Annual Report & Financial Statements
for the year ended 31 December 2023
Company Registration No. 12819145 (England and Wales)
Contents
Page
Corporate Information 2
Chairman’s Statement 3
Board of Directors and Senior Management 6
Directors’ Report 9
Strategic Report 13
Governance Report 21
Remuneration Committee Report 25
Audit Committee Report 31
Nomination Committee Report 33
Independent Auditors’ Report 34
Consolidated Statement of Comprehensive Income 41
Consolidated Statement of Financial Position 42
Company Statement of Financial Position 43
Consolidated Statement of Changes in Equity 44
Company Statement of Changes in Equity 45
Consolidated Statement of Cash Flow 46
Company Statement of Cash Flow 47
Notes to the Financial Statements 48
Annual Report & Financial Statements 2023 1
Corporate Information
Directors
Stephen West
Trevor Ajanthan (Ajan) Reginald
Prof. Sir Martin Evans
Dr Darrin Disley
Ms Jean Duvall
Dr Simon Sinclair
Dr Michael Stein
Company Secretary
Orana Corporate LLP
Registered Office
85 Great Portland Street
First Floor
London W1W 7LT
Registered Number
12819145
Joint Brokers
Hybridan LLP Optiva Securities Limited
Moor Place, 1 Fore St Ave 7 Harp Lane
London EC2Y 9DT London EC3R 7DP
Independent Auditor
RPG Crouch Chapman LLP
40 Gracechurch St
London EC3V 0BT
Solicitors
RPC
Tower Bridge House
St Katharine's Way
London E1W 1AA
Principal Bankers
HSBC
Level 8, 1 Centenary Square
Birmingham B1 1HQ
Registrars
Share Registrars Limited
27/28 Endcastle Street
London W1W 8DH
2 Roquefort Therapeutics plc
Annual Report & Financial Statements 2023 3
Chairman’s Statement
I am pleased to report Roquefort Therapeutics’ audited financial statements and strategic progress to
shareholders for the year ended 31 December 2023. During the period the Company continued to progress its
corporate strategy, which is to identify the next generation of medicines for the most difficult to treat cancers
with a high mortality rate, develop medicines in-house and with academic partners through the pre-clinical phase
to clinical trial readiness and IND filing stage before licensing or sale to big pharma.
Diagnostic Licencing Agreement
2023 started with significant momentum, with the Group’s Midkine antibody program, targeting metastatic breast
cancer and metastatic lung cancer, successfully demonstrating in vivo safety in pre-clinical development
programs carried out by leading cancer research groups. Notably in February, Roquefort Therapeutics validated
Midkine as a target by signing a Licence and Royalty Agreement with Randox Laboratories (“Randox”) in relation
to the Group’s Midkine antibody portfolio. In FY23 the Company received an upfront non-refundable payment of
£200,000, with further milestone payments expected in 2024 and royalty payments expected to commence in
2025. Randox is developing a diagnostic to identify patients with cancers that overexpress Midkine which is highly
synergistic with Roquefort Therapeutics’ development of first-in-class cancer medicines. Roquefort Therapeutics
and Randox are also collaborating in research programs to identify new diagnostics for Midkine overexpressed
cancers that may be treatable with the Company’s Midkine therapeutics.
To help drive drug development programs forward, in March 2023, the Company formed a Scientific Advisory
Board, working closely with Chief Scientific Officer Professor Sir Martin Evans. The Scientific Advisory Board is
comprised of experienced Professors Jo Martin, Trevor Jones and Armand Keating, who together are a team of
researchers, biopharmaceutical innovators and clinicians with an emphasis on linking pre-clinical research, clinical
trials, production of medicines and the care of patients. The Company is utilising their drug development expertise
to complete pre-clinical development to reach key milestones and realise the value of the IP retained within the
Company’s portfolio, either via licensing transactions or a clinical program sale.
Pre-clinical Development
The Roquefort Therapeutics portfolio consists of novel patent protected pre-clinical anti-cancer medicines,
consisting of five best in class medicines:
l Midkine antibodies with significant in vivo efficacy and toxicology studies, and orphan drug indication;
l Midkine RNA oligonucleotide therapeutics with novel anti-cancer gene editing action;
l Midkine mRNA therapeutics targeting solid tumours;
l STAT-6 siRNA therapeutics targeting solid tumours with significant in vivo efficacy; and
l MK cell therapy with direct and Natural Killer cell-mediated anti-cancer action.
The Company continued the encouraging pre-clinical development seen in 2022 throughout 2023. In June we
completed with our research partners, the Olivia Newton John Cancer Research Institute and Hawkins Laboratory
at La Trobe University, Melbourne, the first in vivo efficacy results for our anti-Midkine patented antibodies
CAB-101 (ROQA2) and CAB-102 (ROQA1). The in vivo efficacy study tested the anti-cancer killing ability of
CAB-101and CAB-102 in a validated experimental model of osteosarcoma, a third indication. Treatment with
CAB-101 was found to produce a statistically significant reduction in lung metastasis, and CAB-102 was found
to reduce proliferation of the primary tumour. Osteosarcoma is our third indication in the anti-Midkine antibody
program and our first orphan drug indication.
Osteosarcoma is the Company's first orphan drug indication and reflects the strategic decision to target cancer
niches in which there remains a high unmet clinical need, an accelerated development pathway and the potential
to offer a best-in-class treatment in a significant market niche. There are commercial benefits to an orphan drug
indication such as market exclusivity for 7 years in the USA and up to 10 years in the UK and EU, tax credits for
the clinical drug testing cost and fee reductions.
In March 2023 we announced that Roquefort Therapeutics had enhanced the portfolio with the creation of a new
novel family of mRNA Therapeutics. This new platform of mRNA therapeutics was developed within budget
internally and consists of four mRNA pre-clinical therapeutics targeting Roquefort Therapeutics' novel Midkine
target. In June we achieved positive in vivo results in our anti-cancer mRNA therapeutic in breast and liver cancer,
where the studies demonstrated a statistically significant reduction in both cancer growth and migration. We
further consolidated our leadership position in the Midkine field by updating our filed patents to protect the mRNA
compositions and methods. The Company is particularly excited about this program because the mRNA cancer
market is a highly attractive new field of medicine (~$31 billion, 7.8% CAGR) and is led by Pfizer, Moderna and
BioNTech. Roquefort Therapeutics is well positioned in this field, with four mRNA sequences that uniquely target
Midkine. The Company completed in vivo studies in March 2024 with positive results (refer Post Period End section
for further details).
In June 2023, our anti-cancer Midkine RNA oligonucleotide program targeting Midkine expressing cancers showed
further pre-clinical progress having produced >90% in vitro efficacy in human liver and neuroblastoma cancer
cells. The studies were conducted with the Company’s strategic research partnerships at the Faculty of Medicine
and Health at the University of Sydney and the Immune Oncology Laboratory at the School of Biomedical Sciences,
University of New South Wales. The Company believes liver cancer to be an attractive market niche with the global
liver cancer drug market estimated at US$2.4 billion in 2022 and is projected to reach US$9.3 billion by 2030, at
a CAGR of 18.6% according to the market research firm Research And Markets in February 2023.
The achievements of 2023 have enabled Roquefort Therapeutics to develop a highly synergistic approach to the
target, Midkine. Our proprietary combination of RNA oligonucleotides attacks a different Midkine region versus
our antibodies and mRNA, and this diversity of targeting regions may be helpful in developing mono or
combination therapies going forward, which has potential commercial appeal.
Following the acquisition of Oncogeni in September 2022, which pivoted Roquefort Therapeutics into a material
oncology group, the Company acquired two families of innovative cell and RNA oncology medicines, both in
pre-clinical development, Mesodermal Killer (“MK”) cells and small interfering RNA (“siRNA”) therapeutics.
Bothprograms saw progress during 2023.
In August 2023, Roquefort Therapeutics announced the development of new novel siRNA therapeutics and
strengthened the IP position with a new patent filing for the novel anti-cancer siRNA therapeutics. Professor
Graham Robertson, Vice President of Drug Discovery developed four additional siRNA sequences to complement
the existing siRNA portfolio. These sequences are being developed in combination with nano-particle delivery
systems to target the hard-to-treat, high mortality solid cancers including colon and breast cancer. In March 2024
we announced that in validated in vitro models of colon cancer, results demonstrated efficacy in four new siRNA
sequences in reducing STAT-6 expression by 40-50% (refer Post Period End section). The Company is encouraged
by the commercial potential of its siRNA targets STAT-6 and SH2, following Sanofi’s (NASDAQ: SNY) licencing
transaction with Recludix which included a US$125 million upfront payment, and total deal of up to US$ 1.2 billion
for a pre-clinical program targeting STAT-6 and SH2. Roquefort Therapeutics is particularly encouraged by this
as our siRNA programs are also in pre-clinical development and target STAT-6 and the SH2 domain and have
shown significant in vitro anti-cancer activity.
The Company announced in November 2023 that its proprietary novel MK cell program reached a significant
preclinical milestone during the period. MK cells were tested in combination with Natural Killer cells (“NK cells”).
The activation of NK cells produced up to a two-fold increase in cytotoxicity over NK cells alone in three difficult
to treat cancers: ovarian cancer, acute myeloid leukaemia and multiple myeloma. The Company believes this
demonstration of the activation of NK cells in multiple cancers is a significant milestone because the NK cell
activation is a highly attractive modality for large pharmaceutical companies. Recent transactions in this
promising market include the $1.4 billion partnership between Sanofi and Innate Pharma announced in December
2022 and >$300 million Gilead and Dragonfly Therapeutics transaction in May 2022 for Dragonfly’s proprietary
activators of NK cells. The Company’s MK cells progressed into further in vivo studies in validated models of NK
cell activation and cancer cytotoxicity with positive results announced in February 2024 (refer Post Period End
section for further details).
4 Roquefort Therapeutics plc
Chairman’s Statement
continued
Chairman’s Statement
continued
Out-Licencing Discussions (Therapeutics)
In line with our strategy, the Company commenced confidential out-licencing discussions with potential partners
in 2023, including large pharmaceuticals companies and a specialist private equity fund. The programs and
jurisdictions being negotiated include the Midkine antibodies and STAT-6 siRNA programs, and relate to licences
for the US, Europe and Japan markets.
Post Period End
During the first quarter of 2024 the Company made further progress across its pre-clinical drug development
program with positive results reported for the MK cell therapy program (February 2024) and the Midkine mRNA
and STAT-6 siRNA programs (March 2024):
l MK Cell Therapy: the Company continued studies in validated models of NK cell activation and cytotoxicity
and demonstrated an anti-cancer effect in leukaemia. This efficacy was superior to NK cells alone confirming
that the MK cells activate NK cells. NK cell activation is a new field with high commercial potential in which
large pharmaceutical partners completed significant deals in 2022 and 2023;
l Midkine mRNA: the latest experiments combined the mRNA with a LNP delivery system in a validated in
vivo model of liver cancer and demonstrated the safety and efficacy in reducing functional Midkine of the
novel mRNA LNP combination. This represents a significant milestone in both the discovery of a novel mRNA
therapeutic and in the safe combination with an LNP to allow for the delivery of the mRNA as an anti-cancer
medicine; and
l STAT-6 siRNA: the Company continued the development of its novel STAT-6 medicines in validated in vitro
models of colon cancer with the results demonstrating efficacy of the four new siRNA sequences in reducing
STAT-6 expression by 40-50%.
The Company continued to engage in confidential out-licencing discussions with potential partners and the
Company will make an announcement should a binding agreement be reached with one or morepartners.
Strategy & Outlook
Through the material strategic progress delivered over the course of FY2023, Roquefort Therapeutics is looking
to build on its successful pre-clinical development of its fiv
e pre-clinical programs to deliver at least one
out-licencing transaction during 2024. We believe that during 2023 we have delivered on our strategy to select
and acquire novel medicines and to develop them to reach significant milestones, and to a le
vel that attracts
interest from potential licencing partners.
Roquefort Therapeutics is well positioned in this market to create shareholder value by securing a licencing deal,
with newly validated targets (like STAT-6 and Midkine) novel modalities (like siRNA, mRNA and cell therapy)
garnering high deal values because they offer the potential to create first-in-class medicines which ha
ve a greater
likelihood of generating blockbuster (multi-billion dollar) revenues. Our strategy fits this paradigm, wher
eby we
create significant v
alue by discovering these first-in-class medicines before the market recognises them and
enhance their value with targeted R&D to optimise the appeal to Big Pharma. Our portfolio has interest from Big
Pharma and private equity, and in line with our strategy, we remain in discussions with these potential partners.
The Chairman’s Statement should be read as part of the Strategic Report.
Stephen West,
Executive Chairman
25 April 2024
Annual Report & Financial Statements 2023 5
6 Roquefort Therapeutics plc
Board of Directors
Stephen West
Executive Chairman
Stephen is a Fellow Chartered Accountant with over 30 years of financial and corporate experience gained in
public practice, the resource sector, life sciences and investment banking. Stephen has a proven track record in
working with growth companies with extensive experience in IPOs, secondary listings, corporate finance,
fundraising and investor relations. Stephen is currently a non-executive director of EnergyPathways plc (AIM:EPP).
Ajan Reginald
Chief Executive Officer
Ajan is an experienced biotechnology CEO with a track record in drug development, biotech transactions and
commercialisation. Over 20 years, he has served as the Global Head of Emerging Technologies for Roche Group
(SWX:ROG), Chief Operating Officer and Chief T
echnology Officer of Novacyt S.A (LON:NCYT) and CEO of Celixir Ltd.
With Prof. Sir Martin Evans, Ajan founded Celixir, and developed a novel cardiac cellular medicine which completed
pre-clinical development and won FDA, MHRA and EU regulatory trial approvals. Celixir completed a licensing for the
Japan market only with Daiichi Sankyo, a Japanese Big Pharma company which included a £12.5 million upfront
payment and a £5 million equity investment which valued Celixir at ~£220M.
Ajan is an alumni of Harvard Business School (AMP) and is recipient of the Fulbright Scholarship. He is also a graduate
of the University of Oxford (MSc Experimental Therapeutics), Kellogg Business School (MBA) Northwestern University
and University of London (BDS). He has represented England at the Hockey Masters World Cup and European
Championships.
Professor Sir Martin Evans, Nobel Laureate
Chief Scientific Officer
Sir Martin was the first scientist to identify embr
yonic stem cells, which can be adapted for a wide variety of
medical purposes. His discoveries are now being applied in virtually all areas of biomedicine - from basic research
to the development of new therapies. In 2007, he was awarded the Nobel Prize for Medicine, the most prestigious
honour in world science, for these “ground-breaking discoveries concerning embryonic stem cells and DNA
recombination in mammals.”
Sir Martin has published more than 120 scientific papers. He was elected a F
ellow of the Royal Society in 1993
and is a founder Fellow of the Academy of Medical Sciences. He was awarded the Walter Cottman Fellowship
and the William Bate Hardy Prizes in 2003 and in 2001 was awarded the Albert Lasker Medal for Basic Medical
Research in the US. In 2002 he was awarded an honorary doctorate from Mount Sinai School of Medicine in New
York, regarded as one of the world's foremost centres for medical and scientific training. He has also r
eceived
honorary doctorate awards from the University of Bath, University of Buckinghamshire, University College London,
University of Wales and the University of Athens. Sir Martin gained his BA in Biochemistry from Christ College,
University of Cambridge in 1963. He received an MA in 1966 and a DSc in 1966. In 1969 he was awarded a PhD
from University College, London. He joined the Cardiff University School of Biosciences in 1999. He was knighted
in 2004 for his services to medical science and in 2009 was awarded the Gold Medal of the Royal Society of
Medicine in recognition of his valuable contribution to medicine. In 2009 he also received the Baly Medal from
the Royal College of Physicians and the Copley Medal, the Royal Society's oldest award, joining an eminent list of
previous recipients including Albert Einstein.
Board of Directors and Senior Management
Board of Directors and Senior Management
continued
Annual Report & Financial Statements 2023 7
Dr Darrin Disley, OBE
Non-Executive Director
Darrin is a renowned scientist, entrepreneur, angel investor and enterprise champion who has started, grown, or
invested in over 40 start-up life science, technology and social enterprises, raising US$600 million in business
financing and closing US$700 million in commer
cial deals. He was CEO of Horizon Discovery Group plc for
11years, during which he led the company from start-up through a US$113 million IPO, and rapid scale-up
powered by multiple acquisitions of US peer companies to become a global market leader in gene editing and
gene modulation technologies. He was awarded a lifetime Queen's Award for Enterprise Promotion in 2016 for
his work in promoting enterprise across the UK and appointed OBE in 2018 for his services to business and
enterprise in the healthcare sector.
Ms Jean Duvall
Non-Executive Director
Jean is highly accomplished in the biotech and pharma sector, with over 25 years experience in executive roles
in the industry. During this time, Jean acted for Ferring Pharmaceuticals, as one of the Executive Board Members
who built the company from a US$700 million to US$2 billion in revenue. Jean has a significant track r
ecord in
corporate development having led multiple successful M&A, divestment and licensing deals throughout her career.
She previously had the role of General Counsel at Elan Corporation and was legal lead, negotiating the divestment
of over $2bn in assets. Additionally, she has co-founded and led biopharma start-ups including Trizell and Amzell,
resulting in multiple products having successful phase 2 and 3 clinical studies. Jean is currently CEO and
co-founder of ReproNovo SA and a non-executive director of Ondine Biomedical Inc. (AIM:OBI).
Dr Simon Sinclair
Non-Executive Director
Simon is a senior executive physician scientist with over 20 years’ pharma, medtech and consumer healthcare
industry experience. He is the former Chief Safety Officer at Reckitt Benckiser and was pr
eviously at Johnson and
Johnson Medical Devices, first as International Clinical Dir
ector, then leading Medical Affairs for its EMEA region.
Prior to this, Simon led translational medicine efforts and the early clinical development at Merck and Co (MSD)
in the USA. Originally trained as an ophthalmologist, Simon holds a medical degree and a PhD in neural
transplantation from the University of Cambridge. Simon is currently a non-executive director of Ondine
Biomedical Inc. (AIM:OBI) and a non-executive director at Renovos Biologics Limited.
Dr Michael Stein
Non-Executive Director
Michael is a business leader and strategic adviser with C-suite experience in healthcare. Michael was the
founding CEO of Valo Therapeutics and of OxStem Ltd. In addition, Michael has served as founding CEO for
Doctor Care Anywhere, acquired by Synergix in 2015. In 2001, he co-founded the Map of Medicine Ltd (the
Map) with University College London. As founding CEO (and later CMO), the Map was nationally licensed across
NHS England (2005-15) and acquired by Hearst Business Media (HBM) in 2008, after which Michael transitioned
to executive vice-president of healthcare innovation. Michael graduated as a medical doctor (Honours) and
biochemist (First Class Honours) from the University of Cape Town (1988) and from the University of Oxford
(Rhodes Scholar) with a doctorate in Physiological Sciences (Immunology).
