TIDMPOLX
RNS Number : 7366A
Polarean Imaging PLC
26 May 2023
Polarean Imaging Plc
("Polarean" or the "Company")
Final results for the year ended 31 December 2022
Notice of Annual General Meeting
Polarean Imaging plc (AIM: POLX), the medical imaging company
announces its audited final results for the year ended 31 December
2022.
In addition, Polarean confirms that the Annual Report and
Accounts for the year ended 31 December 2022, the Notice of the
Annual General Meeting ("AGM") and a Form of Proxy are now
available on the Company's website (
http://www.polarean-ir.com/content/investors/annual-reports.asp )
and will be posted to shareholders shortly.
The AGM will be held at 2500 Meridian Parkway, Suite 175,
Durham, NC 27713, USA at 2 p.m. BST / 9 a.m. EST on 28 June
2023.
Highlights
- United States Food and Drug Administration ("FDA") approval
received for the Company's drug device combination product,
XENOVIEW (xenon Xe 129 hyperpolarised), a hyperpolarised contrast
agent indicated for use with magnetic resonance imaging ("MRI") for
evaluation of lung ventilation in adults and pediatric patients
aged 12 years and older
- Simultaneously with the approval of the XENOVIEW NDA, two
510(k) devices were cleared by the FDA; XENOVIEW VDP is image
processing software that analyses a pulmonary hyperpolarised 129-Xe
MR image and a proton chest MR image to provide visualisation and
evaluation of lung ventilation and the Polarean XENOVIEW 3.0T Chest
Coil
- Research system placements at McMaster University in Ontario,
Canada and Cincinnati Children's Hospital Medical Center
("CCHMC")
- Appointment of Frank Schulkes, Dan Brague and Marcella Ruddy,
MD to the Board as independent Non-Executive Directors
- Appointment of Ken West as Non-Executive Chairman, following the retirement of Jonathan Allis
- Research collaboration with Oxford University Hospitals NHS Trust for long-COVID
- Net cash of US$16.4 million as of 31 December 2022
Post-period end
- First order for a XENOVIEW gas blend cylinder for the
production of XENOVIEW received from CCHMC, representing key
milestone and execution of commercial plan
- First clinical scan utilising XENOVIEW technology in the
United States conducted at CCHMC, marking key milestone for imaging
of lung ventilation
- Selected as one of the featured companies as a poster
presenter at the American Thoracic Society's ("ATS") 2023
Respiratory Innovation Summit
Richard Hullihen, CEO of Polarean, said: "We ended the year with
a tremendous positive in receiving our FDA approval for XENOVIEW.
This was a long road culminating with the decision we were looking
for, and an extraordinary amount of work went into this process
from the entire team. We have now begun to roll out XENOVIEW for
clinical use and expect to see further hospitals adopt doing
clinical XENOVIEW scans in the coming months. We also continue to
explore potential future applications for our technology and remain
positive for the year ahead . Separately, we have been shortlisted
for Breakthrough of the Year and Best Technology at the 2023
European Mediscience Awards, which celebrates private and listed
healthcare, biotech and life sciences companies; we are delighted
by this validation of our technology and our achievement in
securing FDA approval, and are excited to see the outcome.
"On behalf of the Board and the whole Polarean team, I would
like to extend my thanks to our shareholders for all their support
and we look forward to further updating the market in due
course."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
Inquiries:
Polarean Imaging plc www.polarean.com / www.polarean-ir.com
Richard Hullihen, Chief Executive Via Walbrook PR
Officer
Kenneth West, Chairman
Stifel Nicolaus Europe Limited (NOMAD and
Sole Corporate Broker) +44 (0)20 7710 7600
Nicholas Moore / Samira Essebiyea / Kate Hanshaw
(Healthcare
Investment Banking)
Nick Adams / Nick Harland (Corporate Broking)
Walbrook PR Tel: +44 (0)20 7933 8780 or polarean@walbrookpr.com
Anna Dunphy / Phillip Marriage Mob: +44 (0)7876 741 001 / +44 (0)
7867 984 082
RLF Communications (US media mrash@rlfcommunications.com
enquiries)
Michelle Rash (001) 336-823-5501
About Polarean ( www.polarean.com)
The Company and its wholly owned subsidiary, Polarean, Inc.
(together the "Group") are revenue-generating, medical imaging
technology companies operating in the high-resolution medical
imaging space. Polarean aspires to revolutionise pulmonary medicine
by bringing the power and safety of MRI to the respiratory
healthcare community in need of new solutions to evaluate lung
ventilation, diagnose disease, characterise disease progression,
and monitor response to treatment. By researching, developing, and
commercialising novel imaging solutions with a non-invasive and
radiation-free functional imaging platform. Polarean's vision is to
help address the global unmet medical needs of more than 500
million patients worldwide suffering with chronic respiratory
disease. Polarean is a leader in the field of hyperpolarisation
science and has successfully developed the first and only
hyperpolarised MRI contrast agent to be approved in the United
States. On Dec. 23, 2022, the FDA granted approval for Polarean's
first drug device combination product, XENOVIEW(TM) (Xenon Xe(129)
hyperpolarised). Xe(129) MRI is also currently being studied for
visualisation and quantification of gas exchange regionally in the
smallest airways of the lungs, across the alveolar tissue membrane,
and into the pulmonary bloodstream for future clinical
indications.
XENOVIEW IMPORTANT SAFETY INFORMATION
Warnings and Precautions
Risk of Decreased Image Quality from Supplemental Oxygen:
Supplemental oxygen administered simultaneously with XENOVIEW(TM)
inhalation can cause degradation of image quality. For patients on
supplemental oxygen, withhold oxygen inhalation for two breaths
prior to XENOVIEW(TM) inhalation, and resume oxygen inhalation
immediately following the imaging breath hold.
Risk of Transient Hypoxia: Inhalation of an anoxic gas such as
XENOVIEW(TM) may cause transient hypoxemia in susceptible patients.
Monitor all patients for oxygen desaturation and symptoms of
hypoxemia and treat as clinically indicated.
Adverse Reactions
Adverse Reactions in Adult Patients: The adverse reactions (>
one patient) in efficacy trials were oropharyngeal pain, headache,
and dizziness. Adverse Reactions in Pediatric and Adolescent
Patients: In published literature in pediatric patients aged 6 to
18, transient adverse reactions were reported: blood oxygen
desaturation, heart rate elevation, numbness, tingling, dizziness,
and euphoria. In at least one published study of pediatric patients
aged 6 to 18 years, transient decrease in SpO2% and transient
increase in heart rate was reported following hyperpolarized xenon
Xe 129 administration. XENOVIEW(TM) is not approved for use in
pediatric patients less than 12 years of age.
Please see full prescribing information at www.xenoview.net
Chairman's Statement
I am pleased to be able to write this letter with the very
important milestone of United States Food & Drug Administration
("FDA") approval of the Company's drug device combination product,
XENOVIEW, having been accomplished. The broad label of "evaluation
of lung ventilation in adults and pediatric patients aged 12 years
and older" allows the company to execute its commercial strategy of
selling its polarizer and approved gas for clinical scans of
patients suffering from a number of lung diseases where the
accurate measurement of lung ventilation provides the physician
with actionable diagnostic information. In addition, researchers
using Polarean's technology continue to conduct clinical research
that supports the broad future potential applications of our
technology in areas of gas exchange and cardiopulmonary
diagnostics. We are excited to bring Polarean's technology to
clinical medicine, with the potential to be an important part of
pulmonary and cardiopulmonary diagnostics, monitoring of severity
of disease and patient response to treatments.
During 2022, we strengthened our Board with the addition of
three independent Non-Executive Board members who bring extensive
industry and medical experience to the Board to assist the
company's successful transition into the commercialization stage.
Frank Schulkes brings substantial financing experience in the
medical imaging industry and Dan Brague brings experience
successfully commercializing diagnostic imaging products. In
addition, Dr. Marcella Ruddy brings important pulmonary medical
expertise, both in clinical practice and in pharmaceutical
development. With these additions to our Board, we believe that we
have a world-class Board that can lead the company to successful
commercialization of Xenoview.
Having achieved FDA approval, our efforts are now focused on
gaining commercial traction and engaging with potential corporate
partners to further accelerate our commercial success. Once we have
achieved some of these near-term milestones, we will explore the
options for additional financing to more aggressively pursue the
development of the next indications and advance the continued
development of our polarizer system and software. The Company is
exploring a broad range of options for future financing, including
equity raises and corporate partnering.
On behalf of the Board, I want to thank our employees,
stakeholders and shareholders and assure them that we are committed
to making Xenoview a commercial and financial success.
