balance at 31 December 2022 | 77,396 |
Huma Therapeutics Limited (Registered number: 07725451) |
Consolidated Statement of Cash Flows |
for the Year Ended 31 December 2022 |
2022 | 2021 |
as restated |
£'000 | £'000 |
Cash flows from operating activities |
Cash generated from operations | 1 | (17,021 | ) | (10,742 | ) |
Tax (paid)/received | 1,443 | 752 |
Net cash from operating activities | (15,578 | ) | (9,990 | ) |
Cash flows from investing activities |
Purchase of intangible fixed assets | (7,402 | ) | (179 | ) |
Purchase of tangible fixed assets | (300 | ) | (94 | ) |
Purchase of fixed asset investments | - | 23 |
Acquisitions of assets | (17,031 | ) | (10,060 | ) |
Cash invested in current assets | 5,713 | (1,602 | ) |
Dividends received | 143 | - |
Net cash from investing activities | (18,877 | ) | (11,912 | ) |
Cash flows from financing activities |
Convertible loan notes | 20,253 | - |
Payment of lease liabilities | (502 | ) | (235 | ) |
Issuance of share capital | - | 4 |
Issuance of share premium | 190 | 64,099 |
Cash advances for shares | - | (2,508 | ) |
Related party | - | 5 |
Interest paid | (217 | ) | (124 | ) |
Lease interest paid | (50 | ) | (7 | ) |
Net cash from financing activities | 19,674 | 61,234 |
(Decrease)/increase in cash and cash equivalents | (14,781 | ) | 39,332 |
Cash and cash equivalents at beginning of year | 2 | 45,909 | 6,111 |
Effect of foreign exchange rate changes | 4,577 | 466 |
Cash and cash equivalents at end of year | 2 | 35,705 | 45,909 |
Huma Therapeutics Limited (Registered number: 07725451) |
Company Statement of Cash Flows |
for the Year Ended 31 December 2022 |
2022 | 2021 |
as restated |
£'000 | £'000 |
Cash flows from operating activities |
Cash generated from operations | 1 | ( | ) | ( | ) |
Tax (paid)/received |
Net cash from operating activities | ( | ) | ( | ) |
Cash flows from investing activities |
Purchase of intangible fixed assets | ( | ) | ( | ) |
Purchase of tangible fixed assets | ( | ) | ( | ) |
Purchase of fixed asset investments | (19,382 | ) | (1,359 | ) |
Sale of tangible fixed assets |
Cash invested in current assets | 5,713 | (1,602 | ) |
Dividends received |
Net cash from investing activities | ( | ) | ( | ) |
Cash flows from financing activities |
Convertible loan notes | 20,253 | - |
Payment of lease liabilities | ( | ) | ( | ) |
Issuance of Share capital |
Issuance of share premium | 190 | 64,099 |
Cash advance for shares | - | (2,508 | ) |
Related party | 527 | (7,941 | ) |
Interest paid | (216 | ) | (116 | ) |
Lease interest paid | (22 | ) | (7 | ) |
Net cash from financing activities |
(Decrease)/increase in cash and cash equivalents | ( | ) |
Cash and cash equivalents at beginning of year | 2 | 5,248 |
Effect of foreign exchange rate changes | 4,577 | 465 |
Cash and cash equivalents at end of year | 2 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Statements of Cash Flows |
for the Year Ended 31 December 2022 |
1. | RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS |
Group |
2022 | 2021 |
as restated |
£'000 | £'000 |
Loss before income tax | (31,431 | ) | (24,964 | ) |
Depreciation charges | 630 | 320 |
Loss on disposal of fixed assets | 329 | 69 |
Share options charge | 8,466 | 6,754 |
Impairment of goodwill | - | 1,537 |
Amortisation charges | 6,153 | 65 |
Foreign exchange difference | (4,339 | ) | (500 | ) |
Net gain on investment | (162 | ) | - |
Finance costs | 267 | 131 |
Finance income | (143 | ) | - |
(20,230 | ) | (16,588 | ) |
(Increase)/decrease in trade and other receivables | (2 | ) | 1,879 |
Increase in trade and other payables | 3,211 | 3,967 |
Cash generated from operations | (17,021 | ) | (10,742 | ) |
Company |
2022 | 2021 |
as restated |
£'000 | £'000 |
Loss before income tax | ( | ) | ( | ) |
Depreciation charges |
Loss on disposal of fixed assets |
Share options charge | 7,250 | 6,754 |
Investment and loan impaired or w/off | - | 7,712 |
Foreign exchange difference | (4,228 | ) | (466 | ) |
Net gain on investment | (162 | ) | - |
Amortisation charges | 1,008 | 295 |
Finance costs | 238 | 123 |
Finance income | (143 | ) | - |
(24,134 | ) | (13,618 | ) |
Decrease in trade and other receivables |
Increase/(decrease) in trade and other payables | ( | ) |
Cash generated from operations | ( | ) | ( | ) |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Statements of Cash Flows |
for the Year Ended 31 December 2022 |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Statements of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: |
Group | Company |
Year ended 31 December 2022 |
31/12/22 | 1/1/22 | 31/12/22 | 1/1/22 |
£'000 | £'000 | £'000 | £'000 |
Cash and cash equivalents | 35,705 | 45,909 | 31,970 | 44,407 |
Bank overdrafts | - | - |
35,705 | 45,909 | 44,407 |
Year ended 31 December 2021 |
31/12/21 | 1/1/21 | 31/12/21 | 1/1/21 |
as restated | as restated |
£'000 | £'000 | £'000 | £'000 |
Cash and cash equivalents | 45,909 | 6,111 | 44,407 | 5,248 |
3. | NOTES |
There was no requirement to produce a company statement of cash flows under FRS102 last year. This has now been included in the year ended 31.12.22 as the accounts have been prepared under IFRS but the company statement of cash flows remains unaudited. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements |
for the Year Ended 31 December 2022 |
1. | STATUTORY INFORMATION |
Huma Therapeutics Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparation |
These financial statements have been prepared in accordance with UK-adopted international accounting |
standards and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The accounts have been prepared on a going concern basis. |
For all periods up to and including the year ended 31 December 2021, the Group prepared its financial statements in accordance with Financial Reporting Standard 102 ("UK GAAP"). These financial statements for the year ended 31 December 2022 are the first the Group has prepared in accordance with IFRS. |
In adopting IFRS for the first time, the Group has applied IFRS 1. The impact on the balance sheet as at 1 January 2021 and as at 31 December 2021, and the income statement for the year ended 31 December 2021 as previously presented under UK GAAP has been documented with reconciliation between the IFRS and UK GAAP positions presented in Notes 34 and 35. The equity position at each of the previous year ends is also presented in that note. |
New and Revised Standards - IFRS in issue but not applied in the current financial statements |
The following IFRS and IFRIC Interpretations have been issued but have not been applied by the Group in preparing these financial statements, as they are not as yet effective. The Group intends to adopt these Standards and Interpretations when they become effective, rather than adopt them early. |
- Property, Plant and Equipment: Proceeds before intended use - Amendments to IAS 16 |
- Reference to the Conceptual Framework - Amendments to IFRS 3 |
- Onerous Contracts - Cost of Fulfilling a Contract - Amendments to IAS 37 |
- Annual Improvements to IFRS Standards 2018-2020 |
- Classification of Liabilities as Current or Non-current - Amendments to IAS 1 |
- Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2 |
- Definition of Accounting Estimates - Amendments to IAS 8- Deferred Tax related to Assets & Liabilities arising from a Single Transaction (Amendments IAS 12) |
- Sale or contribution of assets between an investor and its associate or joint venture - Amendments to IFRS 10 and IAS 28. |
The Directors are currently evaluating the impact of the adoption of all other standards, amendments and interpretations but do not expect them to have a material impact on the Group operation or results. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Basis of consolidation |
The Group financial statements consolidate those of the parent company and all of its subsidiaries as of 31 December 2022. All subsidiaries have a reporting date of 31 December. |
Subsidiaries are all entities that the Group owns 100% of the share capital and over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. |
Intercompany transactions, unrealised gains and losses on intragroup transactions and balances between group companies are eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. |
Going concern |
The going concern disclosures presented within the Directors' Report should be read in conjunction with this note. |
In making their assessment of going concern, as described in the Directors' Report, the directors have considered detailed forecasts of expected revenues, expenditure and cash flows and taken into consideration existing banking facilities of the wider group. |
Since the year end, by June 2023, there was ongoing funding round whereby £16,173k funds had been signed and received from investors. |
The directors are of the opinion that the group has sufficient funds available to finance its operations for the foreseeable future following the date of approval of these financial statements and accordingly have prepared the financial statements on the going concern basis. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Revenue recognition |
Revenue is recognised to depict the transfer of promised services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those services. |
To determine whether to recognise revenue, the Group follows a 5-step process from the principals of IFRS 15 "Revenue from Contracts with Customers": |
1. Identifying the contract with a customer |
2. Identifying the performance obligations |
3. Determining the transaction price |
4. Allocating the transaction price to the performance obligations, and then |
5. Recognising revenue when/as performance obligation(s) are satisfied. |
The Group often enters into customer contracts to supply a bundle of products and services, for example hardware, software and related after-sales service. The contract is then assessed to determine whether it contains a single combined performance obligation or multiple performance obligations. If applicable the total transaction price is allocated amongst the various performance obligations based on their relative stand-alone selling prices. |
Revenue is recognised either at a point in time or over time, when (or as) the Group satisfies performance obligations by transferring the promised goods or services to its customers. |
The Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as other liabilities in its consolidated statement of financial position. Similarly, if the Group satisfies a performance obligation before it receives the consideration, the Group recognises either a contract asset or a receivable in its consolidated statement of financial position, depending on whether something other than the passage of time is required before the consideration is due. |
In principle, revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction will flow into the Group and that the revenue can be reliably measured. Revenue is measured at the fair value of the consideration receivable net of trade discounts and VAT. |
The Group has elected to use the practical expedient to recognise the incremental costs of obtaining a contract as an expense when incurred if the amortisation period of the asset that would otherwise be recognised is one year or less. |
Revenue is derived from the provision of software solutions (via rights of access to Huma Group technology), the sale of messaging services through certain software solutions, the development of bespoke software solutions, provision of medical staff, delivery of specific medical devices and revenue from contracts with Partners. On 28 December 2022, through its acquisition of Alcedis GmbH, the Group also expanded the services it offers within clinical trials (however this has not had a material impact on the 2022 revenues due to the timing of the acquisition so close to the year end). |
Software solutions (right to use licences & related services) |
Revenue from standard licensed products is recognised from the point at which the customer gains control and the right to use our software. This right to use software will be for the period covered under contract and as a result, the licensed software revenue will be recognised over the life of the contract. This policy is consistent with the Group's products providing customers with a series of services through the delivery of, and access to, software solutions (Software-as-a-Service (SaaS)), and results in revenue being recognised pro-rata over the period that these services are provided to customers. These services included the management of software applications for customers in the cloud, third-line technical support and continuous updates and upgrades throughout the subscription period. The transaction price allocated to these services is pre-agreed with the customer. Revenue is recognised as a contract liability at the time of receipt of payment and is released on a straight-line basis over the contracted term in line with the estimated delivery of performance obligations. |
Messaging services |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Messaging services are also considered to be part of the right of access service, as a subscription is required to be able to use the messages. The message bundles are recognised in revenue at point in time increments depending on usage each month. Message bundles are lost if there is no active subscription and these will also be recognised in revenue. |