Board of Directors and Senior Management
continued
8 Roquefort Therapeutics plc
Senior Management
Dr Graham Robertson
Vice President – Drug Discovery
Dr Robertson gained his PhD in molecular virology from Macquarie University, Australia before undertaking
Post-Doctoral training in gene regulation and nuclear architecture at Oxford. He returned to Australia as a
Post-Doc in the laboratory of Prof. Emma Whitelaw at University of Sydney where he set up a transgenic mouse
facility and discovered repeat-induced silencing as an epigenetic process on mammalian transgenes. Dr
Robertson then moved to Westmead Hospital Millennium Institute where he pursued studies on the fibr
otic liver
disease NASH and the impact of inducible xenobiotic/drug interactions on drug clearance pathways. A component
of this work involved creating a transgenic mouse model for studying gene regulation of human CYP3A4, the
main pathway for drug metabolism. The model was subsequently commercially leveraged as a screening tool
for drug development. At the ANZAC and Garvan Institutes in Sydney (2004-2014), Dr Robertson explored the
impact of cancer-associated inflammation in repressing drug clearance leading to excessive toxicity. Dr Robertson
also explored the link between chronic inflammation and disrupted energy metabolism as the basis for cancer
cachexia. A key discovery from this work was the activation of thermogenesis in white & brown fat, linked to body
wasting. These findings wer
e published in Cancer Research and Cell Metabolism where it was ranked amongst
the 10thhighest papers in the latter journal. He has published ~60 papers with >3,000 citations.
Dr Sabena Sultan
Vice President – Drug Development
Dr Sultan studied for her PhD in Cardiovascular Biology at Imperial College London and undertook postdoctoral
research at the Rayne Institute, University College London and worked within the Cardiovascular Department at
Kings College London as a British Heart Foundation Principle Grant Investigator. Dr Sultan was previously Global
Head of Research at Cell Therapy Limited, working to bring cellular therapies to clinic.
Annual Report & Financial Statements 2023 9
The Directors present their report with the audited financial statements of Roquefort Therapeutics plc
(“theCompany”) and its subsidiaries Lyramid Pty Limited (“Lyramid”), Oncogeni Ltd (“Oncogeni”) and Tumorkine
Pty Limited (“Tumorkine”) (together “the Group”) for the year ended 31 December 2023. A commentary on the
business for the year is included in the Chairman’s Statement on page 3. A review of the business is also included
in the Strategic Report on pages 13 to 30.
The Company’s Ordinary Shares are listed on the London Stock Exchange, on the Official List pursuant to
Chapter14 of the Listing Rules, which sets out the requirements for Standard Listings.
Directors
The Directors of the Company during the year and their beneficial interest in the Ordinary shares of the Company
at 31 December 2023 were as follows:
Ordinary
Director Position Appointed shares Warrants
Stephen West
1
Executive Chairman 17/08/2020 5,616,501 7,000,000
Ajan Reginald
Chief Executive Officer 16/09/2022 11,663,051 –
Sir Martin Evans
Chief Scientific Officer 16/09/2022 – –
Dr Michael Stein
Non-Executive Director 22/03/2021 – 2,000,000
Ms Jean Duvall Non-Executive Director 05/04/2022 – 300,000
Dr Simon Sinclair
2
Non-Executive Director 20/04/2022 96,336 300,000
Dr Darrin Disley Non-Executive Director 16/09/2022 1,495,901 –
1
4,628,485 Ordinary shares and 7,000,000 warrants held by Cresthaven Investments Pty Ltd ATF The Bellini Trust (a Company related to Stephen West);
2
300,000 warrants held by Livingstone Investment Holdings Ltd (a Company related to Simon Sinclair).
Qualifying Third Party Indemnity Provision
At the date of this report, the Company has a third-party indemnity policy in place for all Directors.
Substantial shareholders
As at 31 December 2023, the total number of issued Ordinary Shares with voting rights in the Company was
129,149,998. Details of the Company’s capital structure and voting rights are set out in note 19 to the financial
statements.
The Company has been notified of the following inter
ests of 3 per cent or more in its issued share capital as at
the date of approval of this report.
Number of % of
Party Name Ordinary Shares Share Capital
Ajan Reginald 11,663,051 9.00%
Abdelatif Lachab 7,750,000 6.00%
Jane Whiddon
1
7,300,000 5.65%
M Sheikh 5,744,870 4.45%
Stephen West
2
5,616,501 4.35%
Provelmare Holding Ltd 5,000,000 3.87%
Z Sheikh 4,018,910 3.11%
M Rollins 4,000,000 3.10%
K Fallon 3,905,215 3.02%
1
2,500,000 shares held by MIMO Strategies Pty Ltd (ATF the MIMO Trust); 4,100,000 shares held by 6466 Investments Pty Ltd; 700,000 shares held by Nautical
Holdings WA Pty Ltd – all of which are entities controlled by J Whiddon
2
4,628,485 Ordinary shares and 7,000,000 warrants held by Cresthaven Investments Pty Ltd ATF The Bellini Trust (a Company related to Stephen West).
Directors’ Report
10 Roquefort Therapeutics plc
Financial instruments
Details of the Company’s financial risk management objectives and policies as well as exposure to financial risk
are contained in the accounting policies and note 22 of the financial statements.
Greenhouse Gas (GHG) Emissions
The Group is aware that it needs to measure its operational carbon footprint in order to limit and control its
environmental impact. However, due to its operational footprint being limited to a laboratory leased from
September 2022 to 31 December 2023, consuming less than 40,000 kWh of energy, the Group is currently exempt
from GHG reporting requirements.
In the future, the Group will only measure the impact of its direct activities, as the full impact of the entire supply
chain of its suppliers cannot be measured practically.
TCFD Disclosure
The Group operated a leased lab facility from October 2022 until the agreement expired in December 2023. From
this point the Group outsourced laboratory work and does not intend to lease another facility in 2024. The Group
will therefore begin to consider its impact on the environment and the risks it faces from climate change, for the
first time during 2024 and expects to de
velop its sustainability plans over a 5 year period, commensurate with
the size of its operations. Climate change was not considered a principal risk or uncertainty for the year ended
31December 2023.
In line with the requirements of the Financial Conduct Authority’s Listing Rule 14.3.27R, and for the above reasons,
we note that we have not made the disclosures, in respect of the financial y
ear ended 31 December 2023, in line
with the recommendations and recommended disclosures of the TCFD.
Dividends
The Directors do not propose a dividend in respect of the year ended 31 December 2023.
Research and development, Future developments and events subsequent to the
year end
Further details of the Company’s research and development, future developments and events subsequent to the
year-end are set out in the Strategic Report on pages 13 to 20. Research and development costs incurred for the
year ended 31 December 2023 were £620,159 (2022: £319,315).
Corporate Governance
The Governance Report forms part of the Director’s Report and is disclosed on pages 21 to 24.
Going Concern
The Directors have prepared financial forecasts to estimate the likely cash requirements of the Group over the
period to 30 June 2025, given its stage of development and lack of recurring revenues. In preparing these financial
forecasts, the Directors have made certain assumptions with regards to the timing and amount of future
expenditure over which they have control. The Directors have considered the sensitivity of the financial for
ecasts
to changes in key assumptions, including, among others, potential cost overruns within committed spend, ability
to raise new funding and changes in exchange rates.
The Group’s available resources are sufficient to co
ver the Group’s plans to complete existing pre-clinical
development activities during 2024, however, they are not sufficient to co
ver existing committed costs and the
costs of planned activities for at least 12 months from the date of signing these consolidated and company
financial statements.
Directors’ Report
continued
Annual Report & Financial Statements 2023 11
The Directors plan to raise further funds during 2024 (either through licencing deals and/or other financing
arrangements) and have reasonable expectations that sufficient cash will be raised (either thr
ough licencing deals
and/or other financing arrangements) to fund the planned operations of the Gr
oup for a period of at least
12months from the date of approval of these financial statements. The funding r
equirement indicates that a
material uncertainty exists which may cast significant doubt o
ver the Group’s and Company’s ability to continue
as a going concern, and therefore its ability to realise its assets and discharge its liabilities in the normal course
of business.
After due consideration of these forecasts, current cash resources, including the sensitivity of key inputs and
success in raising new funding the Directors consider that the Group will have adequate financial r
esources to
continue in operational existence for the foreseeable future (being a period of at least 12 months from the date
of this report) and, for this reason, the financial statements ha
ve been prepared on a going concern basis. The
financial statements do not include the adjustments that would be r
equired should the going concern basis of
preparation no longer be appropriate.
Principal Activities
The Company’s principal activity in the reporting period was the pre-clinical development of next generation
medicines focused on hard-to treat cancers.
Auditors
On 23 November 2023, BDO LLP resigned as the Group’s auditors and confirmed that there were no circumstances
connected with their resignation which they considered should be brought to the attention of the Company's
members or creditors in accordance with Section 519 of the Companies Act 2006.
On 23 November 2023 it was announced that the Company had appointed RPG Crouch Chapman LLP as its
auditors with immediate effect. The appointment of RPG Crouch Chapman LLP will be subject to approval by
shareholders at the next Annual General Meeting of the Company.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report alongside the financial statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial y
ear. Under that law the
Directors have prepared the financial statements in accor
dance with UK adopted International Accounting
Standards.
Under company law the Directors must not approve the financial statements unless the
y are satisfied that they
give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that
year. The Directors are also required to prepare financial statements in accor
dance with the rules of the London
Stock Exchange for companies with a Standard Listing.
In preparing these financial statements, the Dir
ectors are required to:
l Select suitable accounting policies and then apply them consistently;
l Make judgements and accounting estimates that are reasonable and prudent;
l State whether applicable UK adopted International Accounting Standards have been followed, subject to
any material departures disclosed and explained in the financial statements; and
l Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
Directors’ Report
continued
Directors’ Report
continued
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the financial statements and the Remuneration Committee Repor
t
comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. They are also
responsible to make a statement that they consider that the annual report and accounts, taken as a whole, is fair,
balanced, and understandable and provides the information necessary for the shareholders to assess the
Company’s position and performance, business model and strategy.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included
on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of
the financial statements ma
y differ from legislation in other jurisdictions.
Statement of Directors’ responsibilities pursuant to Disclosure and Transparency
Rules
Each of the Directors, whose names and functions are listed on pages 6 to 7 confirm that, to the best of their
knowledge and belief:
l the financial statements prepared in accordance with UK adopted International Accounting Standards, give
a true and fair view of the assets, liabilities, financial position and loss of the Group and Company; and
l the Annual Report and financial statements, including the Strategic Report, includes a fair review of the
development and performance of the business and the position of the Group and Company, together with
a description of the principal risks and uncertainties that they face.
Disclosure of Information to Auditors
So far as the Directors are aware, there is no relevant audit information of which the Company’s auditors are
unaware, and each Director has taken all the steps that they ought to have taken as a Director in order to make
themselves aware of any relevant audit information and to establish that the Company’s auditors are aware of
that information.
This directors’ report was approved by the Board of Directors on 25 April 2024 and is signed on its behalf by:
Stephen West,
Executive Chairman
12 Roquefort Therapeutics plc
Strategic Report
Annual Report & Financial Statements 2023 13
The Directors present the Strategic Report of the Company and the Group for the year ended 31 December 2023.
Section 172(1) Statement - Promotion of the Company for the benefit of the
members as a whole
The Directors believe they have acted in the way most likely to promote the success of the Company for the
benefit of its members as a whole, as r
equired by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
l Consider the likely consequences of any decision in the long term;
l Act fairly between the members of the Company;
l Maintain a reputation for high standards of business conduct;
l Consider the interests of the Company’s employees;
l Foster the Company’s relationships with suppliers, customers and others; and
l Consider the impact of the Company’s operations on the community and the environment.
We aim to work responsibly with our stakeholders, including suppliers. The key Board decisions made in the year
and post year end are set out below:
Significant events / decisions Key s172 matter(s) affected Actions and Consequences
Entering into a licence Shareholders and Business The Group entered into a
agreement with Randox
Relationships material sales contract with
Randox to licence out its
technology for diagnostics.
The agreement is intended to
generate another revenue
stream from diagnostics
for the Group.
Portfolio optimisation Shareholders and Business The Group constantly monitors
Relationships the commercial viability of its
programmes to ensure that
the optimum mix is carried
forward.
Interests of Employees
The Company’s Governance Report at pages 21 to 24 of this Annual Report sets out (under board responsibilities)
the processes in place to safeguard the interests of employees.
Foster business relationships with suppliers, joint venture partners and others
Potential suppliers and joint venture partners are considered in the light of their suitability to comply with the
Company’s policies.
Impact of operations on the community and environment
The Company will continue to monitor the future impact of any new potential research facilities on the community
and environment.
Maintain a reputation for high standards of business conduct
The Governance Report at pages 21 to 24 sets out the Board and Committee structures and Board and Committee
meetings held during the year, together with the experience of executive management and the Board and the
Company's policies and procedures.
Strategic Report
continued
14 Roquefort Therapeutics plc
Act fairly between members of the Company
The Board takes feedback from a wide range of shareholders (large and small) and endeavours at every
opportunity to pro-actively engage with all shareholders (via regulatory news reporting-RNS) and engage with
any specific shar
eholders in response to particular queries they may have from time to time. The Board considers
that its key decisions during the year have impacted equally on all members of the Company.
Review of Business in the Year
Operational Review
The Company’s principal activity is set out in the Directors’ Report on page 11.
During the year, the Company continued to progress its novel patent protected pre-clinical anti-cancer medicines
through a combination of partnerships with leading academic cancer research centres and at the Company's
state of the art laboratory in Stratford-upon-Avon.
In February 2023, Roquefort Therapeutics validated Midkine as a target by signing a Licence and Royalty
Agreement with Randox Laboratories (“Randox”) in relation to the Group’s Midkine antibody portfolio. In FY23 the
Company received an upfront payment of £200,000, with further milestone payments expected in 2024 and royalty
payments expected to commence in 2025. Randox is developing a diagnostic to identify patients with cancers
that overexpress Midkine which is highly synergistic with Roquefort Therapeutics’ development of first-in-class
cancer medicines.
During 2023 ,the Group completed pre-clinical development programs with the following leading academic cancer
research centres:
l Olivia Newton-John Cancer Research Institute, La Trobe University, Melbourne
o Breast cancer metastasis antibody programs: in vivo safety was successfully demonstrated in January
2023.
l Lowy Cancer Research Centre, University of New South Wales
o Liver and Colorectal cancer Midkine RNA and STAT-6 siRNA programs: the in vitro Midkine RNA
oligonucleotide study confirmed in June 2023 that the Company’s novel anti-sense oligonucleotides
produced a novel non-functional Midkine protein that has been shown to produce >90% in vitro efficacy
(at the mRNA level) in human liver cancer and neuroblastoma cancer cells.
l Hawkins Laboratory Biochemistry and Genetics, La Trobe University, Melbourne
o Lung cancer metastasis antibody programs: in vivo safety was successfully demonstrated in January
2023, and in vivo efficacy results were released in June 2023 which showed a statistically significant
reduction in lung metastasis, and a reduced proliferation (growth rate) of the primary tumour. The
efficacy study was carried out in a validated experimental model of osteosarcoma.
l School of Medical Sciences, University of Sydney
o Midkine RNA programs: in June 2023 a proprietary combination of the Company’s Midkine RNA
oligonucleotides demonstrated in vitro efficacy in hepatocellular carcinoma (HCC) liver cancer cells
producing a significant reduction in full length Midkine and generated a novel non-functional Midkine.
In March 2023 the Company announced the successful development of a new novel platform of anti-cancer
mRNA therapeutics, being the Company's fifth pr
ogram and the third in its Midkine family. In June 2023 the
Company successfully completed in vitro studies for the anti-cancer mRNA therapeutic in breast and liver cancer.
The studies demonstrated a statistically significant r
eduction in both proliferation (cancer growth) and migration.
In August 2023 the Company announced the successful development of new siRNA sequences and new patent
filing for its family of no
vel anti-cancer siRNA therapeutics. The new siRNA sequences expanded the Company's
portfolio of siRNA medicines that attack the targets STAT-6 (Signal Transducer and Activator of Transcription)
and its SH2 (Src-homology-2) domain.
Strategic Report
continued
Annual Report & Financial Statements 2023 15
During the year the Company tested its MK cells in combination with natural killer (“NK”) cells with positive results,
announced in November 2023, showing: (1) the activation of NK cells; and (2) that this activation produced up to
a two-fold increase in cytotoxicity over NK cells alone in three different difficult to tr
eat cancers, which was
statistically significant.
Events since the year end
There have been no significant events subsequent to 31 December 2023.
Financial review
Results for the year to 31 December 2023
The Consolidated Statement of Comprehensive Income for the year shows a loss of £1,744,540 (2022: loss of
£1,615,417) and the Consolidated Statement of Financial Position at 31 December 2023 shows net equity of
£5,499,543 (2022: £7,206,636) for the Group.
The total comprehensive loss for the year of £1,717,495 (2022: loss of £1,630,406) occurred as a result of on-going
research and development costs and administrative expenses required to operate the Company.
The Group generated £200,000 (2022: £0) in revenue from an exclusive licence and royalty agreement, for its
technology to be used in medical diagnostics. The revenue was recorded under IFRS 15 in which Group recognised
milestone revenue upon the completion of certain milestones. The initial amount represents the £200,000
non-refundable deposit with the remainder of the revenue to be received subject to certain commercial and
technical milestones.
Administrative expenses increased to £1,499,193 (2022: £1,306,561) mainly due to Directors’ and employee costs
increasing to £1,087,947 (2022: £573,538), consulting and professional fees increasing to £217,876 (2022:
£209,768) reflecting an increase in staff and operational activities during the year. Research and development
expenditure increased to £620,159 (2022: £319,315) as the Group carried out external studies with the University
of Western Sydney for the Midkine RNA oligonucleotide pre-clinical program in the first half of the y
ear and
commenced internal and external studies on the other programs later in the year.
Cash flow
Net cash outflow for the Group for 2023 was £1,786,164 (2022: £1,421,258 inflow).
Net cash used in investing activities for 2023 decreased to £52,573 (2022: £103,478). In 2023 this activity was
for the purchase of fix
ed assets, whereas the 2022 figure relates to the acquisition of Oncogeni Ltd. There were
no business acquisitions in the current year.
Net cash used in financing activities for 2023 was £58 (2022: £3,121,202 inflow). The 2022 figur
e reflects the
receipt of proceeds from an equity placement undertaken in December 2022 for the acquisition of Oncogeni Ltd.
There were no fundraising events in the current year.