Kenneth West
Non-Executive Chairman
25 May 2023
Chief Executive Officer's Statement
2022 - Year of Obtaining FDA Approval
We spent much of 2022 working on obtaining FDA approval of our
New Drug Application ("NDA") for XENOVIEW and were please received
our approval on 23 December 2022. After receiving a Complete
Response Letter ("CRL") from the FDA in October 2021, we spend the
subsequent six months addressing the issues raised in the CRL. On
30 March 2022, the Company refiled the NDA with the FDA. The
resubmission addressed the items identified in the CRL. On 22
September the Company announced that the FDA had requested
additional information related to the cGMP (Current Good
Manufacturing Practice) pre-approval inspection at the partner's
production facility. The Company and its partner addressed the
FDA's request and the Company received FDA approval on 23 December
2022. We were very pleased to receive the broad label of evaluation
of lung function in adults and pediatric patients twelve and older.
In addition, the FDA indicated that they would allow us to submit a
non-clinical plan to obtain approval in pediatric patients six and
older. The FDA has granted New Chemical Entity ("NCE") designation
for Xenoview. NCE designation provides the important first mover
protection envisioned under the Hatch Waxman legislation.
Commercialization
With FDA approval, the Company is focused on successful
commercialization of XENOVIEW for the evaluation of lung function.
The Company has an enthusiastic base of US institutions who have
been using our technology for research purposes for years. We are
leveraging this knowledge and enthusiasm by converting its US
research sites to FDA approved configuration and clinical use,
which will allow these sites to purchase Xenoview and perform
clinical scans. In parallel, we are pursuing various reimbursement
codes that could enable the hospitals to be reimbursed for
Xenoview, the polarization process, the MRI procedure and the
analysis of the pulmonary function imaging. If obtained, we believe
that this reimbursement would enable a very compelling return on
investment for hospitals to purchase our polarizer systems. We are
aggressively pursuing our early commercialization targets of the
sale of 15 to 20 polariser systems and 75 to 100 cylinders of
Xenoview by the end of 2024.
We are focusing initially on addressing the high end of the US
academic and teaching hospital market segment, which comprises
approximately the top 1000 institutions nationally having
coincident multiple Centres of Excellence in Pulmonary Medicine and
Radiology. We believe our strategy of selling the capital equipment
and the Xenoview drug on a per cylinder basis could provide a
capital equipment and recurring drug sales model that supports
rapidly growing revenue.
Financials
Sales for 2022 were below our original expectations, as we did
not receive FDA approval in October 2022 as anticipated in the
plan. We adjusted our spending plans commensurate with the delayed
approval, which allowed us to finish 2022 with a higher than
anticipated cash balance of US$16.4 million. We continued to sell
our polariser systems into the research market and completed two
installations during 2022. The current cash balance is expected to
fund the company into late Q2-2024.
Corporate Partnering
We continue to believe that corporate partnering could be an
important part of the Company's business plan. We see the
opportunity to help the pharmaceutical industry reduce by
significant amounts the size, time required to conduct and costs of
their pulmonary drug clinical trials by providing quantitative,
reproducible image-based data. We also see the opportunity to
partner with MRI manufacturers to open up the MRI applications
space to include pulmonary diagnostics, driving the demand for more
MRI systems. In addition, we will explore the opportunity to
partner with pulmonary disease organizations and foundations to
incorporate the use of Xenoview in the diagnosis and treatment of
disease.
Future Indications
Researchers are currently conducting clinical trials and
pharmaceutical company sponsored investigations in multiple areas
of pulmonary disease using our technology. These studies are
highlighting the exciting opportunities in the areas of long COVID
and cardiopulmonary vascular disease. We believe that these areas
could greatly expand the total addressable markets and use of the
Company's technology in the future.
2023 and Beyond
As discussed above, we are focused on achieving early commercial
traction with our broad lung function evaluation label granted by
the FDA in late 2022. In parallel, we are exploring a variety of
partnering opportunities. Once we have achieved some of these
near-term milestones, we will explore the appropriate timing and
structure to finance the continued commercial efforts, clinical
trials to seek approval for the high-value gas exchange and
pulmonary vascular disease indications and continue to improve our
polariser system and imaging software.
This important milestone of FDA approval would not have been
possible without the dedicated team of employees, consultants and
advisers working to bring our much needed technology to clinicians,
their patients and the institutions enabling their care. I thank
everyone for their hard work in accomplishing this significant
achievement.
Richard Hullihen
Chief Executive Officer
25 May 2023
Strategic Report
1. Introduction
The Group comprises medical drug-device combination companies
operating in the high-resolution medical imaging market. The Group
develops equipment that enables existing MRI systems to achieve an
improved level of pulmonary functional imaging and specialises in
the use of polarised xenon gas (129Xe ) as an imaging agent to
visualise ventilation (the ability of air to reach the alveoli) and
gas exchange (the ability of oxygen to diffuse through the alveolar
membrane into the pulmonary vasculature) regionally down to the
smallest airways of the lungs, the tissue barrier between the lung
and the bloodstream and in the pulmonary vasculature; and now also
microvascular haemodynamics within the lung, a novel diagnostic
approach. The Group will also register and sell the
high-performance MRI radiofrequency (RF) coils which are a required
component for imaging 129Xe in the MRI system. Providing access to
these coils facilitates the adoption of the Xenon technology by
providing application-specific RF coils which optimise the imaging
of 129Xe in MRI equipment.
The Group was formed on 31 May 2017 when the Company acquired
Polarean, Inc (the "Subsidiary"). The Subsidiary was formed as a
result of two mergers: the first between Polarean Merger-Sub Inc.
and m2m, a company that the Subsidiary had developed a relationship
with during the course of previous research and commercialisation
programmes in the US and the second between m2m and the Subsidiary.
m2m was previously a portfolio company of Amphion Innovations plc
("Amphion"), a developer of medical, life science, and technology
businesses, which is itself currently listed on AIM.
Investment Case
Pulmonary disease currently affects hundreds of millions of
people globally, including approximately 174 million people who
suffer from Chronic Obstructive Pulmonary Disease ("COPD"), which
is responsible for approximately 6% of such deaths globally each
year. In the US more than 30 million people suffer from a chronic
lung disease such as COPD, which includes emphysema, chronic
bronchitis and asthma. In addition to its significant human toll,
pulmonary disease also represents an economic burden in excess of
US$150 billion annually in the US alone.
Every type of pulmonary disease involves some combination of
ventilation and/or gas exchange impairment, yet the successful and
cost-effective treatment of lung disease is hampered by sub-optimal
methods for quantifying pulmonary ventilation and gas exchange.
Current diagnostic techniques are either imprecise (such as
spirometry) and/or expose the patient to potentially dangerous
radiation (such as x-rays, CT scans and nuclear scintigraphy).
While spirometry has benefits as a screening tool, none of these
current methods can visualise ventilation or gas exchange
regionally in the smallest airways, where lung disease typically
begins and where improvements from new pharmaceutical therapies can
first be detected.
As such, the Group operates in an area of significant unmet
medical need and is pursuing approval by the US Food & Drug
Administration ("FDA") for the Group's drug-device combination
product using hyperpolarised xenon-129 gas to enhance MRI in
pulmonary medicine. The Company submitted a new drug application
("NDA") to the FDA on 5 October 2020 after the successful
completion of the FDA Phase III clinical trials in the US for the
Group's technology. The 80-patient equivalence clinical trials were
conducted at Duke University Medical Center, the University of
Virginia and The University of Cincinnati - three leading US
research hospitals. Enrolment of the clinical trials was completed
in November 2019. In January 2020, the Company announced that both
clinical trials met their primary endpoints, within the
prospectively defined equivalence margin (+/-14.7%) when compared
to the FDA-approved reference standard, 133Xenon scintigraphy
imaging. On 5 October 2021, the Company received a Complete
Response Letter ("CRL") from the FDA requesting that the Company to
address approvability issues identified by the FDA ahead of NDA
resubmission. On 30 March 2022, the Company filed the resubmission
of the NDA with the FDA. On 20 April 2022, the Company announced
that the FDA had accepted the resubmission of the NDA and
established a user fee goal date of 30 September 2022. On 30
September 2022, the Company announced that the FDA had granted the
Company a 90 day extension to the NDA review timeline. On 28
December
2022, the Company announced that the FDA had granted approval
for its drug device combination product, XENOVIEW. XENOVIEW,
prepared from the Xenon Xe 129 Gas Blend, is a hyperpolarised
contrast agent indicated for use with magnetic resonance imaging
("MRI") for evaluation of lung ventilation in adults and pediatric
patients aged 12 years and older. On 28 December 2022, the Company
also announced that, simultaneously with the approval of the
XENOVIEW NDA, two 510(k) devices were cleared by the FDA that will
further support a successful launch of the technology into the
clinical marketplace: XENOVIEW VDP software and the XENOVIEW 3.0T
Chest Coil. XENOVIEW VDP is image processing software that analyzes
a pulmonary hyperpolarised 129-Xe MR image and a proton chest MR
image to provide visualization and evaluation of lung ventilation
in adults and pediatric patients aged 12 years and older. This
image analysis platform quantifies normalized xenon intensity of a
ventilated space using a pulmonary hyperpolarised 129-Xe
ventilation MR image and accompanying proton chest MR image. The
software will be used by clinicians to assist in the interpretation
and numerical classification of hyperpolarized 129-Xe ventilation
MR images. The Polarean XENOVIEW 3.0T Chest Coil is a flexible,
single channel, transmit-receive (T/R) RF coil tuned to 129Xe
frequency on a 3.0T MRI magnetic field of a compatible MRI scanner.