Development services |
The Group provides bespoke clinical development services to Med-tech and Pharmaceutical customers through is Companion Apps and Decentralised Clinical Trials. A technical analysis of each contract with customers is performed individually in accordance with the IFRS 15 five-step process for revenue recognition, which includes, but not limited to, the determination as to whether consideration from contracts with customers is recognised at a point in time or over time. |
For fixed-fee contracts where it is determined to recognise revenue over time, revenue is recognised based on the actual service provided to the end of the financial year as a proportion of the total services to be provided. |
Revenue is recognised in line with percent completed in terms of effort to date as a percentage of total forecast effort. Total forecast is prepared and reviewed by project managers on a monthly basis and further reviewed by the finance team and senior management team on a monthly basis. Revenue is recognised in this manner for fixed-fee contracts because the customer controls the asset at any stage of the contract through either the ownership of the underlying intellectual property, or has exclusive rights over the development results, or because the Group will periodically have to update the customer with the results of its work. In certain contracts, the Group has no alternative use from the asset it has created, and has a legally enforceable right to payment for work performed to date. Estimates of extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known by management. |
In certain contracts, payment for services is not due from the customer unless milestones have been achieved or the project is complete, therefore, a contract asset is recognised over the period in which the services are performed representing the Group's right to consideration for the services performed to date. |
Should any contracts contain non-standard clauses, revenue recognition will be in accordance with the underlying contractual terms which will normally result in recognition of revenue being deferred until all material obligations are satisfied. Where the Group has any contracts where a financing component exists within the contract the present value of the financing component is calculated and amortised over the contract period. The interest is recognised as finance income. |
Provision of staffing |
Where contracts with customers for software solutions include the provision of medical staff, revenue is recognised over time as the service is provided. |
Hardware/devices |
Where the sale of a software solution includes the provision of third party devices, these are considered a separate performance obligation to the main software solution, and revenue is recognised at a point in time, being the point at which the physical devices have been delivered. |
Revenue from Partners |
This represents revenue from relationships with pharmacies for prescription referrals. Revenue is earned on initial use by a patient and again on the anniversary of an "active" patient. The contract with the partner sets out the rates for referrals, but these are only due on completion of the respective milestone, therefore revenue is recognised at a point in time on achievement of the relevant milestone. |
Contract assets are included in 'Accrued income' within trade and other receivables and Contract liabilities are included in 'Deferred income' within trade and other payables. |
Payment terms and conditions in customer contracts may vary. In some cases, customers pay in advance of the delivery of solutions or services; in other cases, payment is due as services are performed or in arrears following the delivery of the solutions or services. Differences in timing between revenue recognition and invoicing result in trade receivables, contract assets or contract liabilities in the statement of financial position. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Contract assets refer to accrued income and arise when revenue is recognised, but invoicing is contingent on performance of other performance obligations or on completion of contractual milestones. Contract assets are transferred to receivables when the rights become unconditional, typically upon invoicing of the related performance obligations in the contract or upon achieving the requisite project milestone. |
Contract liabilities refer to deferred income and result from customer payments in advance of the satisfaction of the associated performance obligations and relate primarily to prepaid support or other recurring services. Deferred income is released as revenue is recognised. |
Goodwill |
Goodwill represents the future economic benefits arising from a business combination that are not individually identified and separately recognised. Goodwill acquired in business combinations is not amortised. Instead, goodwill 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. |
Impairment testing |
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. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. An impairment loss is reversed if the asset's or cash-generating unit's recoverable amount exceeds its carrying amount. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Intangible assets |
(i) Patents and licences |
Patents and licences are initially measured at cost. After initial recognition, patents and licences are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
(ii) Development costs |
Expenditure on research is written off in the period in which it is incurred. Development expenditure incurred on specific projects is capitalised where management is satisfied that the following criteria have been met: |
- it is technically feasible to complete the development project so that it will be available for use; |
- management intends to complete the development project and use or sell it; |
- there is an ability to use or sell the development project; |
- it can be demonstrated how the development project will generate probable future economic benefits; |
- adequate technical, financial and other resources to complete the development and to use or sell the development output are available; and |
- the expenditure attributable to the project during its development can be reliably measured. |
Directly attributable costs that are capitalised as part of the development project include the development employee costs and an appropriate portion of relevant overheads. |
Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. |
(iii) Computer software |
Computer software are initially measured at cost. After initial recognition, computer software are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
(iv) Customer contracts |
Customer contracts acquired as part of a business combination are recognised at fair value if they are project specific and there is a level of certainty that there will be future recovery. Customer contracts are amortised over the perceived period that they will generate economic benefits. This is calculated using in depth analysis of future revenue from cash flow forecasts. |
(iv) Customer relationships |
Customer relationships acquired as part of a business combination are recognised at fair value if they are specific and there is a level of certainty that there will be future recovery. Customer relationships are amortised over the perceived period that they will generate economic benefits. This is calculated using in depth analysis of future revenue from cash flow forecasts. |
Amortisation is provided at the following annual rates: |
Patents and licences - Straight line over their estimated useful life of ten years |
Development costs - Straight line over their estimated useful life of three and ten years |
Computer software - Straight line over their estimated useful life of three, five and ten years |
Customer contracts - Straight line over their estimated useful life of three years and five years |
Customer relationships - Straight line over their estimated useful life of five years and seventeen years |
Property, plant and equipment |
Short leasehold | - | Straight line over the life of the lease |
Improvements to property | - |
Plant and machinery | - |
Fixtures and fittings | - |
Computer equipment | - |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
Recognition, initial measurement and derecognition |
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs that are directly attributable to the acquisition of the financial asset. Subsequent measurement of financial assets and financial liabilities is described below. |
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires. |
Classification and subsequent measurement of financial assets |
The Group classifies its financial assets in the following measurement categories: |
- those to be measured subsequently at fair value (either through OCI or through profit or loss), and |
- those to be measured at amortised cost. |
The classification depends on the entity's business model for managing the financial assets and the contractual terms of the cash flows. |
For the purpose of subsequent measurement, financial assets are classified into the following categories upon initial recognition: |
Trade and other receivables |
Trade and other receivables are recognised initially at fair value, which is generally the original invoice amount, and subsequently measured at amortised cost using the effective interest method, less provision for impairment. The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. |
Investments |
Investments are classified as financial assets measured at fair value through profit or loss. Current investments represent investments that are held on a short-term basis and are available to be converted to cash in the short-term. The non-current investments are not held for trading and the Group has elected to hold at fair value through profit or loss. The Group subsequently measures all equity investments at fair value, with the movements recognised in the statement of profit or loss. |
Cash and cash equivalents |
Cash and cash equivalents comprise cash in hand and current balances with banks and similar institutions, which are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value and have an original maturity of three months or less. |
Classification and subsequent measurement of financial liabilities |
The Group's financial liabilities include trade and certain other payables. Financial liabilities are measured subsequently at amortised cost using the effective interest method. |
Trade payables |
Trade payables are recognised initially at fair value, which is generally the original invoice value, and subsequently measured at amortised cost using the effective interest method. These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial period which are unpaid. |
Interest-bearing loans and other borrowings |
Interest-bearing loans and other borrowings are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. Amortised cost is calculated by taking into account any issue costs, discount or premium. The difference between the proceeds (net of directly attributable transactions costs) and the redemption value is recognised in finance costs over the period of the borrowings. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk |
Convertible loan notes |
Convertible loan notes are initially recognised at the fair value, net of transaction costs incurred. The fair value of the liability portion of a convertible loan note is determined using a market interest rate for an equivalent non-convertible bond. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the notes. The remainder of the proceeds is allocated to the conversion option. This is recognised and included in shareholders' equity, net of income tax effects, or as a derivative financial liability where the conversion fails the fixed for fixed test. |
The convertible loan notes are subsequently measured at fair value in their entirety, with the host debt contract and derivative financial liability not being separated. Where the terms of a convertible loan note are exercised and the entity issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued. |
Taxation and deferred taxation |
The income tax expense or income for the year is the tax payable on the current year's taxable income. This is based on the national income tax rate enacted or substantively enacted with any adjustment relating to tax payable in previous years and changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the Financial Statements. |
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applicable when the asset or liability crystallises based on current tax rates and laws that have been enacted or substantively enacted by the reporting date. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. |
A deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits against which to recover carried forward tax losses and from which the future reversal of temporary differences can be deducted. The carrying amount of deferred tax assets are reviewed at each reporting date. |