Closing cash
As at 31 December 2023, the Group held £537,322 (2022: £2,322,974) of cash.
Key Performance Indicators
The Company’s non-financial KPIs are positive R&D results within the existing pre-clinical portfolio, the
development of new novel anti-cancer therapeutics, the registration of new patents to protect the clinical
advancements in anti-cancer therapeutics being achieved during the pre-clinical stages of drug discovery and
entering into licencing deals with other companies.
The Company’s financial KPIs ar
e the Company’s cash runway and budgeted R&D spend compared to actuals.
16 Roquefort Therapeutics plc
Position of Company’s Business
At the year end
At the year end the Company’s Statement of Financial Position shows net assets totalling £5,981,627 (2022:
£7,481,379). It is likely the Company will need to raise further funds (either through licencing deals and/or other
financing arrangements) to co
ver its plans to complete existing pre-clinical development activities and complete
licencing negotiations. As at reporting date the Directors are confident in their ability to raise fur
ther funds either
through licencing deals and/or other financing arrangements.
Environmental matters
The Board contains personnel with a good history of running businesses that have been compliant with all relevant
laws and regulations and there have been no instances of non-compliance in respect of environmental matters.
Employee information
As at the date of this report, the Company has an Executive Chairman, two Executive Directors and four
Non-Executive Directors. The Company is committed to gender equality and, as future roles are identified,
awide-ranging search would be completed with the most appropriate individual being appointed irrespective
ofgender.
A split of our employees and directors by gender at the date of this report, is shown below:
Male Female
Directors 6 1
Employees 1 1
Total employees (including directors) 7 2
Social/Community/Human rights matters
The Company ensures that employment practices take into account the necessary diversity requirements and
compliance with all employment laws. The Board has experience in dealing with such issues and sufficient training
and qualifications to ensur
e they meet all requirements.
Anti-corruption and anti-bribery policy
The government of the United Kingdom has issued guidelines setting out appropriate procedures for companies
to follow to ensure that they are compliant with the UK Bribery Act 2010. The Company has conducted a review
into its operational procedures to consider the impact of the Bribery Act 2010 and the Board has adopted an anti-
corruption and anti-bribery policy.
Strategic Report
continued
Annual Report & Financial Statements 2023 17
Principal Risks and Uncertainties
The Group operates in an uncertain environment and is subject to a number of risk factors. The Directors consider
the following risk factors are of particular relevance to the Group’s activities although it should be noted that this
list is not exhaustive and that other risk factors not presently known or currently deemed immaterial may apply.
Issue Risk/Uncertainty Mitigation
The CEO actively manages the
commercial activities of the Group
as it develops.
The CEO and the Directors oversee
the progress of the development of
the Group’s research programs and
associated technologies and
ensure funding is in place to
support the necessary trials and
further development steps as these
come on stream.
The generation of revenues is difficult to
predict and there is no guarantee that the
Group will generate significant r
evenues in
the foreseeable future.
The Group will face risks frequently
encountered by pre-revenue businesses
looking to bring new products to the
market. There is also no guarantee that the
intellectual property held will ultimately
result in a commercially viable product. It is
also possible that technical and/or
regulatory hurdles could lengthen the time
required for the delivery of such a product.
The Group’s future growth will also depend
on its ability to secure commercialisation
partnerships on appropriate terms, to
manage growth and to expand and improve
operational, financial and management
information, quality control systems and its
commercialisation function on a timely
basis, whilst at the same time maintaining
effective cost controls.
The Group is not breakeven
and there is no guarantee
that it will generate
significant pr
ofits in the
near future
The Directors engage in continuous
dialogue with the CEO and senior
scientific staff to critically r
eview
the technical risks. The Board has
established a Scientific Advisor
y
Board to support them in this
review process.
All therapeutic research and development
programs carry technical risks, including
the programs undertaken by the Group.
These risks include: those associated with
delays in development of effective and
potent drugs; failure of delivery by third
party suppliers of research services or
materials essential to the programs; and
outcomes of clinical testing. There is no
guarantee that these technical risks can be
effectively overcome, and a successful,
approved product can be developed.
Furthermore, the Group is pursuing
relatively new drug classes. Whilst several
examples of approved drugs now exist in
these classes, as yet no such drug has been
developed for the Group’s targets. There is
a risk that these novel classes of drugs may
not be an effective way of modulating the
target’s expression to exert appropriate
clinical benefit in the tar
get conditions.
Research and development
risks carry technical risks,
including the programs
undertaken by the Group
and there is no guarantee
that these technical risks
can be effectively overcome,
and a successful, approved
product can be developed
Strategic Report
continued
18 Roquefort Therapeutics plc
Issue Risk/Uncertainty Mitigation
The Scientific Advisory Board will
be critical in supporting the Board
in understanding and mitigating
these risks. Even so, a sudden
unforeseen change in the
regulations could have a material
adverse impact on the
development program.
The Group cannot guarantee that
the proposed development work
will result in an efficacious
treatment, or even if it does, that the
drug will be approved by regulatory
authorities.
Key regulatory focus areas are safety and
efficacy
, and future clinical trials
conducted by the Group may be
suspended or abandoned entirely in the
event that regulatory agencies consider
that continuation of these trials could
expose participants to undue risks. Before
obtaining regulatory approval of a product
for a target indication, substantial
evidence must be gathered in controlled
clinical trials that the product candidate is
safe and effective for use for that clinical
setting. Similar approvals must be
obtained from the relevant regulatory
authorities in each country in which the
product may be made available, including
Australia, US and the EU.
Biotechnology programs
are subject to the most
stringent regulatory
oversight by various
government agencies and
ethics committees and
there is no guarantee that
the proposed development
work will result in an
efficacious tr
eatment, or
even if it does, that the drug
will be approved by
regulatory authorities
The CEO and certain Board
members have extensive
experience in developing products
to pre-IND and completing
licencing deals. The Board is in
continuous dialogue with the CEO
regarding ongoing licencing
discussions.
There may be other companies
developing effective treatments for the
same conditions as the Group, which
could make commercialising any drug
more difficult. The r
esearch and
development programs planned are
expected to take several years before any
drug might be ready and the market for
such drugs may contract significantly or
become too competitive for an
economically viable drug launch. In
addition, even post regulatory approval,
any drug may need to be withdrawn from
the market, as well as expose the Group
to claims for compensation as a result of
serious adverse events associated with
the treatment. Historically, very few drugs
make it from discovery to regulatory
approval and commercialisation.
Even where the Group is
successful in terms of
technical and regulatory
approvals, there is no
guarantee it will be
successful in securing an
appropriate licensing deal
or in achieving alternative
means of commercialising
its drugs
Strategic Report
continued
Annual Report & Financial Statements 2023 19
Issue Risk/Uncertainty Mitigation
The CEO has a good understanding
of the details of the licence
agreements and the Group’s
obligations under them. Should any
areas of concern arise, legal
counsel will be sought before
further steps are taken.
The Group’s subsidiary Lyramid Pty Ltd
operates its Midkine antibody research
and development programs under a
worldwide, licence agreement with
Anagenics Ltd, the owner of the Midkine
patents. Similarly, the Group’s subsidiary
Oncogeni Ltd operates its MK Cell and
siRNA programs under worldwide
licencing agreements with Cell Therapy
Limited and Sirna Limited respectively.
Whilst the Group is currently compliant,
there is a risk that the rights to these
patents, as defined b
y the relevant licence
agreement, will be forfeited by virtue of
either party failing to meet licence
conditions.
Existing patents and
licences are subject to the
terms and conditions of the
relevant licence agreement
which could be terminated
for non-compliance with
the terms of such licence
agreement
The Group seeks to protect its
intellectual property through the
filing of patent applications, as well
as robust confidentiality obligations
on its employees.
The Board intends to defend the
Group’s intellectual property
vigorously, where necessary
through litigation and other means.
Filing, prosecuting and defending patents
in all countries throughout the world
would be prohibitively expensive. It is
possible that competitors will use the
technologies in jurisdictions where the
Group has not registered patents.
The Group’s ability to
compete will depend in part,
upon the successful
protection of its intellectual
property, in particular its
patents and know-how
The CEO and Executive Chairman
hold shares in the Company
representing 9% and 4.3%
respectively of the issued capital. In
addition, the Group offers
incentives to Directors and
employees through share warrants,
which makes them linked to the
long-term success of the business.
The loss of the services of certain of these
members of the Group’s key management,
including Ajan Reginald, the CEO, or the
inability to identify, attract and retain a
sufficient number of suitably skilled and
qualified emplo
yees may have a material
adverse effect on the Group. Any future
expansion of the Group may require
considerable management time which
may in turn inhibit management’s ability to
conduct the day to day business of the
Group.
The successful operation of
the Group will depend partly
upon the performance and
expertise of its current and
future management and
employees
The CEO and Chairman have
extensive experience in both the
capital markets and Bio-technology
sector and are confident in their
abilities to raise additional fundings
or revenue.
Pre-revenue companies are dependent
on their ability to raise additional funds or
generate profits in the futur
e to continue
operations.
The further operations of
the Group will depend on its
ability to raise further funds
through either equity
markets or licence revenue
deals
Strategic Report
continued
20 Roquefort Therapeutics plc
Composition of the Board
A full analysis of the Board, its function, composition and policies, is included in the Governance Report.
Capital Structure
The Company’s capital consists of ordinary shares which rank pari passu in all respects which are traded on the
Standard segment of the Main Market of the London Stock Exchange. There are no restrictions on the transfer of
securities in the Company or restrictions on voting rights and none of the Company’s shares are owned or
controlled by employee share schemes. There are no arrangements in place between shareholders that are known
to the Company that may restrict voting rights, restrict the transfer of securities, result in the appointment or
replacement of Directors, amend the Company’s Articles of Association or restrict the powers of the Company’s
Directors, including in relation to the issuing or buying back by the Company of its shares or any significant
agreements to which the Company is a party that take effect after or terminate upon, a change of control of the
Company following a takeover bid or arrangements between the Company and its Directors or employees
providing for compensation for loss of office or emplo
yment (whether through resignation, purported redundancy
or otherwise) that may occur because of a takeover bid.
Approved by the Board on 25 April 2024
Stephen West,
Executive Chairman
Strategic Report
continued
Annual Report & Financial Statements 2023 21
Governance Report
Introduction
The Directors acknowledge the importance of high standards of corporate governance and endeavours, given
the Company’s size and the constitution of the Board, to comply with the principles set out in the QCA Corporate
Governance Code that are relevant to the Group. The QCA Code sets out a standard of minimum best practice for
small and mid-size quoted companies. The Group will adopt where applicable the updated QCA principles for the
year ended 31 December 2024.
Compliance with the QCA Code
Set out below are the Company’s corporate governance practices for the year ended 31 December 2023.
Maintain governance structures and processes that are fit for purpose and support good decision making by the
Board
The Board is responsible for the determination of the investment decisions of the Company and for its overall
supervision via the investment policy and the objectives that it has set out. At the date of this report, the Board
comprises seven Directors, three of whom are Executive Directors and four are Non-Executive Directors, reflecting
a blend of different experiences and backgrounds.
The QCA Code states that a company should have at least two independent non-executive directors. The
Company had four independent non-executive directors active during the year being Dr Michael Stein, Jean Duvall,
DrSimonSinclair and Dr Darrin Disley. At any one time a minimum of four of these were in office.
The Board believes that its composition brings a desirable range of skills and experience in light of the Company’s
challenges and opportunities, while at the same time ensuring that no individual (or a small group of individuals)
can dominate the Board’s decision making. The Company will appraise the structure of the Board on an
ongoingbasis.
All new Directors received an informal induction as soon as practical on joining the Board. No formal induction
process exists for new Directors, given the size of the Company, but the Chairman ensures that each individual is
given a tailored introduction to the Company and fully understands the requirements of the role.
A Director has a duty to avoid a situation in which he or she has, or can have, a direct or indirect interest that
conflicts, or possibly may conflict with the interests of the Company. The Board had satisfied itself that ther
e is
no compromise to the independence of those Directors who have appointments on the Boards of, or relationships
with, companies outside the Company. The Board requires Directors to declare all appointments and other
situations which could result in a possible conflict of interest.
The Board intends to meet formally at least six times each year to review, formulate and approve the Group’s
strategy, budgets, and corporate actions and oversee the Group’s progress towards its goals, and to ensure the
Directors maintain overall control and supervision of the Company’s affairs.
Attendance at meetings in the year:
Member Position Meetings attended
Stephen West Executive Chairman 6 of 6
Ajan Reginald Chief Executive Officer 6 of 6
Sir Martin Evans Chief Scientific Officer 6 of 6
Dr Michael Stein Non-Executive Director 4 of 6
Ms Jean Duvall Non-Executive Director 6 of 6
Dr Simon Sinclair Non-Executive Director 6 of 6
Dr Darrin Disley Non-Executive Director 6 of 6
The Board is pleased with the high level of attendance and participation of Directors at Board meetings.
At each Board meeting the Executive Chairman, Stephen West, proposes and seeks agreement to the Board
Agenda and ensures adequate time for discussion.
22 Roquefort Therapeutics plc
Governance Report
continued
The Board maintains regular contact with all its service providers and are kept fully informed of investment and
financial contr
ols and any other matters that should be brought to the attention of the Directors. The Directors
also have access where necessary to independent professional advice at the expense of the Company.
Audit Committee
The Company has established an Audit Committee with delegated duties and responsibilities.
The Audit Committee has the primary responsibility of monitoring the quality of internal controls to ensure that
the financial per
formance of the Group is properly measured and reported on. It receives and reviews reports
from the Group’s management and external auditors relating to the interim and annual accounts and the
accounting and internal control systems in use throughout the Group. The Audit Committee meets not less than
three times in each financial y
ear and has unrestricted access to the Group’s external auditors. During the year
the Audit Committee comprised Jean Duvall (as chair) and Dr Michael Stein; however, on 23 January 2024 Dr
Michael Stein resigned and Dr Simon Sinclair was appointed to the Audit Committee. Accordingly, as at the date
of this report, the Audit Committee comprises Jean Duvall (as chair) and Dr Simon Sinclair. All members of the
Audit Committee are non-executive directors.
The Audit Committee meets with the auditors at least twice a year and more frequently if required.
Terms of reference of the Audit Committee will be made available upon written request.
The Audit Committee report is included on pages 31 to 32.
Remuneration Committee
The Company has established a Remuneration Committee to assist the Board in determining its responsibilities
in relation to remuneration, including making recommendations to the Board on the policy on remuneration.
The Remuneration Committee reviews the performance of executive directors, chairman of the Board and senior
management of the Group and makes recommendations to the Board on matters relating to their remuneration
and terms of service. The Remuneration Committee also makes recommendations to the Board on proposals for
the granting of share options and other equity incentives pursuant to any employee share option scheme or equity
incentive plans in operation from time to time. The Remuneration Committee meets as and when necessary, but
at least twice each year. In exercising this role, the Directors shall have regard to the recommendations put forward
in the QCA Code and, where appropriate, the QCA Remuneration Committee Guide and associated guidance. The
members of the Remuneration Committee include two Non-Executive Directors.
The Remuneration Committee comprised Dr Darrin Disley (as chair) and Jean Duvall.
Formal terms of reference for the Remuneration Committee will be made available upon written request.
The Remuneration Committee report is included on pages 25 to 30.
Nomination Committee
The Company has established a Nomination Committee. The Nomination Committee leads the process for board
appointments and makes recommendations to the Board. The Nomination Committee evaluates the balance of
skills, experience, independence and knowledge on the Board and, in the light of this evaluation, prepare a
description of the role and capabilities required for a particular appointment. The Nomination Committee meets
as and when necessary, but at least twice each year. During the year the Nomination Committee comprised
DrMichael Stein (as chair) and Dr Simon Sinclair; however, on 21 March 2024 Dr Michael Stein resigned and
DrDarrin Disley was appointed as Chair to the Nomination Committee. Accordingly, as at the date of this report,
the Nomination Committee comprises Dr Darrin Disley (as chair) and Dr Simon Sinclair.
Terms of reference for the Nomination Committee will be made available upon written request.
The Nomination Committee report is included on page 33.
Annual Report & Financial Statements 2023 23
Governance Report
continued
Market Abuse Regulations
The Company has adopted a share dealing policy, in conformity with the requirements of the Listing Rules and
the Market Abuse Regulation, regulating trading and confidentiality of inside information for persons discharging
managerial responsibility (“PDMRs”) and persons closely associated with them which contains provisions
appropriate for a company whose shares are admitted to trading on the Official List. The Company takes all
reasonable steps to ensure compliance by PDMRs and any relevant employees with the terms of its share
dealingpolicy.
Evaluate board performance based on clear and relevant objectives, seeking
continuous improvement
All Board appointments have been made after consultation and detailed due diligence is carried out on all new
potential board candidates. The Board will consider using external advisers to review and evaluate the
effectiveness of the Board and Directors in future to supplement its own internal evaluation processes.
All Directors have disclosed any significant commitments to the Board and confirmed that they have sufficient
time to discharge their duties.
The Group’s Articles require that all Directors are submitted for election at the AGM following their first
appointment to the Board, and Directors for whom it is their third annual general meeting during their appointment,
are subject to retirement by rotation on an annual basis to refresh the Board, irrespective of performance.
The terms and conditions of appointment of Non-Executive Directors will be made available upon written request.
Seek to understand and meet shareholder needs and expectations
The Company is committed to engaging and communicating openly with its shareholders to ensure that its
strategy, business model and performance are clearly understood. All Board members have responsibility for
shareholder liaison, but queries are primarily delegated to the Company’s advisors in the first instance or the
Company’s Executive Chairman. Details of the Company’s advisors can be found on the Company’s website.
Copies of the annual and interim reports will be made available to all shareholders and copies may be downloaded
from the Company’s website.
Other Company information for shareholders is also available on the website.
The Company also engages with shareholders at its AGM each year which gives investors the opportunity to
enter into dialogue with the Board and for the Board to receive feedback and take action if and when necessary.
The results of the AGM are subsequently announced via RNS and published on the Company’s website.
Establish a strategy and business model which promote long-term value for
shareholders
The Company is developing pre-clinical next generation medicines focused on hard-to-treat cancers, with the
aim of generating optimal returns for our shareholders.
The investment strategy is to provide shareholders with an attractive total return achieved primarily through
capital appreciation.
24 Roquefort Therapeutics plc
Governance Report
continued
Take into account wider stakeholder and social responsibilities and their
implications for long-term success
The Board is aware that engaging with Roquefort Therapeutics’ stakeholders strengthens relationships, assists
the Board in making better business decisions and ultimately promotes the long-term success of Roquefort
Therapeutics plc. The Group’s stakeholders include shareholders, and other service providers, suppliers, auditors,
lenders, regulators, industry bodies and the surrounding communities of where its future investments will be
located. The Board as a whole are responsible for reviewing and monitoring the parties contracted to the Company,
including their service terms and conditions.