The Polarean XENOVIEW 3.0T Chest Coil is indicated to be used in
conjunction with compatible 3.0T MRI scanners and approved xenon Xe
129 hyperpolarised for oral inhalation for evaluation of lung
ventilation in adults and pediatric patients aged 12 years and
older. The Chest Coil is intended to be worn by a patient who
inhales hyperpolarised 129Xe gas (XENOVIEW) to obtain an MR image
of the regional distribution of hyperpolarised 129Xe in the
lungs.
The Group's technology overcomes important limitations of
current lung diagnostic methods, providing the ability to
visualise, quantify and monitor both the structure and function of
the smallest airways and alveolar spaces with enhanced sensitivity
and without harmful radiation. This provides a unique, valuable and
more precise tool to help diagnose disease earlier, identify the
type of intervention likely to benefit a patient, monitor the
efficacy of treatment and facilitate developing new therapies for
pulmonary diseases.
Group Structure and History
The Company was incorporated in England and Wales on 24 October
2016 with company registration number 10442853. The Company's
registered office is 27-28 Eastcastle Street, London, W1W 8DH.
On 31 May 2017, m2m, a company formed in the US State of
Delaware on 18 February 1999, was merged into the Company.
On 29 March 2018, the Company's shares were admitted to trading
on the AIM market of the London Stock Exchange.
Information on Polarean, m2m and Strategy of Group
4.1 Polarean, Inc. - Background
The Subsidiary was co-founded by Dr Bastiaan Driehuys, a current
Director of the Company, and John Sudol, a former director of the
Subsidiary, in 2011. Prior to co-founding the Subsidiary, Dr
Driehuys was a member of a research team at Princeton University in
the early 1990s which was amongst the first research teams to focus
on hyperpolarised gas MRI technology; in particular isotopically
enriched helium (3He). The team developed and held key patents
relating to the technology. The technology was acquired in 1999 by
Amersham, Inc. ("Amersham"), with the goal of commercialising
hyperpolarised helium products to be marketed and distributed
alongside Amersham's full line of contrast agent products. Dr
Driehuys led the development efforts for Amersham, which continued
the development of these hyperpolarised helium products throughout
the early 2000s until GE Healthcare ("GE") acquired Amersham in
2004.
GE continued the research and development of hyperpolarised gas
MRI after the acquisition of Amersham, focusing on 129Xe as a more
effective substitute for 3 He in visualising ventilation. GE also
began to explore ways in which 129Xe could be used to image gas
exchange within the lung in addition to ventilation. These work
programmes culminated in the conduct of a Phase I/II clinical trial
at Duke University in 2008-2009. GE also filed Investigational New
Drug Applications ('INDs") with the FDA for both 3He and 129Xe. By
2010, after an investment of approximately US$40 million in the
technology and with the regulatory path for hyperpolarised gas
remaining unclear, GE decided to out-license the hyperpolarised gas
technology and the related patent families that it had developed
and/or maintained to the Subsidiary, due to the scale at the time
and the early-stage nature of the technology's development.
In December 2011, the Subsidiary negotiated the acquisition of
all of GE's assets related to the hyperpolarised MRI project,
including an inventory of polarisers and parts and the licenses (or
outright ownership) of the related patent families.
Following the acquisition of GE's hyperpolarisation assets, the
Subsidiary focused on three key objectives:
-- building and selling polarisers to research users to generate
operating revenue and to disseminate the technology to academic
research institutions that generate clinical data in order to build
additional interest in the technology;
-- further developing the xenon hyperpolarisation technology in
order to meet clinical use specification requirements; and
-- liaising with the FDA in order to clarify the FDA regulatory
path under which the product could achieve clearance to market for
clinical use.
In July 2012, the US Congress passed the FDA Safety and
Innovation Act and the Medical Gas Act, which clarified and
simplified the path under which hyperpolarised gas MRI technology
could be approved for clinical use by the FDA.
As a result of discussions between the Group and the FDA, the
Directors believed that a clearer path towards regulatory approval
existed. As such, following listing our shares on the AIM market
the Group began conducting the clinical studies required for FDA
approval to market. On 28 December 2022, the Company announced that
the FDA had granted approval for its drug device combination
product, XENOVIEW. XENOVIEW, prepared from the Xenon Xe 129 Gas
Blend, is a hyperpolarised contrast agent indicated for use with
MRI for evaluation of lung ventilation in adults and pediatric
patients aged 12 years and older.
Between January 2012 and May 2017, the Subsidiary generated over
US$3.7 million of revenue from selling polarisers to customers in
Canada, Germany, the UK and the US for research use, relating to
both clinical (human) and pre-clinical (animal) applications. In
addition, the Subsidiary received additional funding of
approximately US$2.5 million from Nukem and other Series A
investors. Prior to the m2m merger, the Subsidiary was also
successful in receiving grant funding, including a US$3 million
grant awarded in April 2017 by the US National Heart, Lung and
Blood Institute (NHLBI) following a competitive application process
(for which the research will be conducted with its clinical
collaborator, the Cincinnati Children's Hospital) and a US$250,000
small business research loan from the North Carolina Biotech Center
in March 2017, which was also awarded following a competitive
application process.
4.2 The Group's Technology and Products
The Subsidiary's lead product has been designated as a
drug-device combination by the FDA. The Subsidiary's product
enables the visualisation of hyperpolarised (129) Xe ("HPX")
through MRI technology to help diagnose lung disease earlier,
identify the type of intervention likely to benefit a patient and
to monitor the efficacy of treatment. As a result of the FDA's
drug-device designation, the Subsidiary's products will be approved
and sold only for use with each other. The products are currently
being used at a number of research sites on a pre-FDA clearance
basis to facilitate the research and evaluation of lung function,
to assist in making improved disease progression assessment and to
clearly visualise the effectiveness of several therapeutics which
are under development. The Group currently generates revenue from
the sale of products within its (129) Xe gas hyperpolarisation
platform.
Implementing the Group's technology in a clinical setting is
straightforward: prior to the MRI scan a patient breathes in a
small amount of inert HPX to provide an extremely strong MRI
signal. This transforms the MRI from a technology that is not
applicable to the lungs into one that is able to provide multiple
images of the lung structure and function in one 10-20 second
breath-hold. HPX MRI overcomes the limitations of traditional
pulmonary function testing as HPX MRI:
-- is more accurate and reproducible than spirometry and other
traditional pulmonary function tests, enabling the detection and
mapping of small and localised changes in lung ventilation and gas
exchange over time;
-- provides regional information about lung disease without
exposure to ionising radiation or radioactivity; and
-- assesses ventilation and gas exchange in the smallest airways, where disease often begins.
The Group's technology works in conjunction with traditional
MRI, transforming it into a powerful diagnostic modality for the
lung. The Group's approach is to take (129) Xe, an inert gas, and
hyperpolarise the nucleus to create an MRI signal which is
approximately 100,000 times stronger than a conventional MRI
signal. When the MRI scan is undertaken, the HPX resonates at
different frequencies: (i) in the bronchioles and alveoli of the
lung; (ii) in the barrier tissue of the lung; and (iii) when
dissolved in arterial blood in the pulmonary vasculature, thus
providing information on ventilation (the ability of air to reach
the alveoli) and gas exchange (the ability of air to diffuse
through the alveolar membrane into the pulmonary vasculature). As
all pulmonary diseases result from impairments to the free flow of
air through bronchioles, or from abnormal gas exchange between the
lung alveoli and the pulmonary vasculature, the images that result
from HPX MRI scans which have been executed using the Group's
technology can aid diagnosis, by enhancing the physician's ability
to clearly identify issues with ventilation and gas exchange on a
regional basis, down to the smallest of airways. Hyperpolarisation
of the (129) Xe is accomplished by placing a non-radioactive
isotope of Xenon ((129) Xe) into a beam of circularly polarised
laser light in the presence of very small concentration of the
alkali metal Rubidium, which acts as a physical catalyst in the
hyperpolarisation process. The result is (129) Xe whose nuclear
magnetic spin is highly aligned but not chemically or biologically
different than unpolarised (129) Xe, an inert gas. This
hyperpolarised state persists for around 2 hours allowing ample
time to administer the HPX to the patient.
The Group's products include:
-- the (129) Xe gas, blended and made under GMP at high purity,
to be polarised within the polariser;
-- the polariser itself, of which the latest model, the Polarean
9820 Xenon Hyperpolariser, has been designed to deliver up to 3
litres of HPX per hour (approximately 5-10 doses) of which each
dose is to be used within 30 minutes of its production in order to
retain sufficient polarisation to create a strong image;
-- the dose delivery inhalation bag, made of HPX-compatible
impermeable plastic materials and a mouthpiece for ease of
inhalation; and
-- the Polarean 2881 Polarisation Measurement Station, which
provides a calibrated measurement of the polarisation of
hyperpolarised gas within the dose delivery inhalation bag.