Deferred tax liabilities are generally recognised in full, although IAS 12 'Income Taxes' specifies limited exemptions. As a result of these exemptions the Group does not recognise deferred tax on temporary differences relating to goodwill, or to its investments in subsidiaries. Temporary differences associated with investments in subsidiaries is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future. |
Tax credits will not be recognised until there is a reasonable assurance that the obligations under the tax legislation will be satisfied. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Foreign currencies |
(i) Functional and presentation currency |
Items included in the Financial Statements are measured using the currency of the primary economic environment in which entities operate ('the functional currency'). The Financial Statements are presented in sterling, which is the Parent Company's functional and presentation currency. There has been no change in the functional currency during the current or preceding period. |
(ii) Transactions and balances |
Transactions in foreign currencies are translated into sterling using daily exchange rates. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rates ruling at the balance sheet date and any exchange differences arising are taken to profit or loss. |
Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the exchange rates at the transaction date), except for non-monetary items measured at fair value which are translated using the exchange rates at the date when fair value was determined. |
(iii) Foreign operations |
In the Group's financial statements, all assets, liabilities and transactions of Group entities with a functional currency other than the GBP are translated into GBP upon consolidation. The functional currency of the entities in the Group has remained unchanged during the reporting period |
On consolidation, assets and liabilities have been translated into GBP at the closing rate at the reporting date. Goodwill and fair value adjustments arising on the acquisition of a foreign entity have been treated as assets and liabilities of the foreign entity and translated into GBP at the closing rate. Income and expenses have been translated into GBP at the average rate over the reporting period. Exchange differences arising from significant foreign subsidiaries are charged or credited to other comprehensive income and recognised in the currency translation reserve in equity. On disposal of a foreign operation, the related cumulative translation differences recognised in equity would be reclassified to profit or loss and are recognised as part of the gain or loss on disposal. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Leases |
For any new contracts entered into the Group considers whether a contract is, or contains a lease. A lease is defined as a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. To apply this definition the Group assesses whether the contract meets three key evaluations which are whether: |
- the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group |
- the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract |
- the Group has the right to direct the use of the identified asset throughout the period of use. The Group assess whether it has the right to direct how and for what purpose the asset is used throughout the period of use. |
Measurement and recognition of leases as a lessee |
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received). |
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: |
- fixed payments (including in-substance fixed payments), less any lease incentives receivable; |
- variable lease payments that are based on an index or a rate; |
- amounts expected to be payable by the lessee under residual value guarantees; |
- the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and |
- payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option. |
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. |
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available. If that rate cannot be readily determined, which is generally the case for leases in the Group, the Group's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. The incremental borrowing rate ranges between 4.0% to 6.5%. |
To determine the incremental borrowing rate, the Group: |
- where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third-party financing was received |
- uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the Group, which does not have recent third-party financing, and |
- makes adjustments specific to the lease, eg term, country, currency and security. |
Where the Group is exposed to potential future increases in variable lease payments based on an index or rate, these are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset. |
Subsequent to initial measurement, lease payments are allocated between principal, which reduces the liability, and finance cost. The finance cost is charged to the statement of comprehensive income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. |
Right-of-use assets are measured at cost comprising the following: |
- the amount of the initial measurement of lease liability; |
- any lease payments made at or before the commencement date less any lease incentives received; |
- any initial direct costs; and |
- restoration costs. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life. The Group also assesses the right-of-use asset for impairment when such indicators exist. |
The Group has elected to account for short-term leases and leases of low value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term. |
The right-of-use assets and lease liabilities have been disclosed separately on the face of the Statement of Financial Position, within Non-current assets and across Current & Non-current liabilities respectively. |
Employee benefit costs |
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to the income statement in the period to which they relate. |
Grants |
Grant income during the period has been accounted for using the performance model. Where a grant imposes specified future performance-related conditions on the recipient, income is recognised only when the performance-related conditions are met. |
Provisions |
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses. |
Provisions are the best estimate of the expenditure required to settle the obligation at the current reporting date. |
Equity |
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received net of direct issue costs. |
The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits. |
The ordinary share capital account represents the amount subscribed for shares at nominal value. |
Where the Company purchases its own equity instruments, for example as the result of a share buy-back, the consideration paid, including any directly attributable incremental costs (net of income taxes), is deducted from equity attributable to the owners of the Company and sits within the capital redemption reserve. |
Retained earnings include all results as disclosed in the statement of comprehensive income. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Share based payment |
The grant date fair value of share-based payments awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period in which the employees become unconditionally entitled to the awards. The fair value of the awards granted is measured using an option valuation model, taking into account the terms and conditions upon which the awards were granted. The amount recognised as an expense is adjusted to reflect the actual number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. |
Share-based payment transactions in which the company receives goods or services by incurring a liability to transfer cash or other assets that is based on the price of the company's equity instruments are accounted for as cash-settled share-based payments. The fair value of the amount payable to employees is recognised as an expense, with a corresponding increase in liabilities, over the period in which the employees become unconditionally entitled to payment. The liability is remeasured at each balance sheet date and at settlement date. Any changes in the fair value of the liability are recognised as a personnel expense in profit or loss. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
3. | SIGNIFICANT ESTIMATES AND JUDGEMENTS |
The preparation of these financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. |
Judgements and estimates are continually evaluated and are based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances. |
Expectation makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. |
Judgements |
(i) Capitalisation of development costs |
Development costs are capitalised only after the technical and commercial feasibility of the asset for sale or use have been established. This is determined by our intention to complete and/or use the intangible asset. The future economic benefits of the asset are reviewed using detailed cash flow projections. The key judgement is whether there will be a market for the products once they are available for sale. |
(ii) Revenue Recognition |
Revenue is recognised on the basis of implementation of the project. In respect of long term contracts, the revenue is recognised in line with percentage completed in terms of effort to date as a percentage of total forecast effort. The key judgement is accurately forecasting the effort required to complete the project. |
(iii) Convertible loan notes |
The loan element and conversion option were issued at their combined fair value in late December 2022 and recorded as a single financial instrument, rather than being separated into constituent loans and conversion options. The fair value of the derivative financial instrument at subsequent reporting dates was to be calculated by calculating the fair value of derivative financial instrument in accordance with the requirements of IFRS 13. At the 31 December 2022, a full revaluation was not performed as the time period from initial recognition to 31 December 2022 was so short, that management felt the fair value would not be materially different to the underlying interest charge, which was taken as an approximation to the change in fair value since initial recognition. |
Estimates |
(i) Business combinations |
Management uses valuation techniques in determining the fair values of various elements of a business combination. |
On initial recognition, the assets and liabilities of the acquired business are included in the consolidated statement of financial position at their provisional fair values. In measuring fair value, management uses estimates about future cash flows and discount rates. |
(ii) Depreciation and amortisation |
Depreciation and amortisation rates are based on estimates of the useful economic lives and residual values of the assets involved. The assessment of these useful economic lives is made by projecting the economic lifecycle of the asset. The key judgement is estimating the useful economic life of the development costs capitalised due to the uncertainties of changes in the market and competitor products. A review is conducted annually by project and depreciation and amortisation rates are changed where economic lives are re-assessed and technically obsolete items written off where necessary. |
(iii) Impairment of goodwill and intangible assets |
The Group assesses, at each reporting date, whether there is an indication that an asset or an acquired cash-generating unit may be impaired. The Group estimates the asset's recoverable amount, which is determined based on the higher of the assets fair value less costs of disposal, and its value in use. In assessing the value in use, the company has made an estimate of future cash flows attributable to the acquired cash-generating unit and discounted these cash flows as an appropriate rate in order to calculate the present value of these cash flows. Details of the carrying values and the impairment reviews performed are provided in note 9. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
4. | EMPLOYEES AND DIRECTORS |
2022 | 2021 |
as restated |
£'000 | £'000 |
Wages and salaries | 15,660 | 9,337 |
Social security costs | 2,094 | 1,118 |
Other pension costs | 325 | 153 |
18,079 | 10,608 |
The average number of employees during the year was as follows: |
2022 | 2021 |
as restated |
Commercial, Delivery & Operations | 73 | 58 |
Design, Product & AI | 40 | 39 |
Engineering | 44 | 39 |
Business Excellence | 34 | 28 |
Directors | 6 | 6 |
The remuneration for the key management personnel amounted to £1,460k (2021: £1,149k). |
Share option charges relating to key management personnel amounted to £4,115k (2021: £1,453k). |
2022 | 2021 |
as restated |
£ | £ |
Directors' remuneration | 218,000 | 150,922 |
Directors' pension contributions to money purchase schemes | 1,589 | 1,134 |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes | 3 | 3 |
Information regarding the highest paid director for the year ended 31 December 2022 is as follows: |
2022 |
£ |
Emoluments etc | 139,000 |
Pension contributions to money purchase schemes | 1,321 |