The Board is regularly updated on wider stakeholder views and issues concerning the portfolio both formally at
Board meetings and informally through ad hoc updates.
This Governance Report was approved by the Board and signed on its behalf by:
Stephen West
Executive Chairman
25 April 2024
Annual Report & Financial Statements 2023 25
Remuneration Committee Report
The Remuneration Committee presents its report for the year ended 31 December 2023.
Membership of the Remuneration Committee
During the year the Remuneration Committee consisted of Dr Darrin Disley as Chair and Jean Duvall.
During the year ended 31 December 2023, no formal meetings of the Remuneration Committee were held.
Subject to what appears below, no other third parties have provided advice that materially assisted the
Remuneration Committee during the year.
The items included in this report are unaudited unless otherwise stated.
Remuneration Committee’s main responsibilities
l The Remuneration Committee considers the remuneration policy, employment terms and remuneration of
the Board and advisors;
l The Remuneration Committee’s role is advisory in nature, and it makes recommendations to the Board on
the overall remuneration packages;
l The Remuneration Committee, when considering the remuneration packages of the Company’s Board, will
review the policies of comparable companies in the industry.
Report Approval
Resolution to approve this report will be proposed at the Annual General Meeting (“AGM”) of the Company. The
votes will have advisory status, will be in respect of the remuneration policy and overall remuneration packages
and will not be specific to individual le
vels of remuneration.
At the Company’s 2023 AGM resolutions to approve the directors’ remuneration report and remuneration policy
were passed with 100% votes in favour of the resolutions. At the 2023 AGM, the Company did not receive any
views from shareholders regarding directors’ remuneration.
Remuneration policy
There was no external remuneration advice received by the Company during the years ended 31 December 2023
and 31 December 2022.
The remuneration policy of the Company is that each Director is entitled to a salary per annum from the date of
their appointment. The Executive Directors have entered into Service Agreements with the Company and continue
to be employed until terminated by the Company.
Non-Executive Directors fees are £24,000 each per annum and are unchanged from last year.
Stephen West, as Executive Chairman, entered into a service agreement (the “Service Agreement”) with the
Company dated 26 February 2022 under which Mr West is employed until terminated by either party giving
6months’ prior written notice. Mr West received an annual salary of £120,000 until 15 September 2022 (pursuant
to the terms of a side letter dated 7 March 2022 amending the Service Agreement). On the successful acquisition
of Oncogeni Ltd on 16 September 2022, Mr West’s salary was increased to £139,000 (pursuant to a side letter
dated 29 November 2022 amending the Service Agreement) and he became entitled to pension contributions of
10% of salary into a nominated scheme from that date. Mr West is not entitled to any other benefits other than
the reimbursement of his reasonable expenses. The Service Agreement is governed by English law.
Ajan Reginald, as Chief Executive Officer
, entered into a service agreement with the Company dated 9 September
2022 (the “AR Service Agreement”). The AR Service Agreement was conditional on completion of the acquisition
of Oncogeni Ltd and will remain in force until terminated by either party giving not less than twelve months’ written
notice. Mr Reginald receives an annual salary of £278,000 plus any discretionary bonus which the Company may
choose to award in its sole and absolute discretion. Mr Reginald is entitled to pension contributions of 10% of his
salary into a nominated scheme. Mr Reginald is not entitled to any other benefits other than the r
eimbursement
26 Roquefort Therapeutics plc
Remuneration Committee Report
continued
of his reasonable expenses. For a period of twelve months following termination of employment, Mr Reginald is
subject to certain restrictive covenants preventing him from competing against the Group, amongst other matters.
The AR Service Agreement is governed by English law.
Sir Martin Evans, as Chief Scientific Officer
, entered into a service agreement with the Company dated
9September2022 (the “ME Service Agreement”). The ME Service Agreement was conditional on completion of
the acquisition of Oncogeni Ltd and will remain in force until terminated by either party giving not less than three
months’ notice. Sir Evans receives an annual salary of £100,000 for two days of work per week, plus any
discretionary bonus which the Company may choose to award in its sole and absolute discretion. Sir Evans is
not entitled to any other benefits other than the r
eimbursement of his reasonable expenses. For a period of twelve
months following termination of employment, Sir Evans is subject to certain restrictive covenants preventing him
from competing against the Group, amongst other matters. The ME Service Agreement is governed by Englishlaw.
There have been no changes to the remuneration of the executive directors in the year ended 31 December 2023.
The Company’s Remuneration Committee oversees decisions regarding the remuneration of the Board. The Board
believes that shares and warrants owned by Directors strengthens the link between their personal interests and
those of shareholders and is in line with the share dealing code adopted by the Company. Apart from the
Company’s share dealing code, there are no specific r
equirements or guidelines determined by the Remuneration
Committee for Directors to own shares in the Company.
Should the Company award share-based remuneration in the future, appropriate vesting and holding periods will
be determined by the Remuneration Committee.
Non-Executive Directors
The Company policy is that the Non-Executive Directors are expected to attend scheduled board meetings and
attend committee meetings as required.
Terms of appointment
The services of the Non-Executive Directors during the year ended 31 December 2023 were provided in
accordance with their appointment letters. Non-Executive Directors were expected to devote such time as was
necessary for the proper performance of their duties, but as a minimum they were expected to commit at least
one day permonth, which should include attendance at all meetings of the Board and any sub-committees of
the Board.
Year of
Director appointment
Stephen West 2020
Ajan Reginald 2022
Sir Martin Evans 2022
Dr Michael Stein 2021
Ms Jean Duvall 2022
Dr Simon Sinclair 2022
Dr Darrin Disley 2022
Annual Report & Financial Statements 2023 27
Remuneration Committee Report
continued
Directors’ emoluments and compensation (audited)
Set out below are the emoluments of the Directors who served in the year ended 31 December 2023 (GBP):
Annual
Bonus
and Long
Salary and Taxable Term Pension Share Based
Name of Director Fees Benefits Benefits Related Payment Total
Stephen West 139,000 – – 13,900 – 152,900
Ajan Reginald 278,000 – – 27,800 – 305,800
Sir Martin Evans 100,000 – – – – 100,000
Dr Michael Stein 24,000 – – – – 24,000
Ms Jean Duvall 24,000 – – – 2,808 26,808
Dr Simon Sinclair 24,000 – – – 2,808 26,808
Dr Darrin Disley 24,000 – – – – 24,000
Total 613,000 – – 41,700 5,616 660,316
Set out below are the emoluments of the Directors who served in the year ended 31 December 2022 (GBP):
Annual
Bonus
and Long
Salary and Taxable Term Pension Share Based
Name of Director Fees Benefits Benefits Related Payment Total
Stephen West 114,251 – – 4,054 – 118,305
Ajan Reginald 81,269 – – 8,108 – 89,377
Sir Martin Evans 29,807 – – – – 29,807
Dr Michael Stein 24,354 – – – – 24,354
Ms Jean Duvall 17,753 – – – 2,808 20,561
Dr Simon Sinclair 16,738 – – – 2,808 19,546
Dr Darrin Disley 7,015 – – – – 7,015
Mark Rollins – – – – – –
Mark Freeman
1
17,505 – – – 17,505
Total 308,692 – – 12,162 5,616 326,470
1
Mark Freeman resigned as director on 16th September 2022
Directors warrants (audited)
Details of warrants in the Company held by Directors who served during the year are set out below:
Vested but
Exercised unexercised
As at 1 Granted or lapsed As at 31 at 31 Final
Name of January during during December December Exercise Date of Vesting
Director 2023 the year the year 2023 2023 price grant date
Stephen 3,000,000 – – 3,000,000 3,000,000 £0.10 25/11/2020 21/12/2021
West*
500,000 – (500,000) – – £0.10 22/03/2021 22/03/2021
3,000,000 – – 3,000,000 3,000,000 £0.10 13/10/2021 13/10/2021
1,000,000 – – 1,000,000 694,420 £0.15 13/10/2021 21/12/2024
7,500,000 – (500,000) 7,000,000 6,694,420
Ms Jean 300,000 – – 300,000 150,000 £0.15 22/06/2022 28/04/2024
Duval
300,000 – – 300,000 150,000
Dr Simon 300,000 – – 300,000 150,000 £0.15 22/06/2022 28/04/2024
Sinclair 300,000 – – 300,000 150,000
Dr Michael 750,000 – – 750,000 750,000 £0.05 22/03/2021 21/12/2021
Stein
750,000 – – 750,000 750,000 £0.10 22/03/2021 21/12/2021
500,000 – – 500,000 166,667 £0.15 13/10/2021 21/12/2024
2,000,000 – – 2,000,000 1,666,667
*held by Cresthaven Investments Pty Ltd ATF The Bellini Trust – an entity associated with S West
28 Roquefort Therapeutics plc
Details of warrants in the Company held by Directors who served during the year ended 31 December 2022 are
set out below:
Vested but
Exercised unexercised
As at 1 Granted or lapsed As at 31 at 31 Final
Name of January during during December December Exercise Date of Vesting
Director 2022 the year the year 2022 2022 price grant date
Stephen 3,000,000 – – 3,000,000 3,000,000 £0.10 25/11/2020 21/12/2021
West*
500,000 – – 500,000 500,000 £0.10 22/03/2021 22/03/2021
3,000,000 – – 3,000,000 3,000,000 £0.10 13/10/2021 13/10/2021
1,000,000 – – 1,000,000 333,333 £0.15 13/10/2021 21/12/2024
7,500,000 – – 7,500,000 6,833,333
Ms Jean – 300,000 – 300,000 – £0.15 22/06/2022 28/04/2024
Duval – 300,000 – 300,000 –
Dr Simon – 300,000 – 300,000 – £0.15 22/06/2022 28/04/2024
Sinclair – 300,000 – 300,000 –
Mark 3,000,000 – – 3,000,000 3,000,000 £0.10 25/11/2020 21/12/2021
Rollins
500,000 – – 500,000 500,000 £0.10 22/03/2021 22/03/2021
250,000 – – 250,000 83,333 £0.15 13/10/2021 21/12/2024
3,750,000 – – 3,750,000 3,583,333
Dr Michael 750,000 – – 750,000 750,000 £0.05 22/03/2021 21/12/2021
Stein
750,000 – – 750,000 750,000 £0.10 22/03/2021 21/12/2021
500,000 – – 500,000 166,667 £0.15 13/10/2021 21/12/2024
2,000,000 – – 2,000,000 1,666,667
Mark 500,000 – – 500,000 166,667 £0.15 13/10/2021 21/12/2024
Freeman 500,000 – – 500,000 166,667
*held by Cresthaven Investments Pty Ltd ATF The Bellini Trust – an entity associated with S West
Pension contributions (audited)
The Company does not currently have any pension plans for any of the Directors. It pays any pension amounts
due in relation to their remuneration into funds nominated by them.
The Company has not paid out any excess retirement benefits to any Dir
ectors or past Directors.
Payments to past directors (audited)
The Company has not paid any compensation to past Directors.
Payments for loss of office (audited)
No payments were made for loss of office during the year.
The Committee will honour contractual entitlements. Service contracts do not contain liquidated damages
clauses. If a contract is to be terminated, the Committee will determine such mitigation as it considers fair and
reasonable in each case. There is no agreement between the Company and its Executive Directors or employees,
providing for compensation for loss of office or emplo
yment that occurs because of a takeover bid.
The Committee reserves the right to make additional payments where such payments are made in good faith in
discharge of an existing legal obligation (or by way of damages for breach of such an obligation); or by way of
settlement or compromise of any claim arising in connection with the termination of an Executive Director’s office
or employment.
Remuneration Committee Report
continued
Annual Report & Financial Statements 2023 29
UK Remuneration percentage changes
The Executive Chairman, Stephen West was awarded total salary (including pension contributions) of £152,900
in the year ended 31 December 2023 (2022: £118,305) representing an increase of 29% during the year.
Mr West had no changes to his remuneration in the year ended 31 December 2023.
The Chief Executive Officer
, Ajan Reginald and the Chief Scientific Officer, Sir Martin Evans, were appointed in
September 2022. In the year ended 31 December 2023 Mr Reginald was paid a salary (including pension
contributions) of £305,800 (2022: £89,377) representing an increase of 14% during the year on a pro-rata basis,
and Sir Martin Evans was paid £100,000 (2022: £29,807) representing an increase of 12% during the year on a
pro-rata basis.
All Non-Executive Directors were paid £24,000 per annum. There has been no change in 2023.
UK 10-year performance graph
The Directors have considered the requirement for a UK 10-year performance graph comparing the Company’s
Total Shareholder Return with that of a comparable indicator. The Directors do not currently consider that including
the graph will be meaningful because the Company only listed in 2021, is not paying dividends and is currently
incurring losses as it gains scale. In addition, and as mentioned above, the remuneration of Directors was not
linked to performance and we therefore do not consider the inclusion of this graph to be useful to shareholders
at the current time. The Directors will review the inclusion of this graph for future reports.
UK 10-year CEO table and UK percentage change table
The Company has employed a CEO from 16 September 2022 therefore the Directors do not currently consider
that including such a table would be meaningful. The Directors will review the inclusion of this table for future
reports. The CEO’s remuneration was agreed with reference to the advice of a third-party recruitment company.
They provided evidence of salaries in similar organisations, giving a benchmark for the salary of the new CEO.
Relative importance of spend on pay
The table below illustrates the year-on-year change in total remuneration compared to distributions to
shareholders and operational cash flow for the financial periods ended 31 December 2023 and 2022:
Total directors
Distributions to and employee Operational
shareholders pay cash outflow
£ £ £
Year ended 31 December 2023 – 1,087,947 1,733,533
Year ended 31 December 2022 – 573,538 1,577,476
Total employee pay includes wages and salaries, social security costs and pension costs for employees in
continuing operations. Further details on Employee remuneration are provided in note 6. Operational cash outflow
has been shown in the table above as cash flow monitoring and forecasting is an important consideration for the
Remuneration Committee and Board of Directors when determining cash-based remuneration for directors and
employees.
UK Directors’ shares (audited)
The interests of the Directors who served during the year in the share capital of the Company at 31 December2023
and at the date of this report has been set out in the Directors’ Report on pages 9 to 12.
Remuneration Committee Report
continued
30 Roquefort Therapeutics plc
Other matters
The Company does not currently have any other annual or long-term incentive schemes in place for any of the
Directors and as such there are no disclosures in this respect.
Approved on behalf of the Board of Directors by:
Dr Darrin Disley
Chair of the Remuneration Committee
25 April 2024
Remuneration Committee Report
continued
Annual Report & Financial Statements 2023 31
Audit Committee Report
During the year the Audit Committee comprised of two Non-Executive Directors, Jean Duvall as chair of the Audit
Committee and Dr Michael Stein as a member of the Committee. On 23 January 2024 Dr Michael Stein resigned
and Dr Simon Sinclair was appointed to the Audit Committee. Accordingly, as at the date of this report, the Audit
Committee comprises Jean Duvall (as chair) and Dr Simon Sinclair.
The Audit Committee oversees the Company’s financial r
eporting and internal controls and provides a formal
reporting link with the external auditors. The ultimate responsibility for reviewing and approving the annual report
and financial statements and the half-y
early report remains with the Board.
Main Responsibilities
The Audit Committee acts as a preparatory body for discharging the Board’s responsibilities in a wide range of
financial matters b
y:
l monitoring the integrity of the financial statements and formal announcements relating to the Company’s
financial performance;
l reviewing significant financial reporting issues, accounting policies and disclosures in financial reports,
which are considered to be in accordance with the key audit matters identified by the external auditors;
l overseeing that an effective system of internal control and risk management systems are maintained;
l ensuring that an effective whistle-blowing, anti-fraud and bribery procedures are in place;
l overseeing the Board’s relationship with the external auditor and, where appropriate, the selection of new
external auditors;
l monitoring the statutory audit of the annual financial statements, in particular, its performance, taking into
account any findings and conclusions by the competent authority;
l approving non-audit services provided by the external auditor, or any other accounting firm, ensuring the
independence and objectivity of the external auditors is safeguarded when appointing them to conduct
non-audit services; and
l ensuring compliance with legal requirements, accounting standards and the Listing Rules and the Disclosure
and Transparency Rules.
Governance
Good practice suggests that at least one member of the Audit Committee has recent and relevant financial
experience. The Audit Committee’s current chair, Jean Duvall, has significant business and commer
cial experience,
including with public companies. The Board is satisfied that the A
udit Committee has recent and relevant financial
experience.
Members of the Audit Committee are appointed by the Board and whilst warrant holders, the Company believes
they are considered to be independent in both character and judgement.
The Company’s external auditor is RPG Crouch Chapman LLP (2022: BDO LLP) and the Audit Committee will closely
monitor the level of audit and non-audit services they provide to the Company.
32 Roquefort Therapeutics plc
Audit Committee Report
continued
Meetings
For the year to 31 December 2023 the Board has met with the auditors on two occasions.
The key work undertaken by the Audit Committee is as follows:
l interview of external auditors and recommendation to the Board
l review of audit planning and update on relevant accounting developments;
l consideration and approval of the risk management framework, appropriateness of key performance
indicators;
l consideration and review of full-year results;
l review of the effectiveness of the Audit Committee;
l review of internal controls; and
l considered whether an internal audit function is required and confirmed it is not considered necessary given
the present size of the Company.
The Audit Committee has primary responsibility for making a recommendation on the appointment, reappointment
or removal of the external auditor.
External auditor
The Company’s external auditor is RPG Crouch Chapman LLP. The external auditor has unrestricted access to
the Audit Committee chair. The Committee is satisfied that RPG Cr
ouch Chapman LLP has adequate policies and
safeguards in place to ensure that auditor objectivity and independence are maintained.
The external auditors report to the Audit Committee annually on their independence from the Company. In
accordance with professional standards, the partner responsible for the audit is changed every fiv
e years. The
current auditor, RPG Crouch Chapman LLP was first appointed b
y the Company in 2023, and therefore the current
partner is due to rotate off the engagement after completing the audit for the year ended 31 December 2028.
Having assessed the performance objectivity and independence of the auditors, the Committee will be
recommending the reappointment of RPG Crouch Chapman LLP as auditors to the Group at the 2024 Annual
General Meeting.
Approved on behalf of the Board of Directors by:
Ms Jean Duvall
Chair of the Audit Committee
25 April 2024
Jean M Duvall
Verified by pdfFiller
04/25/2024
Annual Report & Financial Statements 2023 33
Nomination Committee Report
During the year the Nomination Committee comprised of two Non-Executive Directors Dr Michael Stein (as chair)
and Dr Simon Sinclair. On 21 March 2024 Dr Michael Stein resigned and Dr Darrin Disley was appointed as Chair
to the Nomination Committee. Accordingly, as at the date of this report, the Nomination Committee comprises
Dr Darrin Disley (as chair) and Dr Simon Sinclair.
