Company registration number 09307415 (England and Wales)
DUCENTIS BIOTHERAPEUTICS LTD.
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
PAGES FOR FILING WITH REGISTRAR
DUCENTIS BIOTHERAPEUTICS LTD.
CONTENTS
Page
Balance sheet
1 - 2
Statement of changes in equity
3
Notes to the financial statements
4 - 8
DUCENTIS BIOTHERAPEUTICS LTD.
BALANCE SHEET
AS AT
31 OCTOBER 2022
31 October 2022
- 1 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
3
620
Current assets
Debtors
4
1,614
340,817
Cash at bank and in hand
26,990
624,323
28,604
965,140
Creditors: amounts falling due within one year
5
(781,028)
(292,084)
Net current (liabilities)/assets
(752,424)
673,056
Total assets less current liabilities
(752,424)
673,676
Creditors: amounts falling due after more than one year
6
(1,331,100)
Net liabilities
(752,424)
(657,424)
Capital and reserves
Called up share capital
7
975
685
Share premium account
6,114,317
3,003,291
Profit and loss reserves
(6,867,716)
(3,661,400)
Total equity
(752,424)
(657,424)
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
For the financial year ended 31 October 2022 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
DUCENTIS BIOTHERAPEUTICS LTD.
BALANCE SHEET (CONTINUED)
AS AT
31 OCTOBER 2022
31 October 2022
- 2 -
The financial statements were approved by the board of directors and authorised for issue on 27 July 2023 and are signed on its behalf by:
Mr S Burrows
Director
Company Registration No. 09307415
DUCENTIS BIOTHERAPEUTICS LTD.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2022
- 3 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 December 2020
685
3,003,291
(2,258,441)
745,535
Period ended 31 October 2021:
Loss and total comprehensive income for the period
-
-
(1,402,959)
(1,402,959)
Balance at 31 October 2021
685
3,003,291
(3,661,400)
(657,424)
Year ended 31 October 2022:
Loss and total comprehensive income for the year
-
-
(3,206,316)
(3,206,316)
Issue of share capital
7
290
3,111,026
-
3,111,316
Balance at 31 October 2022
975
6,114,317
(6,867,716)
(752,424)
DUCENTIS BIOTHERAPEUTICS LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2022
- 4 -
1
Accounting policies
Company information
Ducentis BioTherapeutics Ltd. is a private company limited by shares incorporated in England and Wales. The registered office is Suite 2 First Floor, 10 Temple Back, Bristol, BS1 6FL.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.3
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Computers
25% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.4
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
DUCENTIS BIOTHERAPEUTICS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
1
Accounting policies
(Continued)
- 5 -
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.5
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.6
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.7
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
DUCENTIS BIOTHERAPEUTICS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
1
Accounting policies
(Continued)
- 6 -
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
1.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
1.12
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
DUCENTIS BIOTHERAPEUTICS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 7 -
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Total
2
6
3
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 November 2021
1,489
Disposals
(1,489)
At 31 October 2022
Depreciation and impairment
At 1 November 2021
869
Depreciation charged in the year
372
Eliminated in respect of disposals
(1,241)
At 31 October 2022
Carrying amount
At 31 October 2022
At 31 October 2021
620
4
Debtors
2022
2021
Amounts falling due within one year:
£
£
Corporation tax recoverable
332,256
Other debtors
1,614
8,561
1,614
340,817
DUCENTIS BIOTHERAPEUTICS LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2022
- 8 -
5
Creditors: amounts falling due within one year
2022
2021
£
£
Bank loans and overdrafts
3,449
Trade creditors
5,766
28,822
Taxation and social security
1,466
Other creditors
775,262
258,347
781,028
292,084
6
Creditors: amounts falling due after more than one year
2022
2021
£
£
Convertible loans
1,331,100
7
Called up share capital
2022
2021
£
£
Ordinary share capital
Issued and fully paid
5,792,836 (2021: 4,706,207) Ordinary Shares of 0.0001p each
580
471
3,949,997 (2021: 2,142,857) Ordinary A Shares of 0.0001p each
395
214
0 (2021: 2) Deferred Shares of 0.0001p each
-
-
975
685
The 2 deferred Shares of £0.0001 each were cancelled on 9 September 2022.
8
Related party transactions
As a wholly owned subsidiary undertaking of Arcutis Biotherapeutics Inc., the company has taken advantage of the exemption in FRS 102 Section 33.1A and has not disclosed transactions and outstanding balances with Arcutis Biotherapeutics Inc.
9
Parent company
The ultimate controlling party is Arcutis Biotherapeutics, Inc., a company registered in Delaware, US with the address of 3027 Townsgate Road, Suite 300. Westlake Village, CA 91361.
On 8 September 2022, Arcutis Biotherapeutics Inc. acquired 100% of the shares in Ducentis BioTherapeutics Ltd.
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