This note relates to the staff costs in the consolidated detailed statement of profit or loss. |
5. | NET FINANCE COSTS |
2022 | 2021 |
as restated |
£'000 | £'000 |
Finance income: |
Other fixed asset invest - |
Franked Investment Income | 143 | - |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
5. | NET FINANCE COSTS - continued |
2022 | 2021 |
as restated |
£'000 | £'000 |
Finance costs: |
Loan interest | 216 | 116 |
Interest payable | - | 8 |
Interest on underpaid tax | 1 | - |
Lease interest paid | 50 | 7 |
267 | 131 |
Net finance costs | 124 | 131 |
6. | LOSS BEFORE INCOME TAX |
The loss before income tax is stated after charging/(crediting): |
2022 | 2021 |
as restated |
£'000 | £'000 |
Leases | 30 | 164 |
Depreciation - owned assets | 630 | 315 |
Loss on disposal of fixed assets | 329 | 69 |
Goodwill impairment | - | 1,537 |
Patents and licences amortisation | 29 | 30 |
Development costs & computer software amortisation | 2,188 | 32 |
Customer relationships and contracts amortisation | 3,936 | - |
Auditors' remuneration | 89 | 38 |
Foreign exchange differences | (5,073 | ) | (1,324 | ) |
Leases included in the statement of profit or loss relate to short-term and low-value assets. |
7. | INCOME TAX |
Analysis of tax income |
2022 | 2021 |
as restated |
£'000 | £'000 |
Current tax: |
Tax | 41 | (1,471 | ) |
Adjustments in respect of |
previous periods | (210 | ) | (190 | ) |
Total current tax | (169 | ) | (1,661 | ) |
Deferred tax | (338 | ) | - |
Total tax income in consolidated statement of profit or loss | (507 | ) | (1,661 | ) |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
7. | INCOME TAX - continued |
Factors affecting the tax expense |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2022 | 2021 |
as restated |
£'000 | £'000 |
Loss before income tax | (31,431 | ) | (24,964 | ) |
Loss multiplied by the standard rate of corporation tax in the UK of 19 % (2021 - 19 %) | (5,972 | ) | (4,743 | ) |
Effects of: |
Depreciation in excess of capital allowances | 474 | 920 |
Income and expenses not allowable for tax purposes | 1,676 | 2,167 |
Deferred tax | (338 | ) | - |
R & D Enhanced deduction | - | (1,044 | ) |
R&D Tax credit | - | (1,469 | ) |
Unutilised loss for the year carried forward | 3,760 | 1,278 |
Adjustments in respect of previous periods | (210 | ) | (184 | ) |
Subsidiary Tax and adjustments | 103 | (433 | ) |
Tax credit adjustment to trading losses | - | 1,847 |
Tax income | (507 | ) | (1,661 | ) |
As at 31 December 2022, the Group had carry forward trading tax losses of £48,339k (2021: £28,577k). Included in this is the parent's carry forward trading tax losses of £41,091k (2021: 21,300k). Also, see note 33 for contingent asset in relation to the R&D claim for 2022. |
Factors that may affect future tax charges |
In the March 2021 Budget it was announced that the UK corporation tax rate would increase to 25% from 1 April 2023 for profits over £250,000. There are no other significant factors that may affect future tax charges. |
8. | LOSS OF PARENT COMPANY |
As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not presented as part of these financial statements. The parent company's loss for the financial year was £(28,737,185) (2021 - £(26,642,786)). |
9. | PRIOR YEAR ADJUSTMENT |
During the preparation of the financial statements for Huma Therapeutics Limited consolidated accounts to 31 December 2022, it was identified that for the year ended 31 December 2021, £1.7m in relation to Share options was incorrectly included in the Goodwill and Share options reserve on acquisition of a subsidiary. This has now been updated, resulting in a decrease in Goodwill and Share options reserve in 2021 with no effect to Retained Earnings. |
In the parent company for the year ended 31 December 2021, £1.7m in relation to Share options was incorrectly included in Investments and Share options reserve on acquisition of a subsidiary. This has now been updated, resulting in a decrease in Investment and Share options reserve in 2021 with no effect to Retained Earnings. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
10. | REVENUE |
The various sources of income received during the years in 2022 and 2021 are as follows: |
An analysis of revenue by type is given below: |
31/12/22 | 31/12/21 |
£'000 | £'000 |
Software solutions | 5,954 | 1,939 |
Development services | 4,739 | 3,061 |
Messaging services | 1,572 | - |
Other | 422 | 307 |
Total | 12,687 | 5,307 |
Revenues for Software solutions and development services are all recognised over time. Messaging services and an element of Other revenues are recognised at a point in time. |
An analysis of revenue by geographical market is given below: |
31/12/22 | 31/12/21 |
£'000 | £'000 |
United Kingdom | 10,675 | 1,769 |
Europe | 200 | 1,050 |
United States of America | 1,605 | 2,300 |
Rest of the world | 207 | 188 |
Total | 12,687 | 5,307 |
11. | GOODWILL |
Group |
£'000 |
COST |
At 1 January 2022 | 11,782 |
Additions | 6,121 |
At 31 December 2022 | 17,903 |
AMORTISATION |
At 1 January 2022 |
and 31 December 2022 | 1,808 |
NET BOOK VALUE |
At 31 December 2022 | 16,095 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
11. | GOODWILL - continued |
Group |
£'000 |
COST |
At 1 January 2021 | 1,808 |
Additions | 9,974 |
At 31 December 2021 | 11,782 |
AMORTISATION |
At 1 January 2021 | 271 |
Impairments | 1,537 |
At 31 December 2021 | 1,808 |
NET BOOK VALUE |
At 31 December 2021 | 9,974 |
The carrying value of goodwill included within the Group balance sheet is £16,095 (2021: £9,974), |
which relates to the goodwill from the acquisitions of iPlato (£9,974) and Alcedis (£6,121k). |
Impairment testing |
The value in use of the iPlato acquisition cash-generating unit ("CGU") has been calculated based on discounted future cash flows of the iPlato Group including a terminal value. The future cash flows are based on the group's 2023 budget and forecasts for a further four years to 31 December 2027, as approved by the Board, with a 2% long term growth rate applied to the period beyond 31 December 2028. A discount rate of 12.3% has been used within the value in use calculation as advised by external experts. |
Using the discounted future cash flows, there is significant headroom above the carrying value of the cash-generating unit and therefore no impairment exists. |
The calculations show that a reasonably probable change scenario, as assessed by the directors, would not cause the carrying amount of the CGU to exceed its recoverable amount. |
Management decided that a specific value in use assessment of the Alcedis acquisition CGU was not required as the acquisition completion date of 28th December 2022 was so close to the year end and it was deemed that there had not been significant change in valuation conditions in the final 3 days of the year. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
12. | INTANGIBLE ASSETS |
Group |
Development | Customer |
Patents | costs & | relationships |
and | computer | and |
licences | software | contracts | Totals |
£'000 | £'000 | £'000 | £'000 |
COST |
At 1 January 2022 | 615 | 11,878 | 2,940 | 15,433 |
Additions | 137 | 6,864 | 23,078 | 30,079 |
Disposals | (536 | ) | (67 | ) | - | (603 | ) |
Acquisitions through business |
combinations | - | 6,835 | 4,388 | 11,223 |
Exchange differences | - | - | 460 | 460 |
At 31 December 2022 | 216 | 25,510 | 30,866 | 56,592 |
AMORTISATION |
At 1 January 2022 | 219 | 49 | - | 268 |
Amortisation for year | 29 | 2,188 | 3,936 | 6,153 |
Eliminated on disposal | (240 | ) | (40 | ) | - | (280 | ) |
Exchange differences | - | - | 121 | 121 |
At 31 December 2022 | 8 | 2,197 | 4,057 | 6,262 |
NET BOOK VALUE |
At 31 December 2022 | 208 | 23,313 | 26,809 | 50,330 |
Development | Customer |
Patents | costs & | relationships |
and | computer | and |
licences | software | contracts | Totals |
£'000 | £'000 | £'000 | £'000 |
COST |
At 1 January 2021 | 295 | 87 | - | 382 |
Additions | 193 | (14 | ) | - | 179 |
Disposals | (38 | ) | - | - | (38 | ) |
Acquisitions through business |
combinations | - | 11,805 | 2,940 | 14,745 |
Impairments | 165 | - | - | 165 |
At 31 December 2021 | 615 | 11,878 | 2,940 | 15,433 |
AMORTISATION |
At 1 January 2021 | 24 | 17 | - | 41 |
Amortisation for year | 30 | 32 | - | 62 |
Impairments | 165 | - | - | 165 |
At 31 December 2021 | 219 | 49 | - | 268 |
NET BOOK VALUE |
At 31 December 2021 | 396 | 11,829 | 2,940 | 15,165 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
12. | INTANGIBLE ASSETS - continued |
Group |
Customer relationships and contracts for the Group are broken down as per below. During the year 2022, the Group signed agreements with a large multi-national customer whereby the Company issued shares in return for signed customer contracts and service agreements to work in partnership on future projects: |
As at 31.12.22 | Customer relationships | Customer contracts | Total |
£'000 | £'000 | £'000 |
Cost | 23,657 | 7,209 | 30,866 |
Amortisation | (3,169 | ) | (888 | ) | (4,057 | ) |
Net Book Value | 20,488 | 6,321 | 26,809 |
Acquisition of customer relationships and contracts |
Management identified and valued the acquired customer relationships and contracts during the period at £20,563k and £2,578k respectively. Management has applied judgements in this valuation and has used a net present value model of future cash flows to value the acquired customer relationships and contracts. There are a number of assumptions in estimating the present value of future cash flows including management's expectation of future revenue, timing and quantum of expenditure, growth rates over the next 9 years and discount rates, amending any of these would result in an impairment or increased amortisation charge. Assumptions are made on the useful economic life of this intangible asset and if shortened, would increase the amortisation charge recognised in the income statement. The key assumptions include: |
- discount rate applied of 7% |
- Underlying compound annual revenue growth rate to year of 60.8% |
Impairment of the contract relationship intangible asset |
The carrying value of the contract relationship intangible asset is assessed when there is an indicator for impairment. At the time of acquiring the asset, management were aware that certain customisation was necessary prior to releasing it to the market. Given the nature of the investment being in its early stages, revenue and cost projections used in the future cash flows to derive fair value cannot be substantiated by comparison with independent markets and may not be capable of being realised immediately. |
Management has therefore concluded that the acquisition model has been used for the impairment test. This is because although the product is now ready for launch, it is too early to assess whether there is an impairment over the asset. As such, the value of the contract relationship intangible asset on acquisition is not impaired as of the Balance Sheet date. Management note that where there are no current and no short term future earnings or positive cash flows, this is the best indicator of fair value. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
12. | INTANGIBLE ASSETS - continued |
Company |
Development | Customer |
Patents | costs & | relationships |
and | computer | and |
licences | software | contracts | Totals |
£'000 | £'000 | £'000 | £'000 |
COST |
At 1 January 2022 |
Additions |
Disposals | ( | ) | ( | ) |
At 31 December 2022 |
AMORTISATION |
At 1 January 2022 |
Amortisation for year |
Eliminated on disposal | ( | ) | ( | ) |
At 31 December 2022 |
NET BOOK VALUE |
At 31 December 2022 |
At 31 December 2021 |
Development |
Patents | costs & |
and | computer |
licences | software | Totals |
£'000 | £'000 | £'000 |
COST |
At 1 January 2021 |
Additions | ( | ) |
Disposals | ( | ) | ( | ) |
At 31 December 2021 |
AMORTISATION |
At 1 January 2021 |
Amortisation for year |
At 31 December 2021 |
NET BOOK VALUE |
At 31 December 2021 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
13. | PROPERTY, PLANT AND EQUIPMENT |
Group |
Improvements |
Short | Right-of-use | to |
leasehold | assets | property |
£'000 | £'000 | £'000 |
COST |
At 1 January 2022 | 25 | 768 | 56 |
Additions | - | 591 | 28 |
Disposals | - | - | - |
Acquisitions through business combination | - | 787 | - |
Reclassification/transfer | - | - | - |
At 31 December 2022 | 25 | 2,146 | 84 |
DEPRECIATION |
At 1 January 2022 | 23 | 172 | 51 |
Charge for year | 2 | 500 | 9 |
Eliminated on disposal | - | - | - |
Exchange differences | - | - | - |
Reclassification/transfer | - | - | - |
At 31 December 2022 | 25 | 672 | 60 |
NET BOOK VALUE |
At 31 December 2022 | - | 1,474 | 24 |
Fixtures |
Plant and | and | Computer |
machinery | fittings | equipment | Totals |
£'000 | £'000 | £'000 | £'000 |
COST |
At 1 January 2022 | 3 | 16 | 165 | 1,033 |
Additions | - | 8 | 263 | 890 |
Disposals | (3 | ) | (1 | ) | (19 | ) | (23 | ) |
Acquisitions through business combination | - | 214 | - | 1,001 |
Reclassification/transfer | - | - | 27 | 27 |
At 31 December 2022 | - | 237 | 436 | 2,928 |
DEPRECIATION |
At 1 January 2022 | 1 | 12 | 43 | 302 |
Charge for year | - | 4 | 115 | 630 |
Eliminated on disposal | (1 | ) | (2 | ) | (15 | ) | (18 | ) |
Exchange differences | - | - | 15 | 15 |
Reclassification/transfer | - | - | 27 | 27 |