Nomination committee evaluation
The Nomination Committee evaluates the composition, skills, and diversity of the Board and its committees and
identifies a r
equirement for a Board appointment.
Identify suitable candidates
The Nomination Committee undertakes a review of each candidate and their experience in accordance with the
Company’s ‘director’s profile
’ and suitable candidates are identified.
For the appointment of a Chairman, the Nomination Committee will prepare a job specification, including an
assessment of the time commitment expected, recognising the need for availability in the event of crises.
Nomination committee recommendation
In the current year there have been no new appointments to the board.
Due diligence
After a candidate has been recommended to the Board by the Nomination Committee, the company secretary
undertakes appropriate background checks on a candidate. The Board of directors meets any candidate
recommended by the Nomination Committee and the candidate is given an opportunity to make a presentation
to the Board prior to deciding on their appointment.
Board appointment
The Board formally approves a candidate’s appointment to the Board.
Approach to Diversity
The Nomination Committee believes in the benefits of diversity, including the need for diversity in order to
effectively represent shareholders’ interests. This diversity is not restricted to gender but also includes geographic
location, nationality, skills, age, educational and professional background. The Board’s policy remains that selection
should be based on the best person for the role.
On behalf of the Nomination Committee
Dr Darrin Disley
Chair of the Nomination Committee
25 April 2024
34 Roquefort Therapeutics plc
Independent Auditors’ Report to the Members of
Roquefort Therapeutics plc
Opinion
We have audited the financial statements of Roquefort Therapeutics PLC (the ‘Company’) and its subsidiaries
(the ‘Group’) for the year ended 31 December 2023 which comprise the Consolidated Statement of Comprehensive
Income, the Consolidated Statement of Financial Position, the Statement of Financial Position, the Consolidated
Statement of Changes in Equity, the Statement of Changes in Equity, the Consolidated Statement of Cash Flows,
the Statement of Cash Flows and notes to the financial statements, including a summar
y of significant accounting
policies. The financial r
eporting framework that has been applied in their preparation is applicable law and UK
adopted international accounting standards (‘IFRS’).
In our opinion the financial statements:
l give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December
2023 and of the Group’s loss for the year then ended;
l have been properly prepared in accordance with UK adopted international accounting standards; and
l 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 r
eport. We are independent of the group in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’
s Ethical
Standard as applied to listed entities, and we have fulfilled our other ethical r
esponsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appr
opriate to provide
a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 3(b) in the accounting policies, concerning the Group’s ability to continue as a going
concern. The matters explained in Note 3(b) indicate that the Group needs to raise further finance to fund its
working capital needs and development plans. As at the date of approval of these financial statements ther
e are
no legally binding agreements relating to securing the required funds. These events or conditions along with the
matters set forth in Note 3 (b) indicate the existence of a material uncertainty which may cast significant doubt
over the Group’s ability to continue as a going concern. Our opinion is not modified in r
espect of this matter.
We have highlighted going concern as a key audit matter. In auditing the financial statements, we ha
ve concluded
that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is
appropriate. Our evaluation of the Directors’ assessment of the Group and the Parent Company’s ability to
continue to adopt the going concern basis of accounting included:
l Analysing Management’s and the Directors’ cashflow forecast which forms the basis of their assessment
that the going concern basis of preparation remains appropriate for the preparation of the Group and
Company financial statements for a period of at least twelve months from the date of approval of these
financial statements;
l Testing the integrity of the cashflow model;
l Assessing costs included within the cashflow forecast and where available agreeing these costs to other
evidence obtained during the course of our audit work is in line with our expectations;
Annual Report & Financial Statements 2023 35
l Obtaining details of post year end fundraisings and agreeing supporting documentation and cash received;
l Discussing with Management and the Board the Group’s strategy to continue to ensure funds are available
to the Group to fund its plans;
l Sensitising the cash flows for changes in key assumptions and considering the impact on headroom; and
l Reviewing and considering the adequacy of the disclosure within the financial statements relating to the
Directors’ assessment of the going concern basis of preparation.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Our approach to the audit
In planning our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made subjective judgements, for example in respect
of significant accounting estimates. As in all of our audits, we also addr
essed the risk of management override
of internal controls, including evaluating whether there was evidence of bias by the directors that represented a
risk of material misstatement due to fraud.
We tailored the scope of our audit to ensure that we performed sufficient work to be able to issue an opinion on
the financial statements as a whole, taking into account the structur
e of the group and the parent company, the
accounting processes and controls, and the industry in which they operate.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial statements of the curr
ent period and include the most significant assessed risks of material
misstatement we identified (whether or not due to fraud), including those which had the gr
eatest effect on: the
overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters. The use of the Going Concern
basis of accounting was assessed as a key audit matter and has already been covered in an earlier section of
this report. The other key audit matters identified ar
e listed below.
Independent Auditors’ Report to the Members of
Roquefort Therapeutics plc
continued
Key audit matter How our work addressed this matter
Revenue Recognition
Revenue recognition is a presumed risk of fraud under
International Auditing Standards.
During the year, the Group has recognised £200k of
licence income.
As this is the first y
ear in which the Group has reported
licensing revenue, this was determined to be a key audit
matter.
Our audit work included:
l Obtaining a copy of the licensing agreement and
reviewing it for key terms and conditions of the
arrangement.
l Ensuring revenue recognition is in compliance with
IFRS 15: Revenue.
l Reviewing accounting policies and disclosures
within the financial statements and ensuring these
are in compliance with IFRS.
36 Roquefort Therapeutics plc
Independent Auditors’ Report to the Members of
Roquefort Therapeutics plc
continued
Key audit matter How our work addressed this matter
Carrying Value of Intangible Assets
In previous years the Group has acquired 2 subsidiary
companies, Oncogeni Ltd and Lyramid Pty Ltd. The
group currently has intangible assets consisting of
£282k of goodwill and £5.1m of acquired R&D on its
consolidated balance sheet as a direct result of these
acquisitions.
The Group are currently expensing all R&D costs to the
Profit and Loss account and no amortisation of these
balances have begun as management have determined
that these projects are still in the research phase and
that their future viability has yet to be established.
Given the subjective nature of valuing intangible assets
and significant assumptions required the carrying value
of investments was deemed to be a key audit matter.
Carrying Value of Investments
The Company currently has investments of £4.9m on
its Statement of Financial Position relating to 100%
shareholdings in subsidiary companies Lyramid Pty Ltd
and Oncogeni Ltd.
Given the subjective nature of valuing investments and
significant assumptions required the carrying value of
investments was deemed to be a key audit matter.
Our audit work included:
l Reviewing brought forward calculations to agree
the opening balance position in the financial
statements and previous accounting treatment in
relation to these transactions.
l Agreeing the allocation of consideration across
intangibles back to the supporting evidence at the
date of acquisition.
l Reviewing management’s assessment of
impairment in relation to the intangible assets.
l Discussing with management the assumptions
used in the impairment models and obtaining
details to support these key assumptions, including
challenging of management in relation to these
assumptions.
l Obtaining an understanding of the current status
of each research and development project to
corroborate treatment to IAS38 requirements.
Our audit work included:
l Reviewing brought forward calculations to agree
the opening balance position.
l Obtaining and reviewing management’s
assessment of impairment.
l Discussing with management key assumptions
and judgements made in the preparation of the
impairment models, agreeing these to supporting
evidence and challenging theses where
appropriate.
l Reviewing post year end financial statements and
comparing actual performance to managements
assessments.
l Reviewing post year end non financial events for
evidence of any subsequent impairment indicators
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which misstatements, including omissions,
could influence the economic decisions of reasonable users that are taken on the basis of the financial
statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we
use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly,
misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of
the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating
their effect on the financial statements as a whole.
Annual Report & Financial Statements 2023 37
Independent Auditors’ Report to the Members of
Roquefort Therapeutics plc
continued
We consider loss before tax to be the most significant determinant of the Group’s financial performance used
by the users of the financial statements. This is due to the gr
oup continuing to have expensed its R&D costs
during the year but also having recorded its first r
evenue. We have based materiality for the Group and Parent
Company on 5% of loss before tax. Overall materiality for the Group was therefore set at £97k and for the Parent
Company at £77k. Performance materiality was set at a threshold between 50% and 75% of materiality
depending on the determined audit risk of the financial statement ar
ea in question. Significant audit risk areas
(revenue, intangibles, investments and management override) were audited to a 50% performance materiality
threshold with remaining areas subject to a 75% performance materiality threshold. Treatment was the same
for the Group and Parent Company.
For the purpose of our Group audit opinion, we set materiality for the significant component of the gr
oup at 50%
of group materiality. Component materiality was therefore £48,500. Performance materiality was set at the same
50-75% of materiality threshold as identified abo
ve.
We agreed with the Audit Committee that we would report on all differences in excess of 5% of materiality relating
to the Group financial statements. W
e also report to the Audit Committee on financial statement disclosure
matters identified when assessing the o
verall consistency and presentation of the consolidated financial
statements.
Other information
The other information comprises the information included in the annual report, 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 co
ver the other information and,
except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion
thereon. In connection with our audit of the financial statements, our r
esponsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify
such material inconsistencies or apparent material misstatements, we are required to determine whether there
is a material misstatement in the financial statements or a material misstatement of the other information. If,
based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
l 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
l the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal
requirements.
l The part of the Director’s Remuneration Report to be audited has been properly prepared in accordance
with the Companies Act 2006.
38 Roquefort Therapeutics plc
Independent Auditors’ Report to the Members of
Roquefort Therapeutics plc
continued
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Company and its environment obtained in
the course of the audit, we have not identified material misstatements in the Strategic Repor
t, the Directors’
Report or the Director’s Remuneration 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:
l adequate accounting records have not been kept by the Group or the Company, or returns adequate for
our audit have not been received from branches not visited by us; or
l the Group or the Company financial statements are not in agreement with the accounting records and
returns; or
l certain disclosures of directors’ remuneration specified by law are not made; or
l 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 12 to 13 the directors are
responsible for the preparation of the financial statements and for being satisfied that the
y 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 dir
ectors are responsible for assessing the group’s and the parent
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 group or the
parent company or to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group's financial r
eporting process.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report.
Reasonable assurance is a high level of assurance, but does not 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 aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of the 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:
l Enquiries of management, including obtaining and reviewing supporting documentation concerning the
Group’s policies and procedures relating to;
o Identifying, evaluating and complying with laws and regulations and whether they were aware of any
instances of non-compliance
o Detecting to and responding to the risks of fraud and whether they have knowledge of any actual,
suspected or alleged fraud
l Discussions amongst the engagement team regarding how and where fraud might occur in the financial
statements and any potential indicators of fraud.
Annual Report & Financial Statements 2023 39
Independent Auditors’ Report to the Members of
Roquefort Therapeutics plc
continued
We also obtained an understanding of the legal and regulatory framework that the Group and Company operates
in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material
amounts and disclosures included within the financial statements. The k
ey laws and regulations we considered
in this context included the UK Companies Act and IFRS.
In addition we considered provisions of other laws and regulations that do not have a direct effect on the financial
statements but compliance with which may be fundamental to the Group and Company’s ability to operate or to
avoid a material penalty. These included health and safety regulations, employment law, data protection
regulations and general trading laws in the UK and Australia.
As a result of these procedures we consider the particular areas that were susceptible to misstatement due to
fraud were in respect of revenue recognition, management override of controls, investment valuations and
intangible valuations.
Our procedures to respond to these risks identified included the following;
l Reviewing the financial statement disclosures and testing these to supporting documentation to asses
compliance with provisions of relevant laws and regulations described as having a direct effect on the
financial statements
l Enquiring with management concerning actual and potential litigation claims
l Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks
of material misstatement due to fraud
l Agreeing investment and intangible valuations to supporting documentation and recalculating.
l Reviewing management impairment assessments and challenging assumptions made to ensure valuations
of intangibles and investments are reasonable
l Reviewing board minutes and legal and professional fees during the year and any subsequent to the year
end to identify any potential litigation not previously disclosed
l In addressing the risk of fraud through management override of controls, testing the appropriateness of
journal entries and other adjustments for evidence of management override/bias and agreeing these to
supporting documentation.
l Assessing whether the judgements made in making accounting estimates are indicative of a potential bias
and evaluating the rationale of any significant transactions that are deemed unusual or outside of the normal
course of the Group and Company’s operations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including
those leading to a material misstatement in the financial statements or non-compliance with r
egulation. This risk
increases the more that compliance with a law or regulation is removed from the events and transactions reflected
in the financial statements, as we will be less lik
ely to become aware of instances of non-compliance. The risk is
also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional
concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
Auditor's Report.
40 Roquefor
t Therapeutics plc
Independent Auditors’ Report to the Members of
Roquefort Therapeutics plc
continued
Other matters that we are required to address
We were appointed on 24 November 2023 and this is the first year of our engagement as auditors for the Group.
We confirm that we ar
e independent of the Group and Parent Company and have not provided any prohibited
non-audit services, as defined b
y the Ethical Standard issued by the Financial Reporting Council as applied to
listed public interest entities, and we have fulfilled our ethical r
esponsibilities in accordance with these
requirements.
Our audit report is consistent with our additional report to the Audit Committee explaining the results of our audit.
Use of our report
This report is made solely to the Group’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Group’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the Group and the Group’s
members, as a body, for our audit work, for this report, or for the opinions we have formed.
Paul Randall FCA (Senior Statutory Auditor)
For and on behalf of RPG Crouch Chapman LLP
Chartered Accountants
Registered Auditor
40 Gracechurch Street
London
EC3V 0BT
25 April 2024
Annual Report & Financial Statements 2023 41
Year ended Year ended
31 December 31 December
2023 2022
Note £ £
Revenue 7 200,000 –
Other income – –
Administrative expenses 9 (1,499,193 ) (1,306,561 )
Share based payments - directors and senior managers 9 (10,402 ) (8,427 )
Research and development expenditure 9 (620,159 ) (319,315 )
Operating loss & loss before, interest, taxation & depreciation (1,929,754 ) (1,634,303 )
Interest receivable 1,469 –
Interest payable (58 ) –
Depreciation 14 (3,890 ) –
Loss for the year before taxation (1,932,233 ) (1,634,303 )
Taxation 10 187,693 18,886
Loss for the year (1,744,540 ) (1,615,417 )
Other comprehensive income (loss) 8 27,045 (14,989 )
Total comprehensive loss for the period attributable to equity
holders of the parent (1,717,495 ) (1,630,406 )
Loss per share (basic and diluted) attributable
to the equity holders (pence) 11 (1.35 ) (1.56 )
The notes to the financial statements form an integral part of these financial statements.
Consolidated Statement of Comprehensive Income
42 Roquefort Therapeutics plc
As at As at
31 December 31 December
2023 2022
Note £ £
Assets
Non-current assets
Property, Plant & Equipment 14 50,152 –
Intangible assets 12 5,343,505 5,343,505
Total non-current assets 5,393,657 5,343,505
Current assets
Trade and other receivables 15 157,589 101,738
Cash and cash equivalents 16 537,322 2,322,974
Total current assets 694,911 2,424,712
Total assets 6,088,568 7,768,217
Equity and liabilities
Equity attributable to shareholders
Share capital 19 1,291,500 1,291,500
Share premium 19 4,403,094 4,403,094
Share based payments reserve 20 385,537 375,135
Merger relief reserve 21 3,700,000 3,700,000
Retained deficit (4,293,268 ) (2,548,728 )
Currency translation reserve 8 12,680 (14,365 )
Total equity 5,499,543 7,206,636
Liabilities
Non-Current liabilities
Deferred tax liabilities 18 281,911 281,911
Current liabilities
Trade and other payables 17 307,114 279,670
Total liabilities 589,025 561,581
Total equity and liabilities 6,088,568 7,768,217
The notes to the financial statements form an integral part of these financial statements.
This report was approved by the Board and authorised for issue on 25 April 2024 and signed on its behalf by:
Stephen West
Executive Chairman
Company Registration Number: 12819145
Consolidated Statement of Financial Position
Annual Report & Financial Statements 2023 43
As at As at
31 December 31 December
2023 2022
Note £ £
Assets
Non-current assets
Property, Plant & Equipment 14 50,152 –
Investments 13 4,874,774 4,874,774
Intercompany receivables 812,951 451,622
Total non-current assets 5,737,877 5,326,396
Current assets
Trade and other receivables 15 124,988 64,309
Cash and cash equivalents 16 301,674 2,274,478
Total current assets 426,662 2,338,787
Total assets 6,164,539 7,665,183
Equity and liabilities
Equity attributable to shareholders
Share capital 19 1,291,500 1,291,500
Share premium 19 4,403,094 4,403,094
Share based payments reserve 20 385,537 375,135
Merger relief reserve 21 3,700,000 3,700,000
Retained deficit (3,798,504) (2,288,350)
Total equity 5,981,627 7,481,379
Liabilities
Current liabilities
Trade and other payables 17 182,912 183,804
Total liabilities 182,912 183,804
Total equity and liabilities 6,164,539 7,665,183
The notes to the financial statements form an integral part of these financial statements.
The Company has taken advantage of section 408 of the Companies Act 2006 and consequently a profit and loss
account has not been presented for the Company. The Company’s loss for the financial period was £1,510,524
(2022: loss of £1,287,740).
The financial statements wer
e approved by the Board and authorised for issue on 25 April 2024 and signed on its
behalf by:
Stephen West
Executive Chairman
Company Statement of Financial Position
44 Roquefort Therapeutics plc
Share
Ordinary Based Merger
Share Share Payment relief Retained Translation Total
capital Premium Reserve reserve earnings Reserve equity
£ £ £ £ £ £ £
As at 31 December 2021 719,000 3,460,595 366,708 450,000 (914,321 ) 624 4,082,606
Loss for the year
Exchange differences – – – – – (14,989 ) (14,989 )
Total comprehensive
loss for the year – – – (1,615,417 ) (14,989 ) (1,630,406 )
Transactions with owners
Ordinary shares issued 572,500 942,499
Stamp duty on share issue (18,990 ) (18,990 )
Warrants charge – – 8,427 – – – 8,427
Total transactions with
owners 572,500 942,499 8,427 3,250,000 (18,990 ) – 4,754,436
As at 31 December 2022 1,291,500 4,403,094 375,135 3,700,000 (2,548,728 ) (14,365 ) 7,206,636
Loss for the year
Exchange differences – – – – – 27,045 27,045
Total comprehensive
income / (loss) for the year – – – – (1,744,540 ) 27,045 (1,717,495 )
Transactions with owners
Ordinary shares issued
Warrants charge – – 10,402 – – – 10,402
Total transactions with
owners – – 10,402 – – – 10,402
As at 31 December 2023 1,291,500 4,403,094 385,537 3,700,000 (4,293,268 ) 12,680 5,499,543
The notes to the financial statements form an integral part of these financial statements.