The Group currently designs and builds the polariser equipment
at a contract manufacturer and has relationships with GMP gas
producers to supply the Group with high purity (129) Xe according
to the Group's specifications.
In order to take advantage of the Group's current products, an
MRI machine is required to be outfitted with hardware and software
capable of operating at (129) Xe frequency to detect the HPX
signal. In addition, the patient will need to wear a (129) Xe RF
chest coil to allow for detecting the HPX MR signal in the lungs.
Approximately 35,000 MRI machines are currently in use worldwide
and technically many of these can be easily adapted to be used with
(129) Xe frequency. The Group's products can be placed near the MRI
scanner for ease of radiology workflow and, following the m2m
merger, the Group has continued to explore ways to further
integrate the Group's existing technology with the coils which had
previously been the focus of m2m.
4.3 Location
The Group is based at the Meridian Corporate Center, located in
the Research Triangle Park area of North Carolina, which provides a
favourable location at which to further develop the core technology
and product range. The Group's facilities consist of more than
6,900 square feet of combined offices, laboratory space, inventory
warehouse and assembly and testing areas. The Group benefits from
facilities that were originally purpose-built by GE for the design
and manufacture of hyperpolarisation equipment and components,
pursuant to FDA-mandated guidelines.
Within these facilities are a dedicated research and development
laboratory equipped with 3-phase power, central compressed air,
specialty gas handling and distribution and separate heating,
ventilation and air conditioning. The laboratory area also includes
optical cell production equipment capable of simultaneous
processing of four optical cells for Xenon applications. The
laboratory is designed for safe operation of class 4 lasers and is
equipped with laser power and spectral testing apparatus.
The Group also maintains a dedicated polariser test bed that is
used for product development and a dedicated Nuclear Magnetic
Resonance ("NMR") system capable of delivering available
electromagnetic field strength, utilised for calibrating absolute
polarisation measurements of hyperpolarised gas samples.
4.4 The Regulatory Environment
Prior to the receipt of any approvals for clinical use, the
Group sold its polarisers and disposables for research use only to
academic medical centres with their research being subject to
oversight by their respective institutional review boards and
conducted under IND from the FDA or equivalent regulatory body.
On 28 December 2022, the Company announced that the FDA had
granted approval for its drug device combination product, XENOVIEW.
XENOVIEW, prepared from the Xenon Xe 129 Gas Blend, is a
hyperpolarised contrast agent indicated for use with MRI for
evaluation of lung ventilation in adults and pediatric patients
aged 12 years and older.
4.5 The Group's Customers
The Group's existing customer base already comprises some of the
world's luminary medical imaging research institutions. Indeed,
there are numerous research institutions worldwide utilising the
Group's system and products, including Cincinnati Children's
Hospital, the University of Virginia, University of Wisconsin -
Madison, Duke University, University of Kansas, the University of
Iowa and the University of Texas MD Anderson Cancer Center in the
US, Robarts Research Institute and Hospital for Sick Children
(SickKids) in Canada, the University of Oxford and the University
of Nottingham in the UK and the Fraunhofer Institute for Toxicology
and Experimental Medicine in Germany.
4.6 The Group's Suppliers
The Group has entered into Master Service Agreements with two
CROs in relation to the Phase III trial. Pharma Start LLC, doing
business as Firma Clinical Research, managed the trials and oversaw
the recruitment of patients for the trial. In addition, Icon
Clinical Research Limited assisted with the medical imaging aspects
of the trial.
The Group has a long-standing relationship with its strategic
investor Nukem Isotopes GmbH ("Nukem"), a leading global supplier
of (129) Xe, the isotope of xenon which is provided to the various
gas blenders that in turn supply gas to the Group. It has a supply
agreement with Nukem for (129) Xe.
In June 2020 the Group signed an agreement with Linde Gas North
America LLC ("Linde"), in relation to the supply of the Group's
drug product, a (129) Xenon gas blend. This agreement contains
provision for the supply of bulk (129) Xe to be manufactured into
the Active Pharmaceutical Product (API), (129) Xe, and for the
blending, packaging, and distribution of its drug product under
GMP. On 28 December 2022, the Group signed an amended agreement
with Linde, which modified some commercial terms and limited the
agreement to the blending packaging and distribution of it drug
product under GMP.
The Group has an arrangement with the Blur Product Development
("Blur") to build its polariser systems in Blur's GMP
facilities.
4.7 Current Trading and Prospects
Trading of the Group since the Company's IPO continues to be in
line with the Directors' expectations. The potential of the Group's
technology enables the Directors to view the future with confidence
as the Company focuses on commercialisation of XENOVIEW.
4.8 Growth Strategy
With the recent FDA approval, the Group is adopting a
traditional market entry strategy of building market awareness for
its technology through key opinion leaders and a direct sales force
to reach the key decision makers within its initial target market
of large academic medical centres. In implementing this strategy,
the Group benefits from approximately 1,000 journal articles on the
use of hyperpolarised gas MRI that are currently published in
peer-reviewed journals. Over time, as more research centres
purchase the Group's equipment and begin clinical studies, an
increasing number of peer reviewed scientific articles are likely
to be published, further enhancing the Group's credibility and
raising awareness of the Group's technology. The Directors believe
that the market for polarisers will grow as the technology gains
wider acceptance as a tool for studying lung disease and for
monitoring the effectiveness of therapeutics. The Group also
intends to continue patenting and in-licensing hyperpolarised gas
technology IP to protect its current position.
The Group's initial sales targets will be the radiology and
pulmonary medicine departments of top academic hospital
organisations in the US, who are opinion leaders in the use of new
diagnostic technologies and their application in a clinical
setting.
The Group is expanding its sales and marketing teams. Because of
the specialty nature of the Group's products in the pulmonary
specialist market, which is concentrated in approximately 1,000
medical centres, the Directors believe that a small specialty sales
force can be deployed effectively at reasonable cost.
The Group may also choose to partner with companies that offer
complementary products.
Furthermore, the Directors believe that the Group's products
will benefit a number of clinical applications. While the Group's
HPX MRI technology provides more specific information than
currently available from existing lung diagnostic procedures
(especially spirometry), the Group will focus its use on specific
clinical conditions where the high accuracy of HPX MRI and greater
cost are justified. The Directors do not believe that HPX MRI will
replace low-cost spirometry as a general screening tool but believe
that it should add value in more demanding clinical applications
where HPX MRI addresses unmet diagnostic needs. These applications
could include, but are not limited to, the following:
-- the monitoring of COPD therapy, especially for the most severe cases;
-- the management of cystic fibrosis;
-- determining the optimal use of biologic therapy in chronic asthma;
-- a more efficient diagnosis of dyspnoea and the chronic cough;
-- providing guidance for radiation therapy planning of lung cancer treatment;
-- providing guidance for interventional pulmonology procedures
including ablation and the placement of valves and stents;
-- surgical procedure planning for lung transplant and volume reduction surgery;
-- diagnosis of ILD and monitoring of ILD therapy;
-- diagnosis of pulmonary vascular disease (PVD) including
pulmonary arterial hypertension (PAH) and monitoring of therapy;
and
-- diagnosis and monitoring of long COVID patients.
The Directors have begun to develop relationships with a range
of strategic partners and will evaluate opportunities which will
enable the Group to address its target markets globally, either
alone or in collaboration with a partner.
Intellectual Property ("IP")
The Group's technology has been developed in four areas: (i)
hyperpolarising gas; (ii) assuring the quality of the
hyperpolarised gas; (iii) using the polarised gas in MRI
applications; and (iv) developing and producing specialised RF
coils to improve signal-to-noise ratios ("SNR"). GE had put a
comprehensive patent policy in place to protect its technology from
potential competitors. The Group is now the sole owner of this IP
portfolio, which is based on 10 patent families, and when combined
with the 7 patents that were previously owned by m2m, that were
transferred to the Group following the m2m Merger, the Group's
portfolio covers four broad types of patents:
-- imaging methods - these cover the imaging of a subject, or
patient, who has inhaled a hyperpolarised noble gas and the
functionality of the gas as a contrast agent. Newly licensed
technology from Duke University extends the protection over these
patents through to the early 2030s;
-- hyperpolarisation methods - these are polarimetry patents
covering the methods by which noble gases are polarised and the
methods by which the resulting polarised gas is isolated and
delivered to patients. The latest of these patents expire in the
early 2020s;
-- hyperpolarisation equipment - these patents cover the
multiple preferred mechanical design and automation elements of
hyperpolarised equipment; and
-- RF coil patents - these patents cover the use of cryogenics
to improve RF coils SNR and image quality and may play an important
part in the next generation of applications such as neurological,
cardiac and oncology imaging.