At 31 December 2022 | - | 14 | 185 | 956 |
NET BOOK VALUE |
At 31 December 2022 | - | 223 | 251 | 1,972 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
13. | PROPERTY, PLANT AND EQUIPMENT - continued |
Group |
Improvements |
Short | Right-of-use | to |
leasehold | assets | property |
£'000 | £'000 | £'000 |
COST |
At 1 January 2021 | 25 | 215 | 56 |
Additions | - | 553 | - |
At 31 December 2021 | 25 | 768 | 56 |
DEPRECIATION |
At 1 January 2021 | 17 | - | 33 |
Charge for year | 6 | 172 | 18 |
Eliminated on disposal | - | - | - |
Reclassification/transfer | - | - | - |
At 31 December 2021 | 23 | 172 | 51 |
NET BOOK VALUE |
At 31 December 2021 | 2 | 596 | 5 |
Fixtures |
Plant and | and | Computer |
machinery | fittings | equipment | Totals |
£'000 | £'000 | £'000 | £'000 |
COST |
At 1 January 2021 | 1 | 98 | 319 | 714 |
Additions | 1 | 1 | 91 | 646 |
Disposals | - | (80 | ) | (274 | ) | (354 | ) |
Acquisitions through business combination | 1 | - | 26 | 27 |
Reclassification/transfer | - | (3 | ) | 3 | - |
At 31 December 2021 | 3 | 16 | 165 | 1,033 |
DEPRECIATION |
At 1 January 2021 | - | 60 | 193 | 303 |
Charge for year | 1 | 26 | 92 | 315 |
Eliminated on disposal | - | (72 | ) | (244 | ) | (316 | ) |
Reclassification/transfer | - | (2 | ) | 2 | - |
At 31 December 2021 | 1 | 12 | 43 | 302 |
NET BOOK VALUE |
At 31 December 2021 | 2 | 4 | 122 | 731 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
13. | PROPERTY, PLANT AND EQUIPMENT - continued |
Company |
Improvements |
Short | Right-of-use | to |
leasehold | assets | property |
£'000 | £'000 | £'000 |
COST |
At 1 January 2022 |
Additions |
Disposals |
At 31 December 2022 |
DEPRECIATION |
At 1 January 2022 |
Charge for year |
At 31 December 2022 |
NET BOOK VALUE |
At 31 December 2022 |
At 31 December 2021 |
Fixtures |
and | Computer |
fittings | equipment | Totals |
£'000 | £'000 | £'000 |
COST |
At 1 January 2022 |
Additions |
Disposals | ( | ) | ( | ) |
At 31 December 2022 |
DEPRECIATION |
At 1 January 2022 |
Charge for year |
At 31 December 2022 |
NET BOOK VALUE |
At 31 December 2022 |
At 31 December 2021 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
13. | PROPERTY, PLANT AND EQUIPMENT - continued |
Company |
Improvements |
Short | Right-of-use | to |
leasehold | assets | property |
£'000 | £'000 | £'000 |
COST |
At 1 January 2021 |
At 31 December 2021 |
DEPRECIATION |
At 1 January 2021 |
Charge for year |
Eliminated on disposal |
Reclassification/transfer |
At 31 December 2021 |
NET BOOK VALUE |
At 31 December 2021 |
Fixtures |
and | Computer |
fittings | equipment | Totals |
£'000 | £'000 | £'000 |
COST |
At 1 January 2021 |
Additions |
Disposals | ( | ) | ( | ) | ( | ) |
Reclassification/transfer | ( | ) |
At 31 December 2021 |
DEPRECIATION |
At 1 January 2021 |
Charge for year |
Eliminated on disposal | ( | ) | ( | ) | ( | ) |
Reclassification/transfer | ( | ) |
At 31 December 2021 |
NET BOOK VALUE |
At 31 December 2021 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
14. | INVESTMENTS |
Group |
Promissory |
Notes |
£'000 |
COST |
Reclassification/transfer | 74 |
At 31 December 2022 | 74 |
NET BOOK VALUE |
At 31 December 2022 | 74 |
Shares in |
group |
undertakings |
£'000 |
COST |
At 1 January 2021 | 23 |
Reclassification/transfer | (23 | ) |
At 31 December 2021 | - |
NET BOOK VALUE |
At 31 December 2021 | - |
Company |
Shares in |
group | Promissory |
undertakings | Notes | Totals |
£'000 | £'000 | £'000 |
COST |
At 1 January 2022 | 15,082 | - | 15,082 |
Additions | 20,598 | - | 20,598 |
Reclassification/transfer | - | 74 | 74 |
At 31 December 2022 | 35,680 | 74 | 35,754 |
PROVISIONS |
At 1 January 2022 |
and 31 December 2022 | 2,701 | - | 2,701 |
NET BOOK VALUE |
At 31 December 2022 | 32,979 | 74 | 33,053 |
At 31 December 2021 | 12,381 | - | 12,381 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
14. | INVESTMENTS - continued |
Company |
Shares in |
group |
undertakings |
£'000 |
COST |
At 1 January 2021 | 2,725 |
Additions | 12,359 |
Exchange differences | (2 | ) |
At 31 December 2021 | 15,082 |
PROVISIONS |
At 1 January 2021 |
and 31 December 2021 | 2,701 |
NET BOOK VALUE |
At 31 December 2021 | 12,381 |
The group or the company's investments at the Statement of Financial Position date in the share capital of companies include the following: |
Subsidiaries |
Medopad Inc. |
Registered office: 378C, 101 Ave of Americas New York NY 10013 |
Nature of business: Global healthtech company |
% |
Class of shares: | holding |
Ordinary | 100.00 |
Medopad Information Technology (Shanghai) Co., Ltd. |
Registered office: Room 123, 13 / F, Shanghai Tower,No. 501 Yincheng Middle Road, Pudong New Area, Shanghai |
Nature of business: Global healthtech company |
% |
Class of shares: | holding |
Ordinary | 100.00 |
Medsubone Limited |
Registered office: 13th Floor Millbank Tower, 21-24 Millbank, London, United Kingdom, SW1P 4QP |
Nature of business: Global healthtech company |
% |
Class of shares: | holding |
Ordinary | 100.00 |
Biobeats Group Limited |
Registered office: 13th Floor Millbank Tower, 21-24 Millbank, London, England, SW1P 4QP |
Nature of business: Global healthtech company |
% |
Class of shares: | holding |
Ordinary | 100.00 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
14. | INVESTMENTS - continued |
Company |
Medopad Limited |
Registered office: 13th Floor Millbank Tower, 21-24 Millbank, London, England, SW1P 4QP |
Nature of business: Dormant |
% |
Class of shares: | holding |
Ordinary | 100.00 |
Medopad Limited (12538105) is incorporated and a dormant business in the United Kingdom. It is exempt from audit under section 479A Companies Act 2006. |
Huma Therapeutics GmbH |
Registered office: Raboisen 32, 20095 Hamburg, Germany |
Nature of business: Global healthtech company |
% |
Class of shares: | holding |
Ordinary | 100.00 |
Iplato Limited |
Registered office: 1 King Street, London, W6 9HR |
Nature of business: Global healthtech company |
% |
Class of shares: | holding |
Ordinary | 100.00 |
Iplato Healthcare Limited |
Registered office: 1 King Street, London, W6 9HR |
Nature of business: Global healthtech company |
% |
Class of shares: | holding |
Ordinary | 100.00 |
Iplato s.r.o |
Registered office: nám. Republiky 56 530 02 Pardubice |
Nature of business: Global healthtech company |
% |
Class of shares: | holding |
Ordinary | 100.00 |
Alcedis GmbH |
Registered office: 35395 Gießen, Winchesterstraße 3,Germany |
Nature of business: Global healthtech company |
% |
Class of shares: | holding |
Ordinary | 100.00 |
TheraOp GmbH |
Registered office: 35395 Gießen, Winchesterstraße 3,Germany |
Nature of business: Global Healthtech company |
% |
Class of shares: | holding |
Ordinary | 100.00 |
All subsidiaries are directly owned by Huma Therapeutics Ltd, except the following which are indirectly held through their parent entity being owned by Huma Therapeutics Ltd: iPlato Healthcare Ltd, iPlato s.r.o. and TheraOp GmbH. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
15. | TRADE AND OTHER RECEIVABLES |
Group | Company |
2022 | 2021 | 2022 | 2021 |
as restated | as restated |
£'000 | £'000 | £'000 | £'000 |
Current: |
Trade receivables | 7,595 | 2,709 |
Amounts owed by group undertakings | - | - |
Other receivables | 452 | 496 | 221 | 291 |
Contract assets | 2,861 | 788 | 571 | 788 |
Prepayments | 1,599 | 400 |
12,507 | 4,393 |
Amounts owed by group undertakings are repayable on demand and are non-interest bearing. |
As at 1 January 2021 the Group's trade and other receivables of £6,351k were split as follows: Trade receivables: £5,683k; Other receivables: £383k; and Prepayments and accrued income £285k; and the Company's trade and other receivables of £8,539k were split as follows: Trade receivables: £5,678k; Amounts owed by group undertakings £2,502k; Other receivables: £193k; and Prepayments and accrued income £166k. |
The Group regularly evaluates its trade receivables, especially receivables that are past due, and will reassess its allowance for doubtful accounts based on identified customer collection issues. In circumstances where the Group is aware of a customer's inability to meet its financial obligation, the Group records a specific allowance for doubtful accounts to reduce its net recognised receivable to an amount the Group reasonably expects to collect. In 2022 and 2021 the Group did not have a material balance of aged debtors and therefore made no provision against specific accounts receivable. |
The Group also considers the collectability of debtors over past years to consider whether an expected credit loss to all receivables is suitable. The Group has not had material issues to date with collectability of receivables and so has decided not to include a value for expected credit losses on the balance of current receivables. |
Contract assets - Primarily reflects estimated revenue expected to be billed, as the Group does not have the unconditional contractual right to invoice these amounts. The Group receives payments from customers based on the terms established in contracts. An amount of £2,861k is included in contract assets in the Statement of financial position (31/12/21: £788k; 1/1/21: £77k). For the Company an amount of £571k is included in contract assets in the Statement of financial position (31/12/21: £788k; 1/1/21: £nil). |
When certain costs to acquire a contract meet defined criteria, those costs are deferred as contract assets. The total amount of deferred contract assets (commission fees recognised in prepaid assets) are £490k (31/12/21: £nil; 1/1/21 £nil). |
There is a disclosure of the currency of the Group's financial assets in Note 23 Financial Instruments. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
16. | LISTED INVESTMENTS |
Group | Company |
2022 | 2021 | 2022 | 2021 |
as restated | as restated |
£'000 | £'000 | £'000 | £'000 |
Listed investments | 5,734 | 11,447 | 5,734 | 11,447 |
Promissory Notes | - | 74 | - | 74 |
5,734 | 11,521 | 5,734 | 11,521 |
As at 1 January 2021 the Group and Company had: Listed investments: £9,919k; and Promissory notes £nil. In 2022 the Promissory Notes were reclassified to non-current investments (see note 14). |
17. | CASH AND CASH EQUIVALENTS |
Group | Company |
2022 | 2021 | 2022 | 2021 |
as restated | as restated |
£'000 | £'000 | £'000 | £'000 |
Bank accounts | 35,705 | 45,909 |
As at 1 January 2021 the Group had: Cash and cash equivalents of £6,111k; and the Company had: Cash and cash equivalents of £5,248k. |
18. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2022 | 2021 |
value: | as restated |
£'000 | £'000 |
Ordinary | £0.00 | 1 | 19 | 18 |
Growth | £0.00 | 1 | 5 | 5 |
C Preference | £0.00 | 1 | 4 | 4 |
28 | 27 |
The following fully paid shares were allotted during the year at a premium as shown below: |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
18. | CALLED UP SHARE CAPITAL - continued |
The total consideration received for the new shares was £26,007,119 (2021: £64,102,976). |
Rights, preferences and restrictions attaching to each class is as follows: |
Ordinary Shares |
The shares have attached to them full voting, dividend and capital distribution (Including on winding up) rights; They do not confer any rights of redemption. |
Growth Shares |
The growth shares have attached to them full voting and dividend rights. The growth shares have the right to participate in a capital distribution (Including on a winding ip) save that the holders of the growth shares shall have no entitlement prior To each ordinary share having received an amount equal to 100% of the hurdle amount for that growth share and thereafter the growth share shall participate pari passu with the ordinary shares in distributions in excess of the hurdle amount. The growth shares do not confer any rights of redemption. |
C Preference Shares |
Right of distribution of profit. Right to receive notice of, attend and vote at, general meetings. One vote on a show of hands. One vote for each share of which that person is the holder on a poll vote. Right of conversion to ordinary shares (1:1 basis). On an insolvency event or exit event, holders of C preference shares shall, ahead of the holders of ordinary shares or growth shares, be entitled to receive an amount equal to the amounts paid up on the preference shares. |
The company has no history of paying dividends to any class of share holder. |
19. | RESERVES |
Nature and purpose of reserves |
The ordinary share capital account represents the amount subscribed for shares at nominal value. |
The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits. |
The advances for shares account represents shares to be issued in future periods in respect of prior period acquisitions. |
The Share-based payments reserve is used to recognise the grant date fair value of options issued to employees but not exercised. |
Retained earnings include all current and prior period results as disclosed in the statement of |
comprehensive income. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
20. | TRADE AND OTHER PAYABLES |
Group | Company |
2022 | 2021 | 2022 | 2021 |
as restated | as restated |
£'000 | £'000 | £'000 | £'000 |
Current: |
Trade payables | 2,373 | 954 |
Amounts owed to group undertakings | - | - |
PAYE | 589 | 606 |
Other payables | 2,930 | 1,065 |