Consolidated Statement of Changes in Equity
Annual Report & Financial Statements 2023 45
Share
Ordinary Merger Based
Share Share relief Payment Retained Total
capital Premium reserve Reserves earnings equity
£ £ £ £ £ £
As at 31 December 2021 719,000 3,460,595 450,000 366,708 (981,620) 4,014,683
Loss for the year – – – – (1,287,740) (1,287,740)
Total loss for the year – – – – (1,287,740) (1,287,740)
Transactions with owners
Ordinary Shares issued
572,500 942,499 3,250,000 – – 4,764,999
Stamp duty on share issue (18,990) (18,990)
Warrants issued – – – 8,427 – 8,427
Total transactions with
owners 572,500 942,499 3,250,000 8,427 (18,990) 4,754,436
As at 31 December 2022 1,291,500 4,403,094 3,700,000 375,135 (2,288,350) 7,481,379
Loss for the year – – – – (1,510,154) (1,510,154)
Total loss for the year – – – – (1,510,154) (1,510,154)
Transactions with owners
Ordinary Shares issued – – – – – –
Share-based payments – – – 10,402 – 10,402
Total transactions with owners – – – 10,402 – 10,402
As at 31 December 2023 1,291,500 4,403,094 3,700,000 385,537 (3,798,504) 5,981,627
The notes to the financial statements form an integral part of these financial statements
Company Statement of Changes in Equity
46 Roquefort Therapeutics plc
Year ended Year ended
31 December 31 December
2023 2022
Note £ £
Cash flow from operating activities
Loss before income tax (1,932,233 ) (1,634,303 )
Adjustments for:
Foreign Exchange 26,533 (9,918 )
Share based payment 20 10,402 8,427
Depreciation 14 3,890 –
Taxation 10 187,693 18,886
Interest income (1,469 ) –
Interest expense 58 –
Changes in working capital:
Increase in trade and other receivables (55,851 ) (20,318 )
Increase in trade and other payables 27,444 59,750
Net cash used in operating activities (1,733,533 ) (1,577,476 )
Cash flow from Investing activities
Purchase of Property, Plant & Equipment (54,042 ) –
Acquisition of subsidiary, net of cash acquired – (103,478 )
Interest received 1,469 –
Net cash used in investing activities (52,573 ) (103,478 )
Cash flows from financing activities
Proceeds from the issue of ordinary shares 19 3,121,202
Share issue costs 19 – (18,990 )
Interest paid (58 ) –
Net cash (used in)/ generated from financing activities (58 ) 3,102,212
Net (decrease)/ increase in cash and cash equivalents (1,786,164 ) 1,421,258
Cash and cash equivalents at the beginning of the period 2,322,974 899,721
Foreign exchange impact on cash 512 1,995
Cash and cash equivalents at the end of the period 16 537,322 2,322,974
Consolidated Statement of Cash Flow
Annual Report & Financial Statements 2023 47
Year ended Year ended
31 December 31 December
2023 2022
Note £ £
Cash flow from operating activities
Loss before income tax (1,546,488) (1,287,740)
Adjustments for:
Non-cash adjustment
Depreciation 14 3,890 –
Share based payment 20 10,402 8,427
Taxation 36,334 –
Changes in working capital:
Increase in trade and other receivables (60,678) (34,288)
Increase in trade and other payables (892) 56,153
Net cash used in operating activities (1,557,432) (1,257,448)
Cash flow from Investing activities
Purchase of Property, Plant & Equipment 14 (54,042)
Acquisition of subsidiary – (109,079)
Borrowings to subsidiaries (361,330) (318,822)
Net cash used in investing activities (415,372) (427,901)
Cash flows from financing activities
Proceeds from the issue of ordinary shares 19 – 3,121,202
Share issue costs 19 – (18,990)
Net Cash from financing activities 3,102,212
Net (decrease)/increase in cash and cash equivalents (1,972,804) 1,416,863
Cash and cash equivalents at the beginning of the period 2,274,478 857,615
Foreign exchange impact on cash – –
Cash and cash equivalents at the end of the period 16 301,674 2,274,478
The notes to the financial statements form an integral part of these financial statements.
Company Statement of Cash Flow
48 Roquefort Therapeutics plc
1. General Information
Act.
The address of its registered office is 85 Gr
The principal activity of the Company is to develop pre-clinical next generation medicines focused on hard-to-
treat cancers.
The Company listed on the London Stock Exchange (“LSE”) on 22 March 2021.
The consolidated financial statements of the Group have been prepared in accordance with UK adopted
International Accounting Standards as issued by the International Accounting Standards Board (IASB) and
endorsed by the UK Endorsement Board. They have been prepared under the assumption that the Group operates
on a going concern basis.
2. New Standards and Interpretations
New and revised accounting standards adopted for the year ended 31 December 2023 did not have any material
impact on the Group’s accounting policies. There are a number of standards, amendments to standards, and
interpretations which have been issued by the IASB that are effective in future accounting periods that the Group
has decided not to adopt early.
The following amendments are effective for the period beginning 1 January 2023:
l IFRS 17 Insurance Contracts;
l Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of Financial Statements and IFRS
Practice Statement 2 Making Materiality Judgements);
l Definition of Accounting Estimates (Amendments to IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors);
l Deferred Tax related to Assets and Liabilities arising from a single transaction (Amendments to IAS 12
Income taxes); and
l International Tax Reform – Pilar Two Model Rules (Amendment to AS 12 Income Taxes) (effective
immediately upon the issue of the amendments and retrospectively).
The following amendments are effective for the period beginning 1 January 2024:
l IFRS 16 Leases (Amendment – Liability in a Sale and Leaseback);
l IAS 1 Presentation of Financial Statements (Amendment – Classification of Liabilities as Current or
Non-current) with Covenants; and
l Amendment to IAS 7 and IFRS 7 - Supplier finance;
The following amendments are effective for the period beginning 1 January 2025:
l Lack of Exchangeability (Amendments to IAS 21 The effects of changes in foreign exchange rates)
The Group is currently assessing the impact of these new accounting standards and amendments. The Group
does not believe that the amendments to IAS 1 will have a significant impact on the classification of its liabilities.
The Group does not expect any other standards issued by the IASB, but not yet effective, to have a material impact
on the Group.
Notes to the Financial Statements
Annual Report & Financial Statements 2023 49
3. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These
policies have been consistently applied to all the period presented, unless otherwise stated.
a) Basis of Preparation
The financial statements of Roquefort Therapeutics plc have been prepared in accordance with UK adopted
International Accounting Standards, and the Companies Act 2006.
The financial statements have been prepared on an accrual basis and under the historical cost convention.
b) Going Concern
The Directors have prepared financial forecasts to estimate the likely cash requirements of the Group over the
period to 30 June 2025, given its stage of development and lack of recurring revenues. In preparing these financial
forecasts, the Directors have made certain assumptions with regards to the timing and amount of future
expenditure over which they have control. The Directors have considered the sensitivity of the financial forecasts
to changes in key assumptions, including, among others, potential cost overruns within committed spend and
changes in exchange rates.
The Group’s available resources are sufficient to cover the Group’s plans to complete existing pre-clinical
development activities during 2024, however, they are not sufficient to co
ver existing committed costs and the
costs of planned activities for at least 12 months from the date of signing these consolidated and company
financial statements.
The Directors plan to raise further funds during 2024 (either through licencing deals and/or other financing
arrangements) and have reasonable expectations that sufficient cash will be raised (either thr
ough licencing deals
and/or other financing arrangements) to fund the planned operations of the Gr
oup for a period of at least
12 months from the date of approval of these financial statements. The funding r
equirement indicates that a
material uncertainty exists which may cast significant doubt o
ver the Group’s and Company’s ability to continue
as a going concern, and therefore its ability to realise its assets and discharge its liabilities in the normal course
of business.
After due consideration of these forecasts, current cash resources, including the sensitivity of key inputs and
success in raising new funding the Directors consider that the Group will have adequate financial r
esources to
continue in operational existence for the foreseeable future (being a period of at least 12 months from the date
of this report) and, for this reason, the financial statements ha
ve been prepared on a going concern basis. The
financial statements do not include the adjustments that would be r
equired should the going concern basis of
preparation no longer be appropriate.
c) Basis of Consolidation
The Group’s financial statements consolidate those of the parent company and its subsidiaries as of 31 December
2023. Lyramid Pty Ltd and Oncogeni Ltd have reporting dates at 31 December whilst the reporting date of
Tumorkine Pty Ltd is 30 June.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised
gains and losses on transactions between Group companies. Where unrealised losses on intra-group asset sales
are reversed on consolidation, the underlying asset is also tested for impairment from a Group perspective.
Amounts reported in the financial statements of its subsidiar
y have been adjusted where necessary to ensure
consistency with the accounting policies adopted by the Group.
Profit or loss and other compr
ehensive income of subsidiaries acquired or disposed of during the year are
recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.
The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and
the non-controlling interests based on their respective ownership interests.
Notes to the Financial Statements
continued
50 Roquefort Therapeutics plc
d) Revenue From Contracts with Customers
The Group recognises revenue as follows:
Commercialisation and milestone revenue
Commercialisation and milestone revenue generally includes non-refundable upfront license and collaboration
fees; milestone payments, the receipt of which is dependent upon the achievement of certain clinical, regulatory
or commercial milestones; as well as royalties on product sales of licensed products, if and when such product
sales occur; and revenue from the supply of products. Payment is generally due on standard terms of 30 to
60 days.
Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue or deferred
consideration, depending on the nature of arrangement. Amounts expected to be recognised as revenue within
the 12 months following the consolidated balance sheet date are classified within curr
ent liabilities. Amounts not
expected to be recognised as revenue within the 12 months following the consolidated balance sheet date are
classified within non-curr
ent liabilities.
Milestone revenue
The Group applies the five-step method under the standard to measure and recognise milestone revenue. The
receipt of milestone payments is often contingent on meeting certain clinical, regulatory or commercial targets,
and is therefore considered variable consideration. The Group estimates the transaction price of the contingent
milestone using the most likely amount method.
The Group includes in the transaction price some or all of the amount of the contingent milestone only to the
extent that it is highly probable that a significant r
eversal in the amount of cumulative revenue recognised will
not occur when the uncertainty associated with the contingent milestone is subsequently resolved.
Milestone payments that are not within the control of the Company, such as regulatory approvals, are not
considered highly probable of being achieved until those approvals are received.
Any changes in the transaction price are allocated to all performance obligations in the contract unless the variable
consideration relates only to one or more, but not all, of the performance obligations.
e) Business Combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred
by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition date fair values of assets
transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any
asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.
Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.
f) Foreign Currency Translation
i) Functional and Presentation Currency
The financial statements are presented in Pounds Sterling (GBP), which is the Group’s functional and presentation
currency.
ii) Transactions and Balances
Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange
differences arising on the retranslation of assets and liabilities are recognised immediately in profit or loss.
iii) Foreign operations
In the Group’s financial statements, all assets, liabilities and transactions of Group entities with a functional
currency other than GBP are translated into GBP upon consolidation. The functional currencies of entities within
the Group have 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 on the acquisition date. Income and
Notes to the Financial Statements
continued
Annual Report & Financial Statements 2023 51
expenses have been translated into GBP at the average rate of over the reporting period. Exchange differences
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 are
reclassified to pr
ofit or loss and are recognised as part of the gain or loss on disposal.
g) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision-makers. The chief operating decision-makers, who are responsible for allocating resources and
assessing performance of the operating segments, has been identified as the executive Board of Directors.
All operations and information are reviewed together so that at present there is only one reportable operating
segment.
In the opinion of the Directors, during the period the Group operated in the single business segment of
biotechnology.
In 2023 the Group derived more than 10% of its revenue from a single external customer.
h) Property, Plant & Equipment
Property, plant and equipment is stated at cost less accumulated depreciation and, where appropriate, less
provisions for impairment.
The initial recognition and subsequent measurement of property, plant and equipment are:
Initial recognition
Property, plant and equipment is initially recognised at acquisition cost, including any costs directly attributable
to bringing the assets to the location and condition necessary for them to be capable of operating. In most
circumstances, the cost will be its purchase cost, together with the cost of delivery.
Subsequent measurement
An asset will only be depreciated once it is ready for use. Depreciation is charged so as to write off the cost of
property, plant and equipment, less its estimated residual value, over the expected useful economic lives of the
assets.
Depreciation is charged on a straight-line basis as follows:
• Equipment 3 years
The disposal or retirement of an asset is determined by comparing the sales proceeds with the carrying amount.
Any gains or losses are recognised within the Consolidated Statement of Comprehensive Income.
i) Goodwill and Intangible Assets
Goodwill represents the future economic benefits arising from a business combination that are not individually
identified and separately recognised. Goodwill is carried at cost less accumulated impairment losses. Refer to
Note (j) for a description of impairment testing procedures.
Transactions where the definition of a business combination, per IFRS 3, is not met due to the asset or group of
assets not meeting the definition of a business, or wher
e the concentration test affords the Directors the option
not to treat as a business, are recognised as an asset acquisition. The Group identifies and r
ecognises the
individual identifiable assets acquir
ed and liabilities assumed and allocates the cost of the group of assets and
liabilities (including directly attributable costs of making the acquisition) to the individual identifiable assets and
liabilities on the basis of their relative fair values at the date of purchase.
Other intangible assets, including licences and patents, that are acquired by the Group and have finite useful liv
es
are measured at cost less accumulated amortisation and any accumulated impairment losses. Refer to Note (j)
for amortisation procedures.
Notes to the Financial Statements
continued
52 Roquefort Therapeutics plc
j) Impairment Testing of Goodwill, Other Intangible Assets and Property, Plant and Equipment
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely
independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment,
and some are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are
expected to benefit from synergies of a related business combination and represent the lowest level within the
Group at which management monitors goodwill.
Cash-generating units to which goodwill has been allocated 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 carr
ying 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.
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the
straight line method over their estimated useful lives, from the date the assets are available for use and is
recognised in profit or loss. The a
vailable for use date is determined as the date from which a product is
commercialised – this had yet to occur, for all intangible assets, at 31 December 2023 and 2022. Goodwill is not
amortised.
k) Financial Instruments
IFRS 9 requires an entity to address the classification, measurement and recognition of financial assets and liabilities.
i) Classification
The Group classifies its financial assets in the following measurement categories:
• those to be measured at amortised cost.
The classification depends on the Group’s business model for managing the financial assets and the contractual
terms of the cash flows.
The Group classifies financial assets as at amor
tised cost only if both of the following criteria are met:
• the asset is held within a business model whose objective is to collect contractual cash flows; and
• the contractual terms give rise to cash flows that are solely payment of principal and interest.
ii) Recognition
Purchases and sales of financial assets are recognised on trade date (that is, the date on which the Group commits
to purchase or sell the asset). Financial assets are derecognised when the rights to receive cash flows from the
financial assets have expired or have been transferred and the Group has transferred substantially all the risks
and rewards of ownership.
iii) Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset
not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of
the financial asset.
Notes to the Financial Statements
continued
Annual Report & Financial Statements 2023 53
Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Receivables
Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows represent
solely payments of principal and interest, are measured at amortised cost. Interest income from these financial
assets is included in finance income using the eff
ective interest rate method. Any gain or loss arising on derecognition
is recognised directly in profit or loss and pr
esented in other gains/(losses) together with foreign exchange gains
and losses. Impairment losses are presented as a separate line item in the statement of profit or loss.
iv) Impairment
The Group assesses, on a forward-looking basis, the expected credit losses associated with any debt instruments
carried at amortised cost. For trade receivables, the Group applies the simplified approach permitted by IFRS 9,
which requires expected lifetime losses to be recognised from initial recognition of the receivables.
l) Taxation
Taxation comprises current and deferred tax.
Current tax is based on taxable profit or loss for the period. Taxable profit or loss differs from profit or loss as
reported in the income statement because it excludes items of income and expense that are taxable or deductible
in other years and it further excludes items that are never taxable or deductible. The asset or liability for current
tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial
information and the corresponding tax bases used in the computation of taxable profit and is accounted for using
the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from initial recognition of goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a transaction that affects neither the
taxable profit nor the accounting pr
ofit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries
and associates, and interests in joint ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that
it is no longer probable that sufficient taxable pr
ofits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or
the asset realised. Deferred tax is charged or credited to profit or loss, ex
cept when it relates to items charged or
credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities on a net basis.
R&D tax rebate receivable represents refundable tax offsets, in cash, from the Australian Taxation Office in r
elation
to expenditure incurred in the current year for eligible research and development activities. Research and
development activities are refundable at a rate of 43.5% for each dollar spent, subject to meeting certain eligibility
criteria. Funds are expected to be received subsequent to the lodgement of the income tax return and research
and development tax incentive schedule for the current financial y
ear. The Group recognises a taxation credit, in
the year the cash is received, which generally relates to expenses during the prior period. In future periods (which
will include UK R&D tax credits), once an established pattern of successful claims is recorded, the Group will
consider an accruals basis, recording the tax credit and a receivable in the period the eligible expenditure
was incurred.
Notes to the Financial Statements
continued
54 Roquefort Therapeutics plc
m) Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and in hand and demand deposits with banks and other financial
institutions, that are readily convertible into known amounts of cash, and which are subject to an insignificant risk
of changes in value.
n) Equity, Reserves and Dividend Payments
Share capital represents the nominal (par) value of shares that have been issued.
Share premium includes any premiums received on issue of share capital. Any transaction costs directly associated
with the issuing of shares are deducted from share premium, net of any related income tax benefits.
Share based payments represents the value of equity settled share-based payments provided to employees, including
key management personnel, and third parties for services provided.
Translation reserve comprises foreign currency translation differences arising from the translation of financial
statements of the Group’s foreign entities into GBP on consolidation.
Retained losses represent the cumulative retained losses of the Group at the reporting date.
Merger relieve reserve arises from the acquisition of Oncogeni Ltd and Lyramid Pty Ltd whereby the excess of the fair
value of the issued ordinary share capital issued over the nominal value of these shares is transferred to his reserve
in accordance with section 612 of the Companies Act 2006
All transactions with owners of the parent are recorded separately within equity.
No dividends are proposed for the period.
o) Earnings Per Ordinary Share
The Company presents basic and diluted earnings per share data for its Ordinary Shares.
Basic earnings per Ordinary Share is calculated by dividing the profit or loss attributable to Shareholders by the
weighted average number of Ordinary Shares outstanding during the period.
Diluted earnings per Ordinary Share is calculated by adjusting the earnings and number of Ordinary Shares for
the effects of dilutive potential Ordinary Shares.
p) Employee Benefits
Provision is made for Lyramid Pty Ltd’s liability for employee benefits arising from services rendered by employees
up to the end of the reporting period. In determining the liability, consideration is given to employee wage increases
and the probability that the employee may satisfy vesting requirements.