Polarean is committed to proactively developing further IP, both
internally and through licensing arrangements with third parties,
as part of the Group's overall growth strategy. The third parties
are likely to include the Group's key collaborative academic sites,
such as Duke University, that are seeking to develop emerging
applications and technologies. Because of the Group's extensive
patent portfolio and leading market position, the Directors believe
the Group is an attractive licensing partner for academic research
institutions that are interested in out-licensing such IP. One such
patent application (US15/120013), which is currently pending,
relates to improving the overall efficiency of the
hyperpolarisation process. This patent has also been exclusively
licensed to the Group by Duke University. The Directors believe
that this patent, now having been prosecuted successfully to
issuance in a number of geographic jurisdictions worldwide, would
enable the Group to protect methods for increasing the level of
hyperpolarisation significantly, which could improve the
competitive economics of the Group's products.
Principal Risks and Uncertainties
The principal risks and uncertainties facing the Group are
detailed below:
Early stage of operations
The Group's operations are at an early stage of development and
there can be no guarantee that the Group will be able to, or that
it will be commercially advantageous for the Group to, develop its
proprietary technology. Further, the Group currently has no
positive operating cash flow and its ultimate success will depend
on the Directors' ability to implement the Group's strategy,
generate cash flow and access capital markets.
Principal mitigation
The Group has successfully advanced the (129) Xe technology for
several years, including selling polarisers for the research
market. The Group has been able to access capital required to
continue to advance the technology.
Regulatory approvals and compliance
The Group will need to obtain various regulatory approvals
(including FDA and European Medicines Agency ("EMA") approvals) and
otherwise comply with extensive regulations regarding safety,
quality and efficacy standards in order to market its future
products. These regulations, including the time required for
regulatory review, vary from country to country and can be lengthy,
expensive and uncertain.
Principal mitigation
The Group utilises external specialists in regulatory affairs
who consult with other experts to ensure that internal control
processes and clinical trial designs meet current regulatory
requirements. The Group also engages directly with regulatory
authorities when appropriate.
Future funding requirements
The Group will need to raise additional funding or enter into a
strategic partnership with industry partners to undertake work
beyond that being funded by the GBP27 million (before expenses)
2021 fundraising. There is no certainty that this will be possible
at all or on acceptable terms.
Principal mitigation
The Group successfully engaged with investors to generate
significant cash resources to date, including the 2021 financing
that raised GBP27 million, before expenses. The Group's management
team expects that continued access to capital markets, or other
access to capital, will be required to support the Group through
regulatory approval and initial commercialisation efforts in the
US. See Going Concern discussion below.
Dependence on key personnel
The success of the Group, in common with other businesses of a
similar size, will be highly dependent on the expertise and
experience of the Directors and key employees. However, the
retention of such key personnel cannot be guaranteed. Should key
personnel leave the Group's business, prospects, financial
condition or results of operations may be materially adversely
affected.
Principal mitigation
The Group's recruitment processes are designed to identify and
attract the best candidates for specific roles. The Group aims to
provide competitive rewards and incentives to staff and
directors.
Intellectual property and proprietary technology
No assurance can be given that any current or future patent
applications will result in granted patents, that the scope of any
patent protection will exclude competitors or provide competitive
advantages to the Group, that any of the Group's patents will be
held valid if challenged or that third parties will not claim
rights in or ownership of the patents and other proprietary rights
held by the Group.
Principal mitigation
The Group has a long-standing track record of IP generation and
successful applications and has a long-standing relationship with
our patent attorney who has a deep understanding of our technology.
The Group actively manages its IP, engaging with specialists to
apply for and defend IP rights in appropriate territories.
Technology and products
The Group is a developer and service provider for noble gas
(129) Xe devices and ancillary instruments with a special focus on
pulmonary imaging. The development and commercialisation of its
proprietary technology and future products, which are in early
stages of development, will require multiple series of clinical
trials and there is a risk that safety and efficacy issues may
arise when the products are tested. There is also a risk that there
will be delays to the development of the products or that
unforeseen technical problems arise as the Group's technology
becomes increasingly automated. These risks are common to all new
medical products and there is also a risk that the clinical trials
may not be successful.
Principal mitigation
The Group has a depth of knowledge and experience in the area of
medical devices development for the high-resolution medical imaging
market. The Group also utilises external experts to supplement
their knowledge in critical areas such as safety, manufacturing and
software development.
Research and development risk
The Group will be operating in the life sciences and medical
device development sector and will look to exploit opportunities
within that sector. The Group will therefore be involved in complex
scientific research and industry experience indicates that there
may be a very high incidence of delay or failure to produce
results. The Group may not be able to develop new products or to
identify specific market needs that can be addressed by technology
solutions developed by the Group.
Principal mitigation
The Group has a depth of knowledge and experience in the area of
medical devices development for the high-resolution medical imaging
market. The Group also utilises external experts to supplement
their knowledge in critical areas such as conducting clinical
trials and regulatory affairs.
Competition
The Group notes that several start-ups operating in the CT
software space have begun efforts to commercialise products which
represent to characterise lung ventilation. These technologies use
ionising radiation, whereas the Group's technology does not. In
addition, these technologies are unable to further assess gas
exchange, red blood cell transport, nor microvascular
haemodynamics.
Principal mitigation
The Group believes that these emerging technologies validate the
unmet need for the use of imaging in assessing pulmonary function.
However, their use of ionising radiation, combined with their
inability to assess comprehensive pulmonary function will render
their utility limited and the Directors see no effect on the
current market expectations of Polarean.
Reliance on third parties
The business model for the Group anticipates that it will have
limited internal resources over the next few years and that it will
use third party providers wherever possible to conduct the
research, development, registration, manufacture, marketing and
sales of its proposed products. The commercial success of the
Group's products will depend upon the performance of these third
parties.
Principal mitigation
The Group seeks experts in the areas where it utilises
outsourcing. Wherever possible, the Group seeks to have duplicate
suppliers to lessen the reliance on a particular vendor.
Manufacturing
There can be no assurance that the Group's proposed products
will be capable of being manufactured in commercial quantities, in
compliance with regulatory requirements and at an acceptable cost.
The Group outsources the manufacture of the raw materials and
finished products required in connection with the research,
development and commercial manufacture of its proposed products
and, as such, is wholly dependent upon third parties for the
provision of adequate facilities and raw material supplies. (129)
Xe, the specific isotope of xenon which is the active ingredient in
the Group's drug-device product, is available from a limited number
of suppliers and there can be no assurance that adequate supplies
of this material at acceptable cost can be obtained. In addition,
where the Group is dependent upon third parties for manufacture,
its ability to procure the manufacture of the drug-device in a
manner which complies with regulatory requirements may be
constrained, and its ability to develop and deliver such products
on a timely and competitive basis may be adversely affected.
Principal mitigation
The Group has designed the manufacturing process to be scalable
and has internal experts who train the outside vendors. The Group
has established relationships with two (129) Xe suppliers to
mitigate the risk that (129) Xe supply will be a limitation to the
development and commercialisation of its products. In addition, the
Group has established a relationship with a GMP outside polariser
manufacturer.
Product development timelines
Product development timelines are at risk of delay, particularly
since it is not always possible to predict what the FDA will
require for approval of future NDA's. There is a risk therefore
that product development could take longer than presently expected
by the Directors. If such delays occur the Group may require
further working capital. The Directors shall seek to minimise the
risk of delays by careful management of projects.
Principal mitigation
The Group utilises consultants who are experts in preparing and
filing future NDAs in the US.
General legal and regulatory issues
The Group's operations are subject to laws, regulatory
restrictions and certain governmental directives, recommendations
and guidelines relating to, amongst other things, occupational
safety, laboratory practice, the use and handling of hazardous
materials, prevention of illness and injury, environmental
protection and animal and human testing. There can be no assurance
that future legislation will not impose further government
regulation, which may adversely affect the business or financial
condition of the Group.
Principal mitigation
The Group consults experts for advice in areas such as
occupational safety, laboratory practice and human testing.
Healthcare pricing environment
In common with other healthcare products companies, the ability
of the Group and any of its licensees or collaborators to market
its products successfully depends in part on the extent to which
reimbursement for the cost of such products and related treatment
will be available from government health administration
authorities, private health coverage insurers and other
organisations.
Principal mitigation
The Group is consulting with several experts in the field of
reimbursement for healthcare products in the US to determine the
best strategy for accessing adequate reimbursement for its
products.
Section 172 statement
As required by section 172 of the Companies Act 2006 (the
"Act"), a director of a company must act in the way he or she
considers, in good faith, would likely promote the success of the
company for the benefit of the shareholders. In doing so, the
director must have regard, amongst other matters, to the following
issues:
-- the likely consequences of any decisions in the long
term;
-- the interests of the company's employees;
-- the need to foster the company's business relationships with
suppliers/customers and others;
-- the impact of the company's operations on the community and
environment;
-- the company's reputation for high standards of business
conduct; and
-- the need to act fairly between members of the company.
The information required by section 172 of the Act is included
in the full Annual Report.