Net wages | 56 | 48 | (5 | ) | - |
Contract liabilities | 7,203 | 3,971 |
Accrued expenses | 4,724 | 2,917 | 3,332 | 2,196 |
VAT | 725 | 758 | 601 | 257 |
18,600 | 10,319 |
As at 1 January 2021, the Group's trade and other payables of £6,469k were split as follow: Trade payables: £3,647k; PAYE: £75k; Other payables: £167k; Net wages: £nil; Accruals and deferred income: £1,971k; and VAT £609k; and the Company's trade and other payables of £6,204k were split as follow:: Trade payables: £3,574k; Amounts owed to group undertakings £nil; PAYE: £3k; Other payables: £53k; Net wages: £nil; Accruals and deferred income: £1,953k; and VAT £621k. |
Contract liabilities - Includes funds received for development and messaging services in advance of services being rendered. An amount of £7,203k is included in contract liabilities in the Statement of financial position (31/12/21: £3,971k; 1/1/21: £1,021k). The funds will be recognised as revenue within the next 12 months from the Statement of financial position date. For the Company an amount of £2,412k is included in contract liabilities in the Statement of financial position (31/12/21: £864k; 1/1/21: £1,019k). The funds will be recognised as revenue within the next 12 months from the Statement of financial position date. |
Significant changes in the contract assets and contract liabilities balances during the period are driven by the timing of income recognition and when associated invoices are raised.Specifically, revenue recognised in the year in relation to deferred income brought forward from prior years of £3,971k (2021: £1,021k). |
The total amount of revenue allocated to unsatisfied performance obligations is £54,554 (2021: £20,163). |
As at 1 January 2021 the Group and Parent had no non-current trade and other payables. |
21. | FINANCIAL LIABILITIES - BORROWINGS |
Group | Company |
2022 | 2021 | 2022 | 2021 |
as restated | as restated |
£'000 | £'000 | £'000 | £'000 |
Current: |
Leases (see note 22) | 517 | 296 | 192 | - |
Non-current: |
Convertible loan notes | 20,253 | - | 20,253 | - |
Leases (see note 22) | 757 | 137 | 100 | - |
21,010 | 137 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
21. | FINANCIAL LIABILITIES - BORROWINGS - continued |
Terms and debt repayment schedule |
Group |
1 year or |
less | 1-2 years | 2-5 years | Totals |
£'000 | £'000 | £'000 | £'000 |
Convertible loan notes | - | 20,253 | - | 20,253 |
Leases | 517 | 271 | 486 | 1,274 |
517 | 20,524 | 486 | 21,527 |
Please refer to note 31 for Convertible loan note. |
22. | LEASING |
Group |
Other leases |
2022 | 2021 |
as restated |
£'000 | £'000 |
Short-term leases | - | 80 |
Low-value assets leases | 30 | 84 |
Group |
Lease liabilities |
Minimum lease payments fall due as follows: |
2022 | 2021 |
as restated |
£'000 | £'000 |
Gross obligations repayable: |
Within one year | 583 | 318 |
Between one and five years | 840 | 144 |
1,423 | 462 |
Finance charges repayable: |
Within one year | 66 | 22 |
Between one and five years | 83 | 7 |
149 | 29 |
Net obligations repayable: |
Within one year | 517 | 296 |
Between one and five years | 757 | 137 |
1,274 | 433 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
22. | LEASING - continued |
Company |
Lease liabilities |
Minimum lease payments fall due as follows: |
2022 | 2021 |
as restated |
£'000 | £'000 |
Gross obligations repayable: |
Within one year | 205 | - |
Between one and five years | 102 | - |
307 | - |
Finance charges repayable: |
Within one year | 13 | - |
Between one and five years | 2 | - |
15 | - |
Net obligations repayable: |
Within one year | 192 | - |
Between one and five years | 100 | - |
292 | - |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
22. | LEASING - continued |
This note provides information for leases where the Group and the Parent Company is a lessee. The Group accounted for 1,273k (2021: 433k) and the Parent Company accounted for 292k (2021: 0) leased properties under IFRS 16. The Incremental Borrowing Rates used to calculate the lease liabilities ranged from 4.0% to 6.5%. |
As at 1 January 2021, for both the Group and Company, the gross obligations repayable were £166k; the finance charges repayable were £7k, giving net obligations repayable of £160k. |
Group | Non-current lease liabilities | Current lease liabilities | Total |
£'000 | £'000 | £'000 |
At 1/1/2021 | 160 | 160 |
Cash flows: |
Repayment | (242 | ) | (242 | ) |
Accrued interest | 7 | 7 |
Non-cash: |
Additions | 508 | 508 |
Reclassification | 213 | (213 | ) |
At 31/12/2021 | 213 | 220 | 433 |
Non-current lease liabilities | Current lease liabilities | Total |
£'000 | £'000 | £'000 |
At 1/1/2022 | 213 | 220 | 433 |
Cash flows: |
Repayment | (533 | ) | (533 | ) |
Accrued interest | 43 | 43 |
Non-cash: |
Additions | 1,330 | 1,330 |
Reclassification | 472 | (472 | ) |
At 31/12/2022 | 685 | 588 | 1,273 |
Company | Non-current lease liabilities | Current lease liabilities | Total |
£'000 | £'000 | £'000 |
At 1/1/2021 | 160 | 160 |
Cash flows: |
Repayment | (167 | ) | (167 | ) |
Accrued interest | 7 | 7 |
Non-cash: |
At 31/12/2021 | - | - | - |
Non-current lease liabilities | Current lease liabilities | Total |
£'000 | £'000 | £'000 |
At 1/1/2022 |
Cash flows: |
Repayment | (205 | ) | (205 | ) |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
22. | LEASING - continued |
Accrued interest | 20 | 20 |
Non-cash: |
Additions | 477 | 477 |
Reclassification | 100 | (100 | ) |
At 31/12/2022 | 100 | 192 | 292 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
23. | FINANCIAL INSTRUMENTS |
Group |
31/12/22 | 31/12/21 | 01/01/21 |
Financial assets - measured at amortised cost | £'000 | £'000 | £'000 |
Current |
Trade and other receivables | 10,908 | 3,993 | 6,088 |
Cash and cash equivalents | 35,705 | 45,910 | 6,111 |
46,613 | 49,903 | 12,199 |
Financial assets - measured at fair value through P&L |
Non-current |
Investments | 74 | - | - |
Current |
Investments | 5,734 | 11,521 | 11,521 |
Company |
31/12/22 | 31/12/21 | 01/01/21 |
Financial assets - measured at amortised cost | £'000 | £'000 | £'000 |
Current |
Trade and other receivables | 29,118 | 8,493 | 8,318 |
Cash and cash equivalents | 31,970 | 44,407 | 5,248 |
61,088 | 52,900 | 13,566 |
Financial assets - measured at fair value through P&L |
Non-current |
Investments | 74 | - | - |
Current |
Investments | 5,734 | 11,521 | 11,521 |
Prepayments are excluded, as this analysis is required only for financial instruments. |
Group |
31/12/22 | 31/12/21 | 01/01/21 |
Financial liabilities - held at amortised cost | £'000 | £'000 | £'000 |
Non-current |
Lease liabilities | 685 | 213 | - |
Provisions | 123 | 87 | - |
808 | 300 | - |
Current |
Trade and other payables | 10,083 | 5,836 | 4,764 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
Bank overdrafts | 1 | 1 | - |
Lease liabilities | 588 | 220 | 160 |
10,672 | 6,057 | 4,924 |
Financial liabilities - held at fair value through P&L |
Non-current |
Convertible loan notes | 20,253 | - | - |
Company |
31/12/22 | 31/12/21 | 01/01/21 |
Financial liabilities - held at amortised cost | £'000 | £'000 | £'000 |
Non-current |
Lease liabilities | 100 | - | - |
Provisions | 30 | - | - |
130 | - | - |
Current |
Trade and other payables | 5,707 | 3,713 | 4,561 |
Lease liabilities | 192 | - | 160 |
5,899 | 3,713 | 4,721 |
Financial liabilities - held at fair value through P&L |
Non-current |
Convertible loan notes | 20,253 | - | - |
Statutory liabilities and deferred income are excluded from the trade payables balance, as this analysis is required only for financial instruments. |
There is no material difference between the book value and the fair value of the financial assets and financial liabilities disclosed above for either the Group or Parent Company. |
The Group's multinational operations expose it to financial risks that include market risk, credit risk, foreign currency risk and liquidity risk. The Directors review and agree policies for managing each of these risks and they are summarised below. These policies have remained unchanged from previous years. |
Credit quality of financial assets |
The Group's customers are either part of the National Health Service or large international pharmaceutical companies and therefore the Group's credit risk is considered to be limited. The credit quality of financial assets can be assessed by reference to external credit ratings (S&P) (if available). |
Group |
31/12/22 | 31/12/21 | 01/01/21 |
£'000 | £'000 | £'000 |
Cash at bank and short-term deposits |
A1 | 35,705 | 45,910 | 6,111 |
Not rated | - | - | - |
35,705 | 45,910 | 6,111 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
Company |
31/12/22 | 31/12/21 | 01/01/21 |
£'000 | £'000 | £'000 |
Cash at bank and short-term deposits |
A1 | 31,970 | 44,407 | 5,248 |
Not rated | - | - | - |
31,970 | 44,407 | 5,248 |
A1 rating means that the risk of default for the investors and the policy holder is deemed to be very low. |
Not rated balances relate to petty cash amounts. All cash within the Parent Company is within the A1 category. |
Market risk - foreign exchange risk |
Exposure to currency exchange rates arise from the Group's (and Company's) overseas sales and purchases, which are primarily denominated in US Dollars (USD) and Euros (EUR). |
To mitigate the Group's exposure to foreign currency risk, non-GBP cash flows are monitored. Generally, the Group's risk management procedures distinguish short-term foreign currency cash flows (due within 6 months) from longer-term cash flows (due after 6 months). Where the amounts to be paid and received in a specific currency are expected to largely offset one another, no further hedging activity is undertaken. |
Foreign currency denominated financial assets and liabilities which expose the Group to currency risk are disclosed below. The amounts shown are those reported to key management translated into GBP at the closing rate: |
USD | EUR |
31/12/22 | £'000 | £'000 |
Financial assets | 27,112 | 7,571 |
Financial liabilities | (20,873 | ) | (2,215 | ) |
Total exposure | 6,238 | 5,356 |
USD | EUR |
31/12/21 | £'000 | £'000 |
Financial assets | 42,255 | 1,912 |
Financial liabilities | (7 | ) | (184 | ) |
Total exposure | 42,248 | 1,728 |
The following table illustrates the sensitivity of profit and equity in regards to the Group's financial assets and financial liabilities and the US Dollar and Euro to GBP exchange rate 'all other things being equal'. It assumes a +/- 10% change to each of the foreign currency to GBP exchange rates. The sensitivity analysis is based on the Group's foreign currency financial instruments held at each reporting date. |
If GBP had strengthened against the foreign currencies by 10% then this would have had the following impact: |
USD | EUR |
31/12/22 | £'000 | £'000 |
Loss for the year | (624 | ) | (536 | ) |
Equity total | (624 | ) | (536 | ) |
USD | EUR |
31/12/21 | £'000 | £'000 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
Loss for the year | (4,225 | ) | (173 | ) |
Equity total | (4,225 | ) | (173 | ) |
If the GBP had weakened against the foreign currencies by 10% then this would have had the following impact: |
USD | EUR |
31/12/22 | £'000 | £'000 |
Gain for the year | 623 | 536 |
Equity total | 623 | 536 |
USD | EUR |
31/12/21 | £'000 | £'000 |
Gain for the year | 4,225 | 173 |
Equity total | 4,225 | 173 |
Exposures to foreign exchange rates vary during the year depending on the volume of overseas transactions. Nonetheless, the analysis above is considered to be representative of the Group's exposure to currency risk. |
Market Risk - cash flow interest rate risk |
The Group's policy is to minimise interest rate cash flow risk exposures on long-term deposits. Longer-term deposits are therefore usually at fixed rates. The exposure to interest rates for the Group's cash at bank and short-term deposits is considered immaterial. |
Liquidity risk |
The Group actively maintains cash and banking facilities and reserves that are designed to ensure it has sufficient available funds for operations and planned expansions. |
The Group reviews all financial assets on a regular basis to update cashflow forecasts. The Group actively monitors the age of all trade receivables and chases any customers who are slow to pay. The Group also reviews the any short term investments on a regular basis to ensure that reserves are available if they are needed. |
The table below analyses the Group's financial liabilities into relevant maturity groupings based on the remaining period at the Statement of financial position date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. |
Group | Less than 1 year | Between 1 and 2 years | Between 2 and 5 years | Over 5 years |
£'000 | £'000 | £'000 | £'000 |
As at 31/12/22: |
Convertible loan note | - | 20,253 |
Trade and other payables | 17,286 |
As at 31/12/21: |
Trade and other payables | 9,807 |
As at 01/01/21: |
Trade and other payables | 5,785 |
Company | Less than 1 year | Between 1 and 2 years | Between 2 and 5 years | Over 5 years |
£'000 | £'000 | £'000 | £'000 |
As at 31/12/22: |
Convertible loan note | - | 20,253 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
Trade and other payables | 8,119 |
As at 31/12/21: |
Trade and other payables | 4,577 |
As at 01/01/21: |
Trade and other payables | 5,580 |