Short term obligations
Liability for wages and salaries, including non-monetary benefits, annual leave, long service leave and
accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in other
payables in respect of employees’ services up to the reporting date and are measured at the amounts expected
to be paid when the liabilities are settled.
Other long-term employee benefit obligations
Liability for annual leave and long service leave not expected to be settled within 12 months from the reporting
date is recognised in the provision for employee benefits and measur
ed as the present value of expected future
payments to be made in respect of services provided by employees up to the reporting date, using the projected
unit credit method. Consideration is given to expected future wage and salary levels, of employee departures and
period of service.
Notes to the Financial Statements
continued
Annual Report & Financial Statements 2023 55
Retirement benefit obligations
Contributions for retirement benefit obligations are recognised as an expense as they become payable. Prepaid
contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payment is
available. Contributions are paid into the fund nominated by the employee.
Employee benefits provision
The liability for employee benefits expected to be settled more than 12 months from the reporting date are
recognised and measured at the present value of the estimated future cash flows to be made in respect of all
employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and
pay increases through promotion and inflation have been taken into account.
q) Leases
Leases are accounted for by recognising a right-of-use asset and a lease liability, except for leases of low value
assets and leases with a duration of 12 months or less, for which the lease cost is expensed in the period to which
it relates.
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at
the present value of the lease payments to be made over the term of the lease, discounted using the interest rate
implicit in the lease or, if that rate cannot be readily determined, the consolidated entity’s incremental
borrowing rate.
Lease payments comprise of fix
ed payments less any lease incentives receivable, variable lease payments that
depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a
purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination
penalties.
The variable lease payments that do not depend on an index or a rate are expensed in the period in which they
are incurred. Lease liabilities are measured at amortised cost using the effective interest method. The carrying
amounts are remeasured if there is a change in the following: future lease payments arising from a change in an
index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties.
When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit
or loss if the carrying amount of the right-of-use asset is fully written down.
Right-of-use assets are initially measured at the amount of the lease liability, reduced for any lease incentives
received, and increased for: lease payments made at or before commencement of the lease; initial direct costs
incurred; and the amount of any provision recognised where the Group is contractually required to dismantle,
remove or restore the leased asset.
For contracts that both convey a right to the Group to use an identified asset and r
equire services to be provided
to the Group by the lessor, the Group has elected to account for the entire contract as a lease, i.e. it does not
allocate any amount of the contractual payments to, and account separately for, any services provided by the
supplier as part of the contract.
r) Share-Based Payments
The Company has applied the requirements of IFRS 2 Share-based payments.
The Company issues equity settled share-based payments to the Directors and to third parties for the provision
of services provided for assistance in raising private equity. Equity settled share-based payments are measured
at fair value at the date of grant, or the date of the service provided. The fair value determined at the grant date or
service date of the equity settled share-based payment is recognised as an expense, or recognised against share
premium where the service received relates to assistance in raising equity, with a corresponding credit to the
share based payment reserve. The fair value determined at the grant date of equity settled share based payment
is expensed on a straight-line basis over the life of the vesting period, based on the Company’s estimate of shares
that will eventually vest. Once an option or warrant vests, no further adjustment is made to the aggregate
expensed.
Notes to the Financial Statements
continued
56 Roquefort Therapeutics plc
The fair value is measured by use of the Black Scholes model as the Directors view this as providing the most
reliable measure of valuation. The expected life used in the model has been adjusted, based on management’s
best estimates, for the effects of non-transferability, exercise restrictions and behavioural considerations. The
market price used in the model is the quoted LSE closing price. The fair value calculated is inherently subjective
and uncertain due to the assumptions made and the limitation of the calculation used.
s) Financial Risk Management Objectives and Policies
The Group does not enter into any forward exchange rate contracts.
The main financial risks arising from the Group’s activities are market risk, interest rate risk, foreign exchange
risk, credit risk, liquidity risk and capital risk management. Further details on the risk disclosures can be found in
Note 22.
t) Significant Accounting Judgements, Estimates and Assumptions
The preparation of the financial statements in conformity with International Financial Reporting Standards requires
the use of certain critical accounting estimates. It also requires management to exercise its judgement in the
process of applying the Group’s accounting policies.
Estimates and judgements are continually evaluated, and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances. The Directors
consider the significant accounting judgements, estimates and assumptions used within the financial statements
to be:
Impairment of intercompany loans
The Group and the Company assess at each reporting date whether there is any objective evidence that loans to
subsidiaries are impaired. To determine whether there is objective evidence of impairment, a considerable amount
of estimation is required to determine future credit losses over the 12 month period of life time of the loan.
Impairment of intangible assets and goodwill
As at 31 December 2023 The Group has £5,343,505 of intangible assets which relate to £5,061,594 of in-progress
research and development and £281,911 of goodwill related to the expected tax benefits of the capitalised
amounts. The Group has assessed whether there are any indicators of impairment by estimating the recoverable
amount of each asset or cash-generating unit based on probable future cashflows.
Business combinations
Management uses valuation techniques when determining the fair values of certain assets and liabilities acquired
in a business combination (see Notes 3 and 4). In particular, the fair value of contingent consideration is dependent
on the market capitalisation of the Group exceeding a threshold amount.
In the prior year Management had performed the optional concentration test available under IFRS3, in order to
determine that the acquisition of Oncogeni Ltd can be treated as an asset acquisition. Judgement is required to
determine whether ‘substantially all’ the fair value is concentrated in a single asset or group of assets, and when
considering a group of assets, assessing whether those assets are similar. In determining whether assets are
similar, judgement is required to consider the nature of each single identifiable asset and the risks associated
with managing and creating outputs from the assets (that is, the risk characteristics). Management has
considered that the two separate in-progress research and development programs, MK cell therapy and STAT-6
siRNA therapeutics, are similar as they are both pre-clinical stage oncology treatments.
Notes to the Financial Statements
continued
Annual Report & Financial Statements 2023 57
4. Acquisitions
Acquisition of Oncogeni Ltd
On 16 September 2022, the Group acquired 100% of the equity instruments of Oncogeni Ltd, a UK based business,
thereby obtaining control. The acquisition was assessed as being complementary to the Group’s existing pre-
clinical drug development business. The Group applied the concentration test under IFRS3 and considered it as
an asset acquisition.
The details of the asset acquisition are as follows:
| Fair value of consideration transferred | £ |
| Equity consideration | 3,750,000 |
| Costs directly attributable to acquisition | 109,079 |
| Total | 3,859,079 |
| Recognised amounts of identifiable net assets at book values | |
| Trade and other receivables | 7,294 |
| Cash and cash equivalents | 5,601 |
| Total current assets | 12,895 |
| Trade and other payables | 15,792 |
| Total current liabilities | 15,792 |
| Identifiable net liabilities | 2,897 |
| Intangible asset at cost | 3,861,975 |
| Consideration transferred settled in cash | – |
| Cash and cash equivalents acquired | 5,601 |
| Net cash inflow on acquisition | 5,601 |
Consideration transferred
The acquisition of Oncogeni Ltd was settled for a consideration of £3,750,000, all of which was payable in shares.
£109,079 of costs directly attributable to the acquisition have been included in the consideration of the transaction.
Identifiable net assets
The carrying value of the trade and other receivables acquired as part of the business combination amounted to
£7,294. As of the acquisition date, the Group’s best estimate of the contractual cash flow not expected to be
collected amounted to zero.
5. Investments in Subsidiaries
The parent company has investments in the following subsidiary undertakings which are unlisted:
| Incorporation | Country of | Registered | Proportion of | |||
| Name | date | incorporation | address | Holding | voting rights | Principal activity |
| Oncogeni Ltd | 29 May 2019 | England | 85 Great Portland Street, | Ordinary | 100% | Biotechnology |
| First Floor, London, | shares | research | ||||
| England, W1W 7LT | company | |||||
| Lyramid Pty | 1 July 2016 | Australia | Suite 4, | Ordinary | 100% | Biotechnology |
| Limited | 246-250 Railway Parade, | shares | research | |||
| West Leederville, | company | |||||
| WA 6007, Australia | ||||||
| Tumorkine Pty | 11 March 2022 | Australia | Suite 4, | Ordinary | 100% | Dormant |
| Limited | 246-250 Railway Parade, | shares | ||||
| West Leederville, | ||||||
| WA 6007, Australia |
Notes to the Financial Statements
continued
58 Roquefort Therapeutics plc
6. Directors’ and Employees’ Remuneration
The aggregate remuneration comprised:
| Group | Group | Company | Company | |
| Year ended | Year ended | Year ended | Year ended | |
| 31 December | 31 December | 31 December | 31 December | |
| 2023 | 2022 | 2023 | 2022 | |
| £ | £ | £ | £ | |
| Wages and salaries | 929,019 | 509,301 | 808,135 | 383,350 |
| N.I and other Social Security | ||||
| 98,363 | 33,814 | 98,363 | 33,814 | |
| Pension costs | ||||
| 54,949 | 23,804 | 43,460 | 12,270 | |
| Share-based payments | 5,616 | 5,619 | 5,616 | 5,619 |
| 1,087,947 | 572,538 | 955,574 | 435,053 |
Remuneration of Key Management Personnel
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
| £ | £ | |
| Salaries and short-term employee benefits | 613,000 | 308,692 |
| Long term benefits | – | – |
| Post-employment benefits | ||
| 41,700 | 12,162 | |
| Share based payment charge | 5,616 | 5,619 |
| 660,316 | 326,473 |
Key management personnel has been defined as the directors of Roquefort Therapeutics plc only.
The total remuneration of the highest paid director was £305,800 (2022: £118,305), including pension
contributions of £27,800 (2022: £4,054).
Further information about the remuneration of individual directors is provided in the Directors’ Remuneration
Report.
Average number of employees during the year (including Directors full time equivalent)
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
| £ | £ | |
| Continuing operations | 10 | 5 |
At 31 December 2023 the Company had nine (9) employees in total; seven (7) Directors & (2) laboratory staff.
Lyramid Pty Ltd has one (1) employee engaged in Research & Development.
Oncogeni Ltd has no employees.
Notes to the Financial Statements
continued
Annual Report & Financial Statements 2023 59
7. Revenue
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
| £ | £ | |
| Licence revenue | 200,000 | – |
Revenue in 2023 was fully generated in the UK and represents licencing revenue for exclusive worldwide use
(excluding Japan) for certain Midkine antibodies in the field of medical diagnostics. Future revenue is subject to
the reaching of certain commercial milestones with the initial £200,000 representing the initial non-refundable
deposit. The Company expects the next milestone to be achieved in Q4 of 2024. The total revenue was generated
from one customer.
8. Other Comprehensive Income
Items credited/(charged) to the other comprehensive income line of the statement of comprehensive income
relate to the impact of foreign exchange movements on cash and cash equivalents balances. The corresponding
movement is offset against the foreign exchange reserve in the statement of financial position:
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
| £ | £ | |
| Opening Balance | (14,365) | 624 |
| Foreign exchange impact | 27,045 | (14,989) |
| Closing Balance | 12,680 | (14,365) |
9. Operating Loss
The following items have been charged to the statement of comprehensive income in arriving at the Group’s
operating loss from continuing operations:
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
| £ | £ | |
| Directors’ and employee costs | 856,333 | 365,564 |
| Legal fees | 28,182 | 46,373 |
| Consulting and professional fees | 217,876 | 209,768 |
| Other expenditure | 396,802 | 684,856 |
| Administrative expenses | 1,499,193 | 1,306,561 |
| Share based payments to directors and senior management | 10,402 | 8,427 |
| Research and development expenditure | ||
| 1 | ||
| 620,159 | 319,315 | |
| Total operating expenditure | 2,129,754 | 1,634,303 |
1
Includes short term license expense of £178,923 for right of use of a laboratory and its equipment during the year (2022: £81,250).
During the year the Group obtained the following services from its auditor:
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
| £ | £ | |
| Audit Services | ||
| Statutory audit – Group and Company | 65,000 | 157,336 |
| Non-audit services | – | – |
| 65,000 | 157,336 |
Notes to the Financial Statements
continued
60 Roquefort Therapeutics plc
The Group incurred no finance costs during the year ended 31 December 2023 (2022: £nil).
10. Taxation
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
| £ | £ | |
| Current tax | – | – |
| Deferred tax | – | – |
| Australian R&D rebate | ||
| 1 | ||
| 151,359 | 18,886 | |
| UK R&D rebate | 36,334 | – |
| Income tax credit | 187,693 | 18,886 |
1
R&D tax rebate receivable represents refundable tax offsets, in cash, from the Australian Taxation Office (“ATO”) in relation to expenditure incurred in the prior year
for eligible research and development activities
Income tax can be reconciled to the loss in the statement of comprehensive income as follows:
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
| £ | £ | |
| Loss | (1,932,233) | (1,615,417) |
| R&D tax rebate | (151,359) | (18,886) |
| (2,083,592) | (1,634,303) | |
| Tax at the corporation rate of 25% (2022:19%) | 520,898 | 310,517 |
| Effect of overseas tax rates | ||
| 1 | ||
| – | 21,642 | |
| Expenditure disallowable for taxation | (65,298) | (82,705) |
| Share based payment temporary difference on which | ||
| no deferred tax asset has been recognised | (2,601) | (1,067) |
| Remeasurement of deferred tax for changes in tax rates | 5,678 | 74,363 |
| Tax losses on which no deferred tax asset has been recognised | (458,677) | (322,750) |
| Total tax (charge)/credit | – | – |
| UK | – | – |
| Overseas | – | – |
| Total tax (charge)/credit) | – | – |
1
In the current year the UK corporation tax was increased to 25% which is equal to the Australian Small Company tax rate of 25%.
The Group has accumulated tax losses of approximately £3,301,716 (2022: £1,557,117) that are available, under
current legislation, to be carried forward indefinitely against future profits.
The tax losses can be broken down to the following:
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
| £ | £ | |
| Australia | (350,039) | (125,138) |
| United Kingdom | (2,951,677) | (1,431,979) |
| Carried forward tax losses | (3,301,716) | (1,557,117) |
Notes to the Financial Statements
continued
Annual Report & Financial Statements 2023 61
A deferred tax asset has not been recognised in respect of these losses due to the uncertainty of future profits.
The amount of the deferred tax asset not recognised is approximately £837,982 (2022: £389,279).
| Year ended | Year ended | |||
| 31 December 2023 | 31 December 2022 | |||
| £ | £ | |||
| UK | AU | UK | AU | |
| Opening balance | (372,176) | (31,285) | – | – |
| Tax effect of temporary differences: | ||||
| Accumulated losses | (392,477) | (56,225) | (357,995) | (31,285) |
| Deductible temporary differences | 36,334 | – | (14,181) | – |
| Deferred tax (asset) not recognised | (728,319) | (87,510) | (372,176) | (31,285) |
The Company calculated the UK deferred tax balances at 25% and the Australian deferred tax balances at the
current small company tax rate of 25%, which is expected to continue in future periods.
11. Earnings Per Share
| Year ended | Year ended | |
| 31 December | 31 December | |
| 2023 | 2022 | |
| £ | £ | |
| Loss attributable to equity shareholders | (1,744,540) | (1,615,417) |
| Weighted average number of ordinary shares | 129,149,998 | 103,479,476 |
| Loss per share in pence | ||
| Basic | (1.35) | (1.56) |
| Diluted | (1.35) | (1.56) |
There is no difference between the diluted loss per share and the basic loss per share presented. Share options
and warrants could potentially dilute basic earnings per share in the future but were not included in the calculation
of diluted earnings per share as they are anti-dilutive for the year presented.
As at the end of the financial period there were 23,875,000 (2022: 35,272,000) warrants in issue.
12. Intangible Assets
| In-progress R&D | Goodwill | Total | |
| £ | £ | £ | |
| Cost | |||
| At 1 January 2023 | 5,061,594 | 281,911 | 5,343,505 |
| Acquired through asset acquisition | – | – | – |
| At 31 December 2023 | 5,061,594 | 281,911 | 5,343,505 |
| Amortisation | |||
| At 1 January 2023 | – | – | |
| Amortisation | – | – | – |
| Impairment Charge | – | – | – |
| At 31 December 2023 | – | – | – |
| Carrying value | |||
| At 31 December 2023 | 5,061,594 | 281,911 | 5,343,505 |
Notes to the Financial Statements
continued
62 Roquefort Therapeutics plc
| In-progress R&D | Goodwill | Total | |
| £ | £ | £ | |
| Cost | |||
| At 1 January 2022 | 1,199,619 | 281,911 | 1,481,530 |
| Acquired through asset acquisition | 3,861,975 | – | 3,861,975 |
| At 31 December 2022 | 5,061,594 | 281,911 | 5,343,505 |
| Amortisation | |||
| At 1 January 2022 | – | – | |
| Amortisation | – | – | – |
| Impairment Charge | – | – | – |
| At 31 December 2022 | – | – | – |
| Carrying value | |||
| At 31 December 2022 | 5,061,594 | 281,911 | 5,343,505 |
The Directors have concluded that there has been no impairment of the goodwill associated with the acquisition of
Lyramid Pty Limited at 31 December 2023. The Goodwill represents the offsetting balance to the deferred tax liability
for the acquisition of Lyramid Pty Ltd.
At 31 December 2023, the Group performed its annual impairment test in relation to intangible assets not yet available
for use and identified no indicators of impairment in line with IAS 36 Impairment of Assets, as all acquired in-progress
R&D programs are in active development and progressing as planned. At the test date, it was determined that due to
the ongoing pre-clinical research and development in-progress R&D acquired, there was too much uncertainty to
estimate a value-in-use, based on discounted future cash flows from the assets. The Group estimated fair value less
costs to sell, by referring to market transactions for pre-clinical and clinical oncology drug candidates. Due to the nature
of oncology drug development, the fair value is not considered to be particularly sensitive to any one underlying valuation
assumption other than the ultimate outcome of drug development and commercialisation, which is binary.
Accordingly, the Group has concluded that the estimated recoverable amount of the assets did exceed the carrying
amount and therefore no impairment was identified.