Kenneth West
Non-Executive Chairman
25 May 2023
Consolidated Statement of Comprehensive Income
2022 2021
Notes US$ US$
Revenue 4 1,033,008 1,185,427
Cost of sales (684,732) (677,402)
Gross profit 348,276 508,025
Administrative expenses (8,464,766) (6,517,396)
Depreciation 11 (277,461) (177,349)
Amortisation 6 (760,780) (757,016)
Selling and distribution expenses (3,310,592) (5,557,829)
Share-based payment expense 19 (1,205,247) (1,814,882)
Total operating costs (14,018,846) (14,824,472)
Operating loss 6 (13,670,570) (14,316,447)
Finance income 7 35,045 2,587
Finance expense 7 (23,762) (21,101)
Other gains/(losses) - net 7 (246,309) 318,957
Loss before tax (13,905,596) (14,016,004)
Taxation 10 - -
------------- -------------
Loss for the year and total other
comprehensive expense (13,905,596) (14,016,004)
Loss per share
-------- --------
Basic and diluted (US$) 9 (0.066) (0.071)
-------- --------
The results reflected above relate to continuing activities.
There are no items of Other Comprehensive Income ("OCI") for the
year other than the loss above and therefore no separate statement
of other comprehensive income has been presented.
Consolidated Statement of Financial Position
Notes 2022 2021
US$ US$
ASSETS
Non-current assets
Property, plant and equipment 11 418,498 634,779
Intangible assets 12 1,581,591 2,193,843
Right-of-use assets 24 274,288 422,816
Trade and other receivables 14 437,539 5,539
------------ -------------
2,711,916 3,256,977
------------ -------------
Current assets
Inventories 15 1,711,419 1,426,810
Trade and other receivables 14 1,659,649 970,968
Cash and cash equivalents 16 16,454,241 28,874,908
------------ -------------
19,825,309 31,272,686
------------ -------------
TOTAL ASSETS 22,537,225 34,529,663
------------ -------------
EQUITY AND LIABILITIES
Equity attributable to holders of
the parent
Share capital 17 103,463 101,642
Share premium 18 59,288,383 59,022,919
Group re-organisation reserve 18 7,813,337 7,813,337
Share-based payment reserve 19 4,865,579 3,660,332
(52,765,804
Accumulated losses 18 ) (38,860,208)
------------ -------------
19,304,958 31,738,022
------------ -------------
Non-current liabilities
Deferred income 21 128,704 145,747
Trade and other payables 22 360,000 -
Lease liability 24 216,691 358,837
Contingent consideration 20 316,000 316,000
------------ -------------
1,021,395 820,584
------------ -------------
Current liabilities
Trade and other payables 22 1,979,001 1,731,114
Lease liability 24 142,146 130,949
Deferred income 21 89,725 108,994
------------ -------------
2,210,872 1,971,057
------------ -------------
TOTAL EQUITY AND LIABILITIES 22,537,225 34,529,663
============ =============
These Financial Statements were approved and authorised for
issue by the Board of Directors on 25 May 2023 and were signed on
its behalf by:
Kenneth West
Non-Executive Chairman
Company number: 10442853
Consolidated Statement of Changes in Equity
Share-based Group
payment re-organisation
Share Share reserve reserve Accumulated
capital premium US$ US$ losses Total
US$ US$ US$ equity
US$
As at 1
January 2021 78,200 23,840,571 1,845,450 7,813,337 (24,844,204) 8,733,354
------------- ------------- ------------- ---------------- ------------- -------------
Comprehensive
income
Loss for the
year - - - - (14,016,004) (14,016,004)
Transactions
with owners
Issue of
shares 23,442 37,284,454 - - - 37,307,896
Share issue
costs - (2,102,106) - - - (2,102,106)
Share-based
payment
expense - - 1,814,882 - - 1,814,882
------------- ------------- ------------- ---------------- ------------- -------------
As at 31
December 2021
(audited) 101,642 59,022,919 3,660,332 7,813,337 (38,860,208) 31,738,022
============= ============= ============= ================ ============= =============
Comprehensive
income
Loss for the
year - - - - (13,905,596) (13,905,596)
Transactions
with owners
Issue of
shares 1,821 265,464 - - - 267,285
Share-based
payment
expense - - 1,205,247 - - 1,205,247
------------- ------------- ------------- ---------------- ------------- -------------
As at 31
December 2022 103,463 59,288,383 4,865,579 7,813,337 (52,765,804) 19,304,958
============= ============= ============= ================ ============= =============
Consolidated Statement of Cash Flows
2021
US$
2022 US$
Cash flows from operating activities
Loss before tax (13,905,596) (14,016,004)
Adjustments for non-cash/non-operating items:
Depreciation of property, plant and equipment 277,461 177,349
Amortisation of intangible assets and right-of
use-assets 760,780 757,015
Loss on disposal of property, plant and
equipment 2,766 590
Loss on remeasurement of right-of-use assets - 11,660
Share-based payment expense 1,205,247 1,814,882
Net foreign exchange losses/(gains) 246,309 (318,957)
Finance expense 23,762 21,101
Finance income (35,045) (2,587)
Operating cash outflows before movements
in working capital (11,424,316) (11,554,951)
------------- -------------
Increase in inventories (284,609) (448,886)
Increase in trade and other receivables (1,120,681) (622,901)
Increase in trade and other payables 607,887 382,247
Decrease in deferred income (36,312) (5,976)
------------- -------------
Net cash used in operations (12,258,031) (12,250,467)
------------- -------------
Cash flows from investing activities
Purchase of property, plant and equipment (63,946) (541,454)
Net cash used in investing activities (63,946) (541,454)
------------- -------------
Cash flows from financing activities
Issue of shares 267,285 37,307,896
Cost of issue - (2,102,106)
Interest paid on lease liabilities (23,762) (21,101)
Interest received 35,045 2,587
Principal elements of lease payments (130,949) (122,069)
Net cash generated by financing activities 147,619 35,065,207
------------- -------------
Net (decrease)/increase in cash and cash
equivalents (12,174,358) 22,273,286
------------- -------------
Cash and cash equivalents at the beginning
of year 28,874,908 6,282,665
------------- -------------
Effect of foreign exchange rate changes
on cash and cash equivalents (246,309) 318,957
------------- -------------
Cash and cash equivalents at end of year 16,454,241 28,874,908
============= =============
Notes to the Financial Statements
General information
The Company is incorporated in England and Wales under the
Companies Act 2006. The registered number is 10442853 and its
registered office is at 27-28 Eastcastle Street, London, W1W 8DH.
The Company is listed on the AIM market of the London Stock
Exchange.
The Company is the parent company of Polarean, Inc (the
"Subsidiary", together the "Group"). The principal activity of the
Group is developing next generation medical imaging technology. The
Subsidiary is incorporated in the United States of America and has
a registered office of 2500 Meridian Parkway #175, Durham, NC
27713, USA.
Adoption of new and revised International Financial Reporting
Standards
Standards and interpretations adopted during the year
Information on new standards, amendments and interpretations
that are relevant to the Group's annual report and accounts is
provided below:
-- Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37);
-- Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16);
-- Annual Improvements to IFRS Standards 2018-2020 (Amendments
to IFRS 1, IFRS 9, IFRS 16 and IAS 41); and
-- References to Conceptual Framework (Amendments to IFRS 3).
These standards have no material impact on the Group.
Standards, amendments and interpretations that are not yet
effective
There are a number of standards, amendments to standards, and
interpretations which have been issued by the United Kingdom
Endorsement Board (UKEB) that are effective in future accounting
periods that the Company has decided not to adopt early. These
standards, amendments or interpretations are not expected to have a
material impact on the Group.
Significant accounting policies
Basis of preparation
These financial statements have been prepared in accordance with
UK adopted International Accounting Standards ("IFRS") and under
the historical cost convention. The financial statements are
presented in United States Dollars ("US$") except where otherwise
indicated.
The principal accounting policies adopted in the preparation of
the financial statements are set out below. The policies have been
consistently applied to all the years presented, unless otherwise
stated.
Going concern
The Group is moving from the development stage to full
commercial exploitation of its IP. During the year ended 31
December 2022 the Group recorded a loss after tax of US$13,905,596
(2021: loss of US$14,016,004) and a net cash outflow from operating
activities of US$12,258,031 (2021: US$12,250,467).
The Directors have prepared financial projections and plans for
a period of at least 12 months from the date of approval of these
financial statements. Based on the current management plan,
management believes that these funds are sufficient for the
expenditure to date as well as the planned forecast expenditure for
the forthcoming 12 months.
It is anticipated that additional capital will need to be raised
by the end of the second quarter of 2024 in order to continue to
fund the Group's activities at their planned levels beyond this
date. This represents a material uncertainty that may cast
significant doubt about the Group's and Company's ability to
continue as a going concern. However, the Directors have a
reasonable expectation that this uncertainty can be managed to a
successful outcome, and based on that assessment, the Group and
Company will have adequate resources to continue in operational
existence for the foreseeable future. Accordingly, these financial
statements have been prepared on the going concern basis.