Capital risk management |
The Group manages its capital to ensure it will be able to continue as a going concern while maximising the return to shareholders through optimising the debt and equity balance. At 31 December 2022 the Group had a gearing ratio of 28% (2021 1%), which management considers to be a sensible level. For this debt to equity calculation, the financial debt balance is the Financial Liabilities of the Group, as listed in Note 20 Financial Liabilities - Borrowings. |
The Group monitors cash balances and prepare regular forecasts, which are reviewed by the board. |
Fair value measurements of financial instruments |
Financial assets and financial liabilities measured at fair value are required to be grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows: |
Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities; |
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and |
Level 3: unobservable inputs for the asset or liability. |
The current investments are all fair valued using quoted prices and are considered within Level 1. The non-current investments are immaterial and valued at Level 3. The convertible loan notes were issued just before the year end and therefore their fair value is considered to be measured at their fair value at the time of the transaction, being the proceeds less transaction costs. |
24. | PROVISIONS |
Group | Company |
2022 | 2021 | 2022 | 2021 |
as restated | as restated |
£'000 | £'000 | £'000 | £'000 |
Other provisions | 123 | 87 | 30 | - |
Analysed as follows: |
Non-current | 123 | 87 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
24. | PROVISIONS - continued |
Group |
£'000 |
Balance at 1 January 2022 | 87 |
Provided during the year | 36 |
Balance at 31 December 2022 | 123 |
Parent |
£'000 |
Balance at 1 January 2022 | - |
Provided during the year | 30 |
Balance at 31 December 2022 | 30 |
Provisions relate to the expected cost of dilapidations in relation to properties leased by the Group and have been discounted to a present value using the relevant lease interest rate. The amounts provided in respect of future dilapidations will depend on the terms of each individual lease and timings may vary depending on future discussions with landlords that may take place as part of negotiating any lease extensions.The Group and Company figures as at 1 January 2021 are explained within the IFRS transition notes (notes 34 & 35). |
25. | DEFERRED TAX |
Group |
2022 | 2021 |
as restated |
£'000 | £'000 |
Balance at 1 January | 3,686 | - |
Acquisition during the year | 153 | 2,131 |
Charge during the year | (338 | ) | - |
Fair value adjustment | 2,659 | 1,555 |
Balance at 31 December |
26. | RELATED PARTY DISCLOSURES |
Remuneration of Key Management Personnel |
The Group consider that the Directors and the internal leadership team are their key management personnel and further detail of their remuneration is disclosed in note 4. |
In the year 2022, the Group delivered total revenues of £2,834k on projects for two multinational life science corporations, who are also non-controlling shareholders in Huma Therapeutics Ltd (2021: £1,778k). |
There is no other related party transactions to disclose. |
27. | EVENTS AFTER THE REPORTING PERIOD |
The Group has reviewed its subsequent events through the signing of the audit report. |
By June 2023, there was an ongoing funding round whereby £16,173k funds had been signed and received from investors. |
28. | ULTIMATE CONTROLLING PARTY |
The Group does not have a single controlling entity or individual. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
29. | SHARE-BASED PAYMENT TRANSACTIONS |
The company operates an equity settled Enterprise Management Incentive (EMI) Share Option Scheme and Non-EMI scheme. The options are granted with a fixed exercise price determined at the grant of the option. The options vest over a period of up to 4.5 years following the date of the grant. The options are exercisable until the 10th anniversary from the date of grant. Employees are not entitled to dividends until the shares are exercised. Vesting of options is subject to continued employment with the company. The company had the following options granted in the year. |
Share Option Type | Date of Grant | No. of shares | Exercise Price |
Enterprise Management Incentive | 04/08/2015 to 31/12/2022 | 1,274,115 | £0.08 to £8.51 |
Non-EMI | 26/08/2016 to 31/12/2022 | 2,785,706 | £0.08 to £9.01 |
EMI Scheme | Non EMI Scheme | Weighted average exercise price |
Brought forward | 1,265,668 | 1,739,209 | 1.49 |
Adjustment to last year | 63,697 | 8,828 | 0.37 |
Granted in the year | 1,232,896 | 1.33 |
Exercised in the year | Nil | Nil | Nil |
Lapsed in the year | (82,250 | ) | (195,227 | ) | 2.59 |
Carried forward | 1,274,115 | 2,785,706 | 1.35 |
Exercisable at year end | 1,212,784 | 1,265,871 | 1.22 |
Exercisable at last year end | 991,203 | 950,430 | 1.14 |
The fair value of the options granted have been calculated using the Black Scholes model. The total charge for the period was £8,466k(2021: £6,754k) |
The total figure included in share options reserves as at 31 December 2022 is £29,087k. |
30. | SUBSIDIARY EXEMPT FROM AUDIT |
Biobeats Group Limited, Medsubone Limited, iPlato Limited and iPlato Healthcare Limited are all consolidated within the group financial statements. The companies are exempt from audit under S479A of the Companies Act. |
31. | CONVERTIBLE LOAN NOTES |
On 8 December 2022, the Company issued combined value of £20,145k unsecured convertible loan notes of £0.83 each. The Loan notes accrue interest at 3% per annum until the earlier of the Maturity Date or the conversion of the Notes. The Maturity Date is 18 months after the date of the loan note instrument. |
The Notes will have no ability to be prepaid, redeemed or repurchased, except for repayment of the principal amount of the Notes on a winding up or insolvency of the Company. The Notes have been included in other creditors falling due after one year. |
The Notes can be converted into fully paid shares at the following events; an equity financing of the Group, a change of control of the Group, and on the Maturity Date of the instrument. On conversion the notes will convert into the most senior class of share at the time. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
32. | ACQUISITION |
On 28 December 2022, Huma Therapeutics Limited acquired 100% of the share capital of Alcedis GmbH and its subsidiary TheraOp GmbH for £19,382k, thereby obtaining control. The strategic importance of this acquisition to the Group is to expand the capabilities, experience and customer relationships within the Clinical Trials sector. |
The Company's controlling interest has led to a business combination as defined in IFRS 3 Business Combinations. As such the acquisition method of accounting for this transaction has been followed. |
The amounts for the Alcedis acquisition are provisional based on preliminary information and valuations of the assets and liabilities, and subject to change in 2023. There are complex revenue contracts supporting the Accrued Revenue and Trade and Other Payables balances of £1.9m and £2.0m respectively. These contracts need to be reviewed in detail to ensure the revenue recognition is aligned to the Group accounting standards, and the balance sheet would need to be adjusted accordingly. Additionally, the opening balance sheet includes £0.6m of capitalised development costs which need to be reviewed to ensure the treatment is aligned with IFRS. These are time intensive exercises that management has not been able to conclude yet. |
The details of the business combination are as follows: |
Book value | Fair value adjustments | Fair value |
£'000 | £'000 | £'000 |
Recognised amounts of identifiable net assets |
Property, plant and equipment | 214 | - | 214 |
Right-of-use assets | - | 787 | 787 |
Intangible assets | 587 | 10,636 | 11,223 |
Total non-current assets | 801 | 11,423 | 12,224 |
Trade and other receivables | 7,746 | - | 7,746 |
Cash and cash equivalents | 2,351 | - | 2,351 |
Total current assets | 10,097 | - | 10,097 |
Other non-current liabilities | - | (557 | ) | (557 | ) |
Deferred tax liabilities | (154 | ) | (2,659 | ) | (2,813 | ) |
Total non-current liabilities | (154 | ) | (3,216 | ) | (3,369 | ) |
Trade and other payables | (5,460 | ) | (230 | ) | (5,690 | ) |
Total current liabilities | (5,460 | ) | (230 | ) | (5,690 | ) |
Identifiable net assets | 5,284 | 7,977 | 13,262 |
Goodwill arising on acquisition (note 10) | 6,120 |
Fair value of consideration transferred |
Amount settled in cash | 19,382 |
Total purchase consideration | 19,382 |
Analysis of cash flows on acquisition |
Purchase consideration transferred settled in cash | 19,382 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
Cash and cash equivalents acquired | (2,351 | ) |
Net cash flow on acquisition | 17,031 |
Acquisition costs charged to expenses | 286 |
Transaction costs amounting to £286k are not included as part of consideration transferred and have been recognised as an administrative expense in the consolidated statement of profit or loss. |
Identifiable net assets |
Net assets excluding intangibles of £2,038k and separately identified intangible net assets of £11,223k were acquired. |
The separately identified intangible net assets were made up of the current fair value of existing software (£6,248k), order backlog (£1,646k) and customer contracts (£2,743k). The current fair value was calculated based on an estimate of future profits from these sources using a Weighted Average Cost of Capital (WACC) of 17.1%. |
Goodwill |
Goodwill arising on this transaction amounted to £6,120k, of which £2,659k relates to deferred tax arising on the provisional assets recognised on acquisition .The remaining goodwill of 3,462k is primarily related to growth expectations, expected future profitability, the substantial skill and expertise of Alcedis GmBH and TheraOp GmbH workforce and expected cost synergies. |
Goodwill has not been allocated to a particular segment and is not expected to be deductible for tax purposes. |
Alcedis GmbH's and TheraOp GmbH's contribution to the Group results |
The consolidated financial statements for Huma Therapeutics Limited include the consolidated balance sheets of Alcedis and TheraOp on 31 December 2022. |
Alcedis GmbH and TheraOp GmbH generated no revenue and made no profit or loss for the period from 28 December 2022 to 31 December 2022. If Alcedis GmbH and TheraOp GmbH had been acquired on 1 January 2022, the additional revenue of the Group for 2022 would have been £13,433k, and profit for the year would have been an additional £1,281k. Please note that the 2022 results of the acquired companies have not been audited by our Group auditors. |
33. | CONTINGENT ASSETS |
For the year ended 31 December 22, Huma Therapeutics Limited and Iplato Healthcare Limited have a Research and Development tax credit receivable from HMRC for the amounts totaling £1,811,595 and £398,837 respectively. |
These will be received after the audited financial statements are filed and hence it is disclosed as contingent assets. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
34. | IFRS TRANSITION ADJUSTMENTS AND RECONCILIATIONS - PARENT COMPANY |
Under FRS 102 the parent company only had leases that were classified as operating leases, which were recognised as an operating expense in the statement of comprehensive income on a straight-line basis over the lease term. At the date of transition to IFRS the parent company applied the transitional provision and measured lease liabilities at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate at the date of transition to IFRS. Right-of-use assets were measured at the amount equal to the lease liabilities and dilapidation provisions adjusted by the amount of any prepaid or accrued lease payments. As a result, at transition on 1 January 2021, the parent company recognised short term lease liabilities of £160k, reduced prepayments by £55k and recognised right-of-use assets of £215k, with no impact on retained earnings. |
During the year ended 31 December 2021, the rental payments were reclassified to the lease liability, resulting in a reduction to administrative expenses of £166k; the right-of-use assets were depreciated by £172k; and interest was charged on the lease liabilities of £7k, resulting in an increased loss of £13k for the year. |
The above movements resulted in the recognition of reduced prepayments by £131k and recognised right-of-use assets of £43k as at 31 December 2021. |
The Parent company has restated the acquisition of iPlato Group on 22 December 2021 under IFRS, which has resulted in: |
- the write-off of transactions costs that are not capitalised under IFRS of £544k and |
- the fair value of consideration under IFRS 13 has been adjusted down by £157k representing the discounting of deferred consideration. |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
PARENT COMPANY - Reconciliation of equity as at 1 January 2021 (date of transition to IFRS) |
FRS 102 | Effect oftransition to IFRSs | IFRSs |
ASSETS | £'000 | £'000 | £'000 |
NON-CURRENT ASSETS |
Intangible assets | 275 | - | 275 |
Property, plant and equipment | 148 | 215 | 363 |
Investments | 2,182 | - | 2,182 |