13. Investments
| Shares in | |||
| Investment | Investment in | subsidiary | |
| in Lyramid Pty Ltd | Oncogeni Ltd | undertakings | |
| Company | £ | £ | £ |
| Cost at 1 January 2023 | 1,015,695 | 3,859,079 | 4,874,774 |
| Additions | – | – | – |
| Cost at 31 December 2023 | 1,015,695 | 3,859,079 | 4,874,774 |
| Impairment | |||
| At 1 January 2023 | – | – | – |
| Charge for the period | – | – | – |
| At 31 December 2023 | – | – | – |
| Net book value at 31 December 2023 | 1,015,695 | 3,859,079 | 4,874,774 |
Notes to the Financial Statements
continued
Annual Report & Financial Statements 2023 63
| Shares in | |||
| Investment | Investment in | subsidiary | |
| in Lyramid Pty Ltd | Oncogeni Ltd | undertakings | |
| Company | £ | £ | £ |
| Cost at 1 January 2022 | 1,015,695 | – | 1,015,695 |
| Additions | – | 3,859,079 | 3,859,079 |
| Cost at 31 December 2022 | 1,015,695 | 3,859,079 | 4,874,774 |
| Impairment | |||
| At 1 January 2022 | – | – | – |
| Charge for the period | – | – | – |
| At 31 December 2022 | – | – | – |
| Net book value at 31 December 2022 | 1,015,695 | 3,859,079 | 4,874,774 |
The Directors have concluded that there has been no impairment to the investment in Oncogeni Ltd or Lyramid
Pty Limited at 31 December 2023.
Impairment review disclosures required by IAS36 are included in note 12 to the financial statements.
14. Property, Plant & Equipment
| Group and Company | Equipment | Total |
| Cost | ||
| As at 1 January 2022 | – | – |
| Additions | – | – |
| Disposals | – | – |
| As at 31 December 2022 | – | – |
| Additions | 54,042 | 54,042 |
| Disposals | – | – |
| As at 31 December 2023 | 54,042 | 54,042 |
| Accumulated depreciation | ||
| As at 1 January 2022 | – | – |
| Charge for the period | – | – |
| Disposals | – | – |
| As at 31 December 2022 | – | – |
| Charge for the period | (3,890) | (3,890) |
| Disposals | – | – |
| As at 31 December 2023 | (3,890) | (3,890) |
| Net book value | ||
| As at 31 December 2022 | – | – |
| As at 31 December 2023 | 50,152 | 50,152 |
As at 31 December 2023 the Group did not have any right to use assets.
Notes to the Financial Statements
continued
64 Roquefort Therapeutics plc
15. Trade and Other Receivables
| Group | Group | Company | Company | |
| 31 December | 31 December | 31 December | 31 December | |
| 2023 | 2022 | 2023 | 2022 | |
| £ | £ | £ | £ | |
| Other receivables | 105,242 | 45,124 | 95,054 | – |
| Prepayments and accrued income | 52,347 | 56,614 | 29,934 | 64,309 |
| 157,589 | 101,738 | 124,988 | 64,309 |
There are no material differences between the fair value of trade and other receivables and their carrying value at
the year end.
No receivables were past due or impaired at the year end.
16. Cash and Cash Equivalents
| Group | Group | Company | Company | |
| 31 December | 31 December | 31 December | 31 December | |
| 2023 | 2022 | 2023 | 2022 | |
| £ | £ | £ | £ | |
| Cash at bank and in hand | 537,322 | 2,322,974 | 301,674 | 2,274,478 |
The Directors consider the carrying amount of cash and cash equivalents approximates to their fair value.
17. Trade and Other Payables
| Group | Group | Company | Company | |
| 31 December | 31 December | 31 December | 31 December | |
| 2023 | 2022 | 2023 | 2022 | |
| £ | £ | £ | £ | |
| Trade creditors | 144,841 | 68,379 | 82,058 | 26,210 |
| Accruals and other creditors | 162,273 | 211,291 | 100,854 | 157,594 |
| 307,114 | 279,670 | 182,912 | 183,804 |
The fair value of trade and other payables approximates their current book values.
18. Deferred Tax Liabilities
| Group | Company | |
| £ | £ | |
| At 1 January 2022 | 281,911 | – |
| Released in year | – | – |
| Additions | – | – |
| At 31 December 2022 | 281,911 | – |
| At 1 January 2023 | 281,911 | – |
| Additions | – | – |
| At 31 December 2023 | 281,911 | – |
Deferred tax liability is the expected tax implication from the amortisation of the intangible asset acquired as part
of the Lyramid Pty Ltd transaction.
Notes to the Financial Statements
continued
Annual Report & Financial Statements 2023 65
19. Share Capital
| Issued and fully paid | ||||
| Ordinary | Share | Share | ||
| Shares | Capital | Premium | Total | |
| Group and Company | No. | £ | £ | £ |
| As at 1 January 2022 | 71,900,000 | 719,000 | 3,460,595 | 4,179,595 |
| Issue of ordinary shares | ||||
| 1 | ||||
| 50,000,000 | 500,000 | – | 500,000 | |
| Issue of ordinary shares | ||||
| 2 | ||||
| 7,249,998 | 72,500 | 942,499 | 1,014,999 | |
| As at 31 December 2022 | 129,149,998 | 1,291,500 | 4,403,094 | 5,694,594 |
| As at 31 December 2023 | 129,149,998 | 1,291,500 | 4,403,094 | 5,694,594 |
1
On 16 September 2022, the Company issued 50,000,000 ordinary shares of £0.01 to acquire Oncogeni Ltd, recorded at the market price of £0.075 per share.
2
On 16 September 2022, the Company issued 7,249,998 ordinary shares of £0.01 for cash at a placing price of £0.14 per share.
20. Share Based Payment Reserves
The share-based payments reserve is used to recognise the value of equity-settled share-based payments
provided to employees, including key management personnel and external parties as part of their remuneration.
| 2023 | 2022 | |
| Group and Company | £ | £ |
| Opening balance | 375,135 | 366,708 |
| NED and Advisor warrants issued | ||
| 1 | ||
| 10,402 | 8,427 | |
| At 31 December | 385,537 | 375,135 |
1
On 26 June 2022, Ms Jean Duvall, Dr Simon Sinclair and Professor Trevor Jones were awarded 300,000 NED and Advisor warrants each. These warrants entitle the warrant
holder to subscribe for one ordinary share at £0.15 per ordinary share. 50% Warrants are exercisable one year after grant date with the remaining balance exercisable two years
after grant date (April 2024). The expense in 2023 represents the warrants that have vested in the current year.
The fair value of the services received in return for the warrants granted are measured by reference to the fair value of
the warrants granted. The estimate of the fair value of the warrants granted is measured based on the Black-Scholes
valuations model. Measurement inputs and assumptions are as follows:
| Number of | Share | Exercise | Expected | Expected | Risk free | Expected | |
| Warrant | warrants | Price | Price | volatility | life | rate | dividends |
| Director | 750,000 | £0.05 | £0.05 | 50.00% | 5 | 0.15% | 0.00% |
| Director | 750,000 | £0.05 | £0.10 | 50.00% | 5 | 0.15% | 0.00% |
| Broker Placing | 480,000 | £0.05 | £0.05 | 50.00% | 3 | 0.15% | 0.00% |
| Completion | 3,000,000 | £0.10 | £0.10 | 50.00% | 3 | 0.15% | 0.00% |
| Senior Mgt | 4,500,000 | £0.10 | £0.15 | 50.00% | 5 | 0.15% | 0.00% |
| Optiva | 1,320,000 | £0.10 | £0.10 | 50.00% | 3 | 0.15% | 0.00% |
| Orana | 175,000 | £0.10 | £0.10 | 50.00% | 3 | 0.15% | 0.00% |
| NED and Advisor | 900,000 | £0.08 | £0.15 | 50.00% | 5 | 0.15% | 0.00% |
| TOTAL | 11,875,000 |
| Number of | Exercise | ||
| Warrants | Warrants | Price | Expiry date |
| As at 1 January 2022 | 34,475,000 | £0.105 | – |
| Issued on 28 April 2022 | |||
| 1 | |||
| 900,000 | £0.15 | 28 April 2027 | |
| At 31 December 2022 | 35,375,000 | £0.106 | |
| Expired during the year | (11,500,00) | £0.102 | 21 March 2023 |
| As at 31 December 2023 | 23,875,000 | £0.109 |
1
50% of the warrants vest on 28 April 2023 and the remainder vest on 28 April 2024
The weighted average time to expiry of the warrants as at 31 December 2023 is 3.99 years (2022: 3.10 years). Of the
total number of options outstanding at 31 December 2023, 23,425,000 (2022: 34,475,000) had vested and were
exercisable
Notes to the Financial Statements
continued
66 Roquefort Therapeutics plc
The expected volatility was calculated using the Exponentially Weighted Moving Average Mode. Due to limited trading
history comparable listed peer company information was used.
21. Merger Relief Reserve
Under Companies Act Section 612, Merger relief reserve applies when a company has secured at least a
90% equity holding in another company in return for an allotment of equity shares in the issuing company. It
requires that section 610 does not apply to the premium on those shares (i.e. no share premium recognised) and
instead a Merger relief reserve is recognised.
| Group and Company | £ |
| At 1 January 2022 | 450,000 |
| Acquisition of Oncogeni Ltd | |
| 1 | |
| 3,250,000 | |
| At 31 December 2022 | 3,700,000 |
| At 31 December 2023 | 3,700,000 |
1
The issue on 16 September 2022 of 50,000,000 new shares relating to the acquisition of Oncogeni Ltd. The reserve reflects the difference between the nominal value of shares
at the date of issue of £0.01 and the share price immediately preceding the issue of £0.75 per share. The shares issued formed part of the consideration for the acquisition of
100% of the equity of Oncogeni and therefore qualify for merger relief.
22. Financial Instruments and Risk Management
Capital Risk Management
The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the return
to stakeholders. The overall strategy of the Group is to minimise costs and liquidity risk.
The capital structure of the Group consists of equity attributable to equity holders of the Group, comprising issued share
capital, reserves and retained earnings as disclosed in the Statement of Changes of Equity.
The Group is exposed to a number of risks through its normal operations, the most significant of which are interest,
credit, foreign exchange, commodity and liquidity risks. The management of these risks is vested to the Board of
Directors.
The sensitivity has been prepared assuming the liability outstanding was outstanding for the whole period. In all cases
presented, a negative number in profit and loss represents an increase in finance expense / decrease in interest income.
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group’s receivables from customers. Indicators that there is
no reasonable expectation of recovery include, amongst others, failure to make contractual payments for a period of
greater than 120 days past due.
The carrying amount of financial assets represents the maximum credit exposure.
The principal financial assets of the Group are bank balances. The Group deposits surplus liquid funds with counterparty
banks that have high credit ratings, and the Directors consider the credit risk to be minimal.
Notes to the Financial Statements
continued
Annual Report & Financial Statements 2023 67
The Group’s maximum exposure to credit by class of individual financial instrument is shown in the table below:
| Carrying | Maximum | |
| value at | exposure at | |
| 31 December | 31 December | |
| 2023 | 2023 | |
| £ | £ | |
| Trade receivables | – | – |
| Other receivables | 105,242 | 105,242 |
| Cash and cash equivalents | 537,322 | 537,322 |
| 642,564 | 642,564 |
| Carrying | Maximum | |
| value at | exposure at | |
| 31 December | 31 December | |
| 2022 | 2022 | |
| £ | £ | |
| Trade receivables | 56,614 | 56,614 |
| Other receivables | 45,124 | 45,124 |
| Cash and cash equivalents | 2,322,974 | 2,322,974 |
| 2,424,711 | 2,424,711 |
Currency Risk
The Group operates in a global market with income and costs possibly arising in a number of currencies and is exposed
to foreign currency risk arising from commercial transactions, translation of assets and liabilities and net investment in
foreign subsidiaries. Exposure to commercial transactions arise from sales or purchases by operating companies in
currencies other than the Group’s functional currency. Currency exposures are reviewed regularly.
The Group has a limited level of exposure to foreign exchange risk through their foreign currency denominated cash
balances and a portion of the Group’s costs being incurred in Australian Dollars. Accordingly, movements in the Sterling
exchange rate against these currencies could have a detrimental effect on the Group’s results and financial condition.
Currency risk is managed by maintaining some cash deposits in currencies other than Sterling.
The table below shows the currency profiles of cash and cash equivalents:
| At 31 December | At 31 December | |
| 2023 | 2022 | |
| Cash and cash equivalents | £ | £ |
| Sterling | 501,373 | 2,279,240 |
| Australian Dollars | 34,825 | 43,734 |
| US Dollars | 1,124 | – |
| 537,322 | 2,322,974 |
| At 31 December 2023 | At 31 December 2022 | |||
| £ | £ | |||
| +10% weaker | (10%) stronger | +10% weaker | (10%) stronger | |
| Net Loss | ||||
| 1 | ||||
| (22,276) | 22,276 | (34,181) | 34,181 | |
| Carrying value of net assets | ||||
| 2 | ||||
| (4,749) | 4,749 | (594) | 594 |
1
10% weaker relates to the Great British Pound weakening against the currency and therefore the Group would incur greater expenditure in its functional currency
2
10% weaker relates to the Great British Pound weakening against the currency and therefore the net liabilities (excluding intercompany borrowings) denominated in AUD will
increase
Notes to the Financial Statements
continued
68 Roquefort Therapeutics plc
Foreign currency sensitivity analysis
As at 31 December 2023, the sensitivity analysis assumes a +/-10% change of the AUD/GBP, exchange rates,
which represents management’s assessment of a reasonably possible change in foreign exchange rates (2022:
10%). The sensitivity analysis was applied on net loss on the Australian operations and the carrying value of
financial assets and liabilities.
Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to
ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal
and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group seeks to manage liquidity risk by regularly reviewing cash flow budgets and forecasts to ensure that sufficient
liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The Group deems there
is sufficient liquidity for the foreseeable future.
The principal current asset of the business is cash and cash equivalents and is therefore the principal financial
instrument employed by the Group to meet its liquidity requirements. The Board ensures that the business maintains
surplus cash reserves to minimise any liquidity risk.
The financial liabilities of the Group and Company, predominantly trade and other payables, are mostly due within 3
months (2022: 3 months) of the Consolidated Statement of Financial Position date; therefore, the undiscounted amount
payable is the same as their carrying value. Further analysis of the lease commitment is provided in note 24. All other
non-current liabilities are due between 1 to 5 years after the period end. The Group does not have any borrowings or
payables on demand which would increase the risk of the Group not holding sufficient reserves for repayment.
The Group had cash and cash equivalents at period end as below:
| At 31 December | At 31 December | |
| 2023 | 2022 | |
| £ | £ | |
| Cash and cash equivalents | 537,322 | 2,322,974 |
| 537,322 | 2,322,974 |
Interest Rate Risk
The Group is exposed to interest rate risk whereby the risk can be a reduction of interest received on cash surpluses
held and an increase in interest on borrowings the Group may have. The maximum exposure to interest rate risk at the
reporting date by class of financial asset was:
| At 31 December | At 31 December | |
| 2023 | 2022 | |
| £ | £ | |
| Bank balances | 537,322 | 2,322,974 |
| 537,322 | 2,322,974 |
The Group does not currently earn interest on its cash deposits.
Notes to the Financial Statements
continued
Annual Report & Financial Statements 2023 69
23. Financial Assets and Financial Liabilities
| Group | Financial | Financial | |
| Assets | Liabilities | ||
| At amortised | At amortised | ||
| 31 December 2023 | Cost | Cost | Total |
| Financial assets/liabilities | £ | £ | £ |
| Trade and other receivables | 70,243 | – | 70,243 |
| Cash and cash equivalents | 537,322 | – | 537,322 |
| Trade and other payables | – | (307,114) | (307,114) |
| 607,565 | (307,114) | 300,451 |
| Group | Financial | Financial | |
| Assets | Liabilities | ||
| At amortised | At amortised | ||
| 31 December 2022 | Cost | Cost | Total |
| Financial assets/liabilities | £ | £ | £ |
| Trade and other receivables | 101,738 | – | 101,738 |
| Cash and cash equivalents | 2,322,974 | – | 2,322,974 |
| Trade and other payables | – | (279,670) | (279,670) |
| 2,424,712 | (279,670) | 2,145,042 |
| Company | Financial | Financial | |
| Assets | Liabilities | ||
| At amortised | At amortised | ||
| 31 December 2023 | Cost | Cost | Total |
| Financial assets/liabilities | £ | £ | £ |
| Trade and other receivables | 95,054 | – | 95,054 |
| Intercompany receivables | 812,951 | – | 812,951 |
| Cash and cash equivalents | 301,674 | – | 301,674 |
| Trade and other payables | – | (182,912) | (182,912) |
| 1,209,679 | (182,912) | 1,026,767 |
| Company | Financial | Financial | |
| Assets | Liabilities | ||
| At amortised | At amortised | ||
| 31 December 2022 | Cost | Cost | Total |
| Financial assets/liabilities | £ | £ | £ |
| Trade and other receivables | 64,309 | – | 64,309 |
| Intercompany receivables | 451,622 | – | 451,622 |
| Cash and cash equivalents | 2,274,478 | – | 2,274,478 |
| Trade and other payables | – | (183,802) | (183,802) |
| 2,790,409 | (183,802) | 2,606,607 |
24. Commitments
| At 31 December | At 31 December | |
| 2023 | 2022 | |
| £ | £ | |
| Committed at the reporting date but not recognised as liabilities, payable: | ||
| Laboratory rental | – | 37,500 |
| Research & Development | 20,619 | 105,655 |
Notes to the Financial Statements
continued
70 Roquefort Therapeutics plc
25. Contingent Liabilities
The purchase agreement for Lyramid Pty Ltd in December 2021 included an additional contingent deferred consideration
to the Seller to be satisfied in the form of Ordinary Shares as follows:
(a) if prior to fifth anniversary of Admission (on 21 December 2021), the Company’s market capitalisation exceeds
£25,000,000 for a period of 5 or more consecutive trading days the Company shall issue to the Seller (or its
nominee) 5,000,000 Ordinary Shares; and
(b) if prior to fifth anniversary of Admission (on 21 December 2021) the Company’s market capitalisation exceeds
£50,000,000 for a period of 5 or more consecutive trading days the Company shall issue to the Seller (or its
nominee) a further 5,000,000 Ordinary Share. The fair value of contingent deferred consideration was estimated
to be nil at acquisition, at 31 December 2022 and at 31 December 2023.
As there is inherent uncertainty as to when, and if, the milestone will be achieved the Group has disclosed the amount
as a contingent liability as at year end.
There were no other contingent liabilities at 31 December 2023 or 31 December 2022
26. Related Party Transactions
In 2023 £177,942 was paid to Cell Therapy Ltd, a Company in which CEO Ajan Reginald is also a Director, for the recharge
of a license to use a laboratory with equipment and associated running costs including electricity and cleaning (2022:
£122,518). As at 31 December 2023, the Company owed Cell therapy £22,329 (2022: £15,043).
27. Post Reporting Date Events
There have been no significant events subsequent to 31 December 2023.
28. Ultimate Controlling Party
As at 31 December 2023, there was no ultimate controlling party of the Company.
Notes to the Financial Statements
continued
Roquefort Therapeutics plc
85 Great Portland Street
First Floor
London W1W 7LT
www.roquefortplc.com
Perivan.com