The financial statements do not reflect any adjustments that
would be required to be made if they were to be prepared on a basis
other than the going concern basis.
Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown in share
premium as a deduction from the proceeds.
Inventory
Inventories are measured at the lower of cost and net realisable
value. The cost of inventories is based on the weighted average
cost principle and includes expenditure incurred in inventories,
adjusted for rebates, and other costs incurred in bringing them to
their existing location.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits with an original maturity of three months or less.
Functional and presentation currency
Items included in the financial statements of the Group are
measured using the currency of the primary economic environment in
which the Group operates ("the functional currency"). The financial
statements are presented in United States Dollars (US$) which is
also the Group's functional currency.
Foreign currencies
Transactions in foreign currencies are initially recorded by the
Group's entities at their respective functional currency spot rates
at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign
currencies are translated at the functional currency spot rates of
exchange at the reporting date.
Differences arising on settlement or translation of monetary
items are recognised in profit or loss.
For the purpose of presenting the consolidated financial
statements, the assets and liabilities of the Group's foreign
operations are translated at exchange rates prevailing on the
reporting date. Income and expense items are translated at the
average exchange rates for each period, unless exchange rates
fluctuate significantly during that period, in which case the
exchange rates at the date of transaction are used. All resulting
exchange differences are recognised in "other comprehensive income"
and accumulated in equity.
Basis of consolidation
The consolidated financial statements are for the year ended 31
December 2022. The measurement bases and principal accounting
policies of the Group are set out below.
On 30 May 2017 Polarean Merger-Sub, Inc., a Subsidiary of the
Subsidiary, completed a merger process under which it acquired
substantially all of the assets of m2m Imaging Corp ("m2m"), a
portfolio company of Amphion Innovations plc engaged in the
development of high-performance MRI RF coils for the global
research market, primarily in micro-imaging. By 2016 m2m had been
inactive for several years due to an inability to raise funds. At
the date of the merger the assets of m2m were its technology and
patents. The merger was affected by way of court sanction in the
process of which the Subsidiary acquired, through a special purpose
entity, Polarean Merger Sub, Inc. the assets of another special
purpose entity, m2m Merger Sub, Inc., with m2m Merger Sub, Inc.
being the surviving entity. After the reporting date, on 1
September 2017, m2m Merger Sub, Inc. was merged into the Subsidiary
with the Subsidiary being the surviving entity, the effect being
that m2m Merger Sub, Inc. was collapsed, and the Subsidiary had
acquired the m2m assets.
As part of the arrangements for the merger 576,430 shares in the
Subsidiary were issued to the former shareholders in m2m with the
intention that all parties would exchange their stock in Polarean,
Inc. for shares in the Group on a pro rata basis as soon as
practicable.
The Directors consider the merger between the Subsidiary and m2m
Acquisition, Inc. as a consequence of which the group acquired the
exclusive worldwide rights to m2m's technology and patents does not
meet the definition of an acquisition of a business as set out in
IFRS3 and has therefore been accounted for as the acquisition of an
asset or a group of assets that does not constitute a business.
IFRS 3 requires that in such cases the acquirer shall identify
and recognise the individual identifiable assets acquired
(including those assets that meet the definition of, and
recognition criteria for, intangible assets in IAS 38 Intangible
assets) and to allocate the cost of the individual identifiable
assets and liabilities on the basis of their relative fair values
at the date of purchase. Such a transaction or event does not give
rise to goodwill.
The fair value of the assets acquired under the merger
arrangement of US$4,999,996 represents the aggregate estimated
value of the financial obligations of the former m2m shareholders
which were converted into equity in m2m prior to the merger
agreement.
The Directors consider the acquisition of the entire issued
common stock of the Subsidiary by the Company in exchange for
equivalent equity participation in the Company to be a group
re-organisation and not a business combination and to fall outside
the scope of IFRS 3. Having considered the requirements of IAS 8
and the relevant UK and US guidance, the transaction has been
accounted for on a merger or pooling of interest basis as if both
entities had always been combined, using book values, with no fair
value adjustments made nor goodwill recognised.
Revenue recognition
Revenue comprises the fair value of the sale of goods and
rendering of services to external customers, net of applicable
sales tax, rebates, promotions and returns.
Contracts and obligation
The majority of customer contracts have three main elements that
the Group provides to the customer:
- Sale of polarisers;
- Sale of parts and upgrades; and
- Provision of service.
The sale of polarisers is seen as a distinct performance
obligation and revenue is recognised at a point in time. The
customer can benefit from the use of the polarisers when supplied
and is not reliant on the Group to provide the parts and upgrades
or service, and therefore revenue from the sale of polarisers is
recognised in full when the goods are delivered to the
customer.
The second performance obligation is the sale of parts and
upgrades. The customer can benefit from the use of the parts and
upgrade when supplied and is not reliant on the Group to provide
the service, and therefore revenue from the sale of parts and
upgrades is recognised in full when the goods are delivered to the
customer.
The third performance obligation is the provision of preventive
maintenance service. Revenue from the provision of preventive
maintenance service is recognised over the period when the services
are rendered. A contract liability represents the obligation of the
Group to render services to a customer for which consideration has
been received (or the amount is due) from the customer.
Determining the transaction price
The transaction price is determined as the fair value of the
Group expects to receive over the course of the contract.
There are no incentives given to customers that would have a
material effect on the financial statements.
Allocate the transaction price to the performance obligations in
the contract
The allocation of the transaction price to the performance
obligations in the contract is non-complex for the Group. There is
a fixed unit price for each product or service sold. Therefore,
there is limited judgement involved in allocating the contract
price to each unit ordered.
Recognise revenue when or as the entity satisfies its
performance obligations
The overarching terms are consistent in each contract.
The sale of polarisers is seen as a distinct performance
obligation and revenue is recognised at a point in time, when title
of the goods transferred to the customer, as the customer can
benefit from the use of the polarisers when supplied.
The sale of parts and upgrades is seen as a distinct performance
obligation and revenue is recognised at a point in time, when
supplied to the customer, as the customer can benefit from the use
of the parts and upgrade when supplied.
The provision of service is seen as a distinct performance
obligation and revenue is recognised as the Group provides these
services for the duration of the contract, i.e. over time. Any
unexpired portion of a service contract or payment received in
advance in respect of service contracts either partially completed
or not started, are included in deferred income and released over
their remaining term.
Property, plant and equipment
Owned assets
Items of property, plant and equipment are stated at cost or
deemed cost less accumulated depreciation and impairment losses.
Cost includes the original purchase price of the asset and the
costs attributable to bringing the asset to its working condition
for its intended use. When parts of an item of property, plant and
equipment have different useful lives, those components are
accounted for as separate items of property, plant and
equipment.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably.
Depreciation
Depreciation is charged to profit or loss on a straight-line
basis over the estimated useful lives of each part of an item of
property, plant and equipment. The estimated useful lives are as
follows:
-- Computer and IT equipment - 33% straight line
-- Leasehold improvements - 20% straight line
-- Laboratory equipment - 20% straight line
The residual values, useful lives and depreciation methods are
reviewed, and adjusted if appropriate, or if there is an indication
of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognised within
administrative expenses in the statement of comprehensive
income.
Intangible Assets
Patents and related rights are assessed by reviewing their net
present value of future cash flows. Patents are currently amortised
over their useful life, not exceeding 10 years.
Internally generated intangible assets - research costs are
costs incurred in research activities and are recognised as an
expense in the period in which they are incurred. An internally
generated intangible asset arising from the development of
commercial technologies is recognised only if all of the following
conditions are met:
-- it is probable that the asset will create future economic benefits;
-- the development costs can be measured reliably;
-- technical feasibility of completing the intangible asset can be demonstrated;
-- there is the intention to complete the asset and use or sell it;
-- there is the ability to use or sell the asset; and
-- adequate technical, financial and other resources to complete
the development and to use or sell the asset are available.
At this time the Directors consider that the Group does not meet
all of those conditions and development costs are therefore
recorded as expense in the period in which the cost is
incurred.
Impairment of non-financial assets
Non-financial assets are reviewed 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 carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset's fair
value less costs to sell and value in use. For the purposes of
assessing impairment, assets are reviewed at the lowest levels for
which there are separately identifiable cash flows (cash-generating
units).
Non-financial assets other than goodwill that suffered
impairment are reviewed for possible reversal of the impairment at
each reporting date.
Provisions
A provision is recognised in the statement of financial position
when the Group has a present legal or constructive obligation as a
result of a past event, and it is probable that an outflow of
economic benefits will be required to settle the obligation. If the
effect is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and, when
appropriate, the risks specific to the liability. The increase in
the provision due to the passage of time is recognised in finance
costs.
Financial assets
The Group classifies all of its financial assets at amortised
cost. Financial assets do not comprise prepayments. Management
determines the classification of its financial assets at initial
recognition.