2,605 | 215 | 2,820 |
CURRENT ASSETS |
Trade and other receivables | 8,594 | (55 | ) | 8,539 |
Tax receivable | 1,122 | - | 1,122 |
Investments | 9,919 | - | 9,919 |
Cash and cash equivalents | 5,248 | - | 5,248 |
24,883 | (55 | ) | 24,828 |
LIABILITIES |
CURRENT LIABILITIES |
Trade and other payables | (6,204 | ) | (6,204 | ) |
Lease liabilities | (160 | ) | (160 | ) |
NET CURRENT ASSETS | 18,679 | (215 | ) | 18,464 |
NET ASSETS | 21,284 | - | 21,284 |
SHAREHOLDERS' EQUITY |
Called up share capital | 23 | - | 23 |
Share premium | 41,449 | - | 41,449 |
Share to be issued | 2,508 | - | 2,508 |
Other reserves | 13,867 | - | 13,867 |
Retained earnings | (36,563 | ) | - | (36,563 | ) |
TOTAL EQUITY | 21,284 | - | 21,284 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
PARENT COMPANY - Reconciliation of equity as at 31 December 2021 |
FRS 102 | Effect oftransition to IFRSs | IFRSs |
ASSETS | £'000 | £'000 | £'000 |
NON-CURRENT ASSETS |
Intangible assets | 399 | - | 399 |
Property, plant and equipment | 95 | 43 | 138 |
Investments | 13,082 | (702 | ) | 12,380 |
13,576 | (659 | ) | 12,917 |
CURRENT ASSETS |
Trade and other receivables | 8,819 | (55 | ) | 8,764 |
Tax receivable | 1,469 | - | 1,469 |
Investments | 11,521 | - | 11,521 |
Cash and cash equivalents | 44,407 | - | 44,407 |
66,216 | (55 | ) | 66,160 |
LIABILITIES |
CURRENT LIABILITIES |
Trade and other payables | (5,245 | ) | 157 | (5,088 | ) |
NET CURRENT ASSETS | 60,971 | 102 | 61,073 |
NET ASSETS | 74,547 | (557 | ) | 73,990 |
SHAREHOLDERS' EQUITY |
Called up share capital | 27 | - | 27 |
Share premium | 105,547 | - | 105,547 |
Share to be issued | 11,000 | - | 11,000 |
Other reserves | 20,622 | - | 20,622 |
Retained earnings | (62,650 | ) | (557 | ) | (63,206 | ) |
TOTAL EQUITY | 74,547 | (557 | ) | 73,990 |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
PARENT COMPANY - Reconciliation of loss for the year ended 31 December 2021 |
FRS 102 | Effect oftransition to IFRSs | IFRSs |
£'000 | £'000 | £'000 |
Revenue | 5,114 | - | 5,114 |
Cost of sales | (566 | ) | - | (566 | ) |
GROSS PROFIT | 4,548 | - | 4,548 |
Other operating income | 25 | - | 25 |
Administrative expenses | (32,012 | ) | (550 | ) | (32,562 | ) |
Finance costs | (116 | ) | (7 | ) | (123 | ) |
Finance income |
LOSS BEFORE TAX | (27,555 | ) | (557 | ) | (28,111 | ) |
Income tax | 1,469 | - | 1,469 |
LOSS FOR THE YEAR | (26,086 | ) | (557 | ) | (26,643 | ) |
Huma Therapeutics Limited (Registered number: 07725451) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
35. | IFRS TRANSITION ADJUSTMENTS AND RECONCILIATIONS - GROUP |
These financial statements, for the year ended 31 December 2022, are the first the Group has prepared in accordance with IFRS. For periods up to and including the year ended 31 December 2021, the Group prepared its financial statements in accordance with UK GAAP. |
Accordingly, the Group has prepared financial statements that comply with IFRS applicable as at 31 December 2022, together with the comparative period data for the year ended 31 December 2021, as described in the summary of significant accounting policies. In preparing the financial statements, the Group's opening statement of financial position was prepared as at 1 January 2021, the Group's date of transition to IFRS. This note explains the principal adjustments made by the Group in restating its UK GAAP financial statements, including the statement of financial position as at 1 January 2021 and the financial statements as at, and for, the year ended 31 December 2021. |
Exemptions applied |
IFRS 1 allows first-time adopters certain exemptions from the retrospective application of certain requirements under IFRS. |
The Group has applied the following exemptions: |
(i) IFRS 3 "Business Combinations" has not been applied to acquisitions of subsidiaries that are considered businesses under IFRS that occurred before 1 January 2021. Use of this exemption means that the UK GAAP carrying amounts of assets and liabilities, that are required to be recognised under IFRS, is their deemed cost at the date of the acquisition. After the date of the acquisition, measurement is in accordance with IFRS. Assets and liabilities that do not qualify for recognition under IFRS are excluded from the opening IFRS statement of financial position. The Group did not recognise or exclude any previously recognised amounts as a result of IFRS recognition requirements. |
IFRS 1 also requires that the UK GAAP carrying amount of goodwill must be used in the opening IFRS statement of financial position (apart from adjustments for goodwill impairment and recognition or derecognition of intangible assets). In accordance with IFRS 1, the Group has tested goodwill for impairment at the date of transition to IFRS. There was no impairment recognised on goodwill at 1 January 2021. |
(ii) The Group assessed all contracts existing at 1 January 2021 to determine whether a contract contains a lease based upon conditions in place as at 1 January 2021. Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate at 1 January 2021. Right-of-use assets were measured at the amount equal to the lease liabilities, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the statement of financial position immediately before 1 January 2021. The lease payments associated with leases for which the lease term ends within 12 months of the date of transition to IFRS and leases for which the underlying asset is of low value have been recognised as an expense on either a straight-line basis over the lease term or another systematic basis. |
Estimates |
The estimates at 1 January 2021 and 31 December 2021 are consistent with those made for the same dates in accordance with UK GAAP (after adjustments to reflect any differences in accounting policies). The estimates used by the Group to present these amounts in accordance with IFRS reflect considerations at 1 January 2021, the date of transition to IFRS, and as at 31 December 2021. |
Huma Therapeutics Limited (Registered number: 07725451) |
Reconciliation of Equity |
1 January 2021 |
(Date of Transition to IFRSs) |
Effect of |
transition |
FRS 102 | to IFRSs | IFRSs |
£'000 | £'000 | £'000 |
ASSETS |
NON-CURRENT ASSETS |
Goodwill | 1,537 | - | 1,537 |
Intangible assets | 340 | - | 340 |
Property, plant and equipment | 196 | 215 | 411 |
Investments | 23 | - | 23 |
2,096 | 215 | 2,311 |
CURRENT ASSETS |
Trade and other receivables | 6,406 | (55 | ) | 6,351 |
Tax receivable | 1,122 | - | 1,122 |
Listed Investments | 9,919 | - | 9,919 |
Cash and cash equivalents | 6,111 | - | 6,111 |
23,558 | (55 | ) | 23,503 |
TOTAL ASSETS | 25,654 | 160 | 25,814 |
SHAREHOLDERS' EQUITY |
Called up share capital | 23 | - | 23 |
Share premium | 41,449 | - | 41,449 |
Advances for shares | 2,508 | - | 2,508 |
Share options reserves | 13,867 | - | 13,867 |
Retained earnings | (38,662 | ) | - | (38,662 | ) |
19,185 | - | 19,185 |
TOTAL EQUITY | 19,185 | - | 19,185 |
LIABILITIES |
CURRENT LIABILITIES |
Trade and other payables | 6,469 | - | 6,469 |
Financial liabilities - borrowings |
Lease liabilities and |
Convertible loan notes | - | 160 | 160 |
6,469 | 160 | 6,629 |
TOTAL LIABILITIES | 6,469 | 160 | 6,629 |
TOTAL EQUITY AND LIABILITIES | 25,654 | 160 | 25,814 |
Huma Therapeutics Limited (Registered number: 07725451) |
Reconciliation of Equity - continued |
31 December 2021 |
Effect of |
transition |
FRS 102 | to IFRSs | IFRSs |
£'000 | £'000 | £'000 |
ASSETS |
NON-CURRENT ASSETS |
Goodwill | 10,228 | (254 | ) | 9,974 |
Intangible assets | 8,944 | 6,221 | 15,165 |
Property, plant and equipment | 135 | 596 | 731 |
19,307 | 6,563 | 25,870 |
CURRENT ASSETS |
Trade and other receivables | 4,524 | (131 | ) | 4,393 |
Tax receivable | 2,034 | - | 2,034 |
Listed Investments | 11,521 | - | 11,521 |
Cash and cash equivalents | 45,910 | (1 | ) | 45,909 |
63,989 | (132 | ) | 63,857 |
TOTAL ASSETS | 83,296 | 6,431 | 89,727 |
EQUITY |
SHAREHOLDERS' EQUITY |
Called up share capital | 27 | - | 27 |
Share premium | 105,548 | - | 105,548 |
Advances for shares | 11,000 | - | 11,000 |
Share options reserves | 20,622 | - | 20,622 |
Retained earnings | (64,500 | ) | 2,502 | (61,998 | ) |
72,697 | 2,502 | 75,199 |
TOTAL EQUITY | 72,697 | 2,502 | 75,199 |
LIABILITIES |
Huma Therapeutics Limited (Registered number: 07725451) |
Reconciliation of Equity - continued |
31 December 2021 |
Effect of |
transition |
FRS 102 | to IFRSs | IFRSs |
£'000 | £'000 | £'000 |
NON-CURRENT LIABILITIES |
Financial liabilities - borrowings |
Lease liabilities and |
Convertible loan notes | - | 137 | 137 |
Deferred tax | 132 | 3,554 | 3,686 |
Provisions | 87 | - | 87 |
219 | 3,691 | 3,910 |
CURRENT LIABILITIES |
Trade and other payables | 10,595 | (276 | ) | 10,319 |
Financial liabilities - borrowings |
Bank overdrafts | 1 | (1 | ) | - |
Lease liabilities and |
Convertible loan notes | - | 296 | 296 |
Tax payable | 3 | - | 3 |
Provisions | (87 | ) | 87 | - |
10,512 | 106 | 10,618 |
TOTAL LIABILITIES | 10,731 | 3,797 | 14,528 |
TOTAL EQUITY AND LIABILITIES | 83,428 | 6,299 | 89,727 |
Huma Therapeutics Limited (Registered number: 07725451) |
Reconciliation of Equity - continued |
31 December 2021 |
Notes to the reconciliation of equity |
The Group has adopted the exemption under IFRS 1, such that Business combinations that occurred prior to the transition date have not been restated to comply with IFRS 3 'Business Combinations'. Instead, the Goodwill carried at the transition date is no longer amortised and the net book value of £1,537k as at 31 December 2020 has been included as the deemed cost under IFRS. There has been no reversal of amortisation of this Goodwill during the year ended 31 December 2021, as the Goodwill was fully impaired during that year. |
Under FRS 102, the Group only had leases that were classified as operating leases, which were recognised as an operating expense in the statement of comprehensive income on a straight-line basis over the lease term. At the date of transition to IFRS the Group applied the transitional provision and measured lease liabilities at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate at the date of transition to IFRS. Right-of-use assets were measured at the amount equal to the lease liabilities and dilapidation provisions adjusted by the amount of any prepaid or accrued lease payments. As a result, at transition on 1 January 2021, the Group recognised short term lease liabilities of £160k, reduced prepayments by £55k and recognised right-of-use assets of £215k, with no impact on retained earnings. |
During the year ended 31 December 2021, the rental payments were reclassified to the lease liability, resulting in a reduction to administrative expenses of £242k; the right-of-use assets were depreciated by £172k; and interest was charged on the lease liabilities of £7k, resulting in an increased profit of £63k for the year. |
The above movements, along with additions during the year ended 31 December 2021 (Right-of-use assets £553k; lease liabilities £509k; rent free accrual reversal £119k; prepayment reversal of £76k and provisions £87k), resulted in the recognition of short term lease liabilities of £220k, long-term lease liabilities of £213k, dilapidations provisions of £87k reduced prepayments by £131k; reduced accruals by £119k and recognised right-of-use assets of £596k as at 31 December 2021. |
The Group has restated the acquisition of iPlato Group on 22 December 2021 under IFRS, which has resulted in: |
- the reversal of Goodwill amortisation of £2,982k charged under UK GAAP, as amortisation is not charged under IFRS; |
- the write-off of transactions costs that are not capitalised under IFRS of £544k; |
- the fair value of consideration under IFRS 13 has been adjusted down by £157k representing the discounting of deferred consideration; and |
- the Goodwill recognised under UK GAAP of £14,911k has also been reduced by the recognition of other intangible assets, being purchased software costs of £3,281k and purchased customer relationships of £2,940k. |
- a deferred tax liability of £3,686k has been recognised in relation to the development costs, software costs and purchased customer relationships, with the corresponding entry being an increase to Goodwill. |
A foreign exchange reserve has been included for the year ended 31 December 2021, with no adjustment required at the transition date this represents a loss of £34k for the year ended 31 December 2021, with the corresponding entry being to increase retained earnings - which is where the foreign exchange movement had been recognised under UK GAAP. |
Huma Therapeutics Limited (Registered number: 07725451) |
Reconciliation of Loss |
for the Year Ended 31 December 2021 |
Effect of |
transition |
FRS 102 | to IFRSs | IFRSs |
£'000 | £'000 | £'000 |
Revenue | 5,307 | - | 5,307 |
Cost of sales | (624 | ) | - | (624 | ) |
GROSS PROFIT | 4,683 | - | 4,683 |
Other operating income | 59 | - | 59 |
Administrative expenses | (32,083 | ) | 2,508 | (29,575 | ) |
Finance costs | (124 | ) | (7 | ) | (131 | ) |
LOSS BEFORE TAX | (27,465 | ) | 2,501 | (24,964 | ) |
Income tax | 1,661 | - | 1,661 |
LOSS FOR THE YEAR | (25,804 | ) | 2,501 | (23,303 | ) |
Loss attributable to: |
Owners of the parent | (25,804 | ) | 2,501 | (23,303 | ) |