These assets arise principally from the provision of goods and
services to customers (e.g. trade receivables), but also
incorporate other types of financial assets where the objective is
to hold their assets in order to collect contractual cash flows and
the contractual cash flows are solely payments of the principal and
interest. They are initially recognised at fair value plus
transaction costs that are directly attributable to their
acquisition or issue and are subsequently carried at amortised cost
using the effective interest rate method, less provision for
impairment.
Amortised Cost
The Group's financial assets held at amortised cost comprise
trade and other receivables and cash and cash equivalents in the
consolidated statement of financial position.
Impairment provisions for trade receivables are recognised based
on the simplified approach within IFRS 9 using the lifetime
expected credit losses. During this process the probability of the
non-payment of the trade receivables is assessed. This probability
is then multiplied by the amount of the expected loss arising from
default to determine the lifetime expected credit loss for the
trade receivables. For trade receivables, which are reported net;
such provisions are recorded in a separate provision account with
the loss being recognised within administrative expenses in the
consolidated statement of comprehensive income. On confirmation
that the trade receivable will not be collectable, the gross
carrying value of the asset is written off against the associated
provision.
Impairment provisions for other receivables are recognised based
on the general impairment model within IFRS 9. In doing so, the
Company follows the 3-stage approach to expected credit losses.
Step 1 is to estimate the probability that the debtor will default
over the next 12 months. Step 2 considers if the credit risk has
increased significantly since initial recognition of the debtor.
Finally, Step 3 considers if the debtor is credit impaired,
following the criteria under IAS 39.
Financial liabilities
The Group classifies its financial liabilities in the category
of financial liabilities at amortised cost. All financial
liabilities are recognised in the statement of financial position
when the Group becomes a party to the contractual provision of the
instrument.
Financial liabilities measured at amortised cost comprise trade
payables and other short-dated monetary liabilities, which are
initially recognised at fair value and subsequently carried at
amortised cost using the effective interest rate method.
Unless otherwise indicated, the carrying values of the Group's
financial liabilities measured at amortised cost represents a
reasonable approximation of their fair values.
Employee benefits: pension obligations
The Group operates a defined contribution plan. A defined
contribution plan is a pension plan under which the Group pays
fixed contributions into a separate entity. The Group has no legal
or constructive obligations to pay further contributions if the
fund does not hold sufficient assets to pay all employees the
benefits relating to employee service in the current and prior
periods.
The Group has no further payment obligations once the
contributions have been paid. The contributions are recognised as
employee benefit expense when they are due. Prepaid contributions
are recognised as an asset to the extent that a cash refund or a
reduction in the future payments is available.
Finance costs
Finance costs comprise interest on lease liabilities; and are
expensed using the effective interest method in the period in which
they are incurred.
Finance income
Finance income comprises interest income and dividend
income.
Interest income is recognised in the income statement as it
accrues using the effective interest method.
Other gains and losses - net
Other gains and losses comprise foreign exchange gains and
losses on cash and cash equivalents.
Leases
Definition of a lease
The Group assesses whether a contract is or contains a lease. A
contract is or contains a lease if the contract conveys a right to
control the use of an identified asset for a period of time in
exchange for consideration.
The Group recognises a right-of-use asset and a lease liability
at the lease commencement date. The right-of-use asset is initially
measured at cost, and subsequently at cost less any accumulated
amortisation and impairment losses and adjusted for certain
measurements of the lease liability. Right-of-use assets are
amortised on a straight-line basis over the remaining term of the
lease or over the remaining economic life of the asset if, rarely,
this is judged to be shorter than the lease term.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit or, if that rate cannot
be readily determined, the Group's incremental borrowing rate.
Generally, the Group uses its incremental borrowing rate as the
discount rate.
The lease liability is subsequently increased by the interest
cost on the lease liability and decreased by lease payments made.
It is remeasured when there is a change in future lease payments
arising from a change in an index or rate, a change in estimate of
the amount expected to be payable under a residual value guarantee,
or as appropriate, changes in the assessment of whether a purchase
or extension option is reasonably certain to be exercised or a
termination option is reasonably certain not to be exercised.
The Group has applied judgement to determine the lease term for
some lease contracts in which it is a lease that include renewal
options. The assessment of whether the Group is reasonably certain
to exercise such options impacts the lease term, which
significantly affects the amount of lease liabilities ad
right-of-use assets recognised.
As at 31 December 2022, potential future cash outflows of
$479,477 (undiscounted) have not been included in the lease
liability because it is not reasonably certain that the leases will
be extended (2021: $421,142).
Income tax
Income tax for the years presented comprises current and
deferred tax. Income tax is recognised in the income statement
except to the extent that it relates to items recognised directly
in equity, in which case it is recognised in equity. Current tax is
the expected tax payable on the taxable income for the year, using
tax rates enacted or substantively enacted at the statement of
financial position date, and any adjustment to tax payable in
respect of previous years.
Deferred tax is recognised on temporary differences arising
between the tax bases of assets and liabilities and their carrying
amounts.
The following temporary differences are not recognised if they
arise from a) the initial recognition of goodwill, and b) for the
initial recognition of other assets or liabilities in a transaction
other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss.
Deferred tax is determined using tax rates and laws that have been
enacted or substantially enacted by the balance sheet date and are
expected to apply when the related deferred tax asset is realised,
or the deferred income tax liability is settled.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the asset can be utilised. Deferred tax assets are reduced to
the extent that it is no longer probable that the related tax
benefit will be realised.
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income taxes assets
and liabilities relate to income taxes levied by the same taxation
authority on either the taxable entity or different taxable
entities where there is an intention to settle the balances on a
net basis.
Critical accounting estimates and judgements
The preparation of the Group's financial statements under IFRS
requires the directors to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities. 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.
Actual results may differ from these estimates.
The directors consider that the following judgements are likely
to have the most significant effect on the amounts recognised in
the financial statements.
Carrying value of intangible assets - Group
In determining whether there are indicators of impairment of the
Group's intangible assets, the directors take into consideration
various factors including the economic viability and expected
future financial performance of the asset and when it relates to
the intangible assets arising on a business combination, the
expected future performance of the business acquired.
Carrying value of investments in and amounts receivable from
subsidiaries - Company
In determining whether there are indicators of impairment of the
Company's investments in, and amounts receivable from, its
subsidiary undertakings, the directors take into consideration
various factors including the economic viability and expected
future financial performance of the business of the subsidiary
undertakings.
4. Segmental information
IFRS 8 requires operating segments to be identified on the basis
of internal reports about components of the Group that are
regularly reviewed by the chief operating decision maker (which
takes the form of the Board of Directors) as defined in IFRS 8, in
order to allocate resources to the segment and to assess its
performance.
The chief operating decision maker has determined that the Group
has one operating segment, the development and commercialisation of
gas polariser devices and ancillary instruments. Revenues are
reviewed based on the products and services provided: Polarisers,
Parts and Upgrades, Service and Other revenue.
The Group trades in Canada, Germany, the United Kingdom and the
United States of America. Revenue by origin of geographical segment
for all entities in the Group is as follows:
Revenue
2022 2021
US$ US$
Canada 446,396 529,824
Germany - 6,750
United Kingdom 17,800 25,183
United States of America 568,812 623,670
---------- ----------
Total 1,033,008 1,185,427
========== ==========
Non-current assets
2022 2021
US$ US$
United States of America 2,711,916 3,256,977
---------- ----------
Total 2,711,916 3,256,977
========== ==========
Product and services revenue analysis
Revenue
2022 2021
US$ US$
Polarisers 759,099 826,059
Parts and Upgrades 155,787 275,789
Service 118,122 83,579
Total 1,033,008 1,185,427
========== ==========
Management measures revenues by reference to the Group's core
services and products and related services, which underpin such
income.
5. Employees and Directors
Staff costs for the Group and the Company during the year:
2022 2021
US$ US$
Wages and salaries 4,207,833 3,604,758
Healthcare benefits 248,927 220,476
Social Security costs 290,531 248,063
--------- ---------
4,747,341 4,073,297
========= =========
Average monthly number of people (including directors) employed
by activity:
2022 2021
No. No.
Senior management including directors 11 10
R&D and clinical trial 10 11
Administration 7 7
------ -----
Total 28 28
====== =====
Key management compensation:
The following table details the aggregate compensation paid to
key management personnel.
2022 2021
US$ US$
Salaries and fees 1,527,810 1,394,235
Healthcare benefits 85,025 85,830
Social security costs 70,311 69,465
1,683,146 1,549,530
========== ==========
Key management personnel include all directors who together have
authority and responsibility for planning, directing, and
controlling the activities of the Group and senior divisional
managers.
6. Operating loss
2022 2021
US$ US$
Depreciation
* Owned property, plant and equipment 277,461 177,349
Amortisation of right-of-use assets 148,528 140,164
Amortisation of intangible assets 612,252 616,851
Subtotal Amortisation 760,780 757,015
Research expenses 619,007 649,695
Auditors' remuneration (note 8) 66,000 55,664
Clinical trial costs 1,070,004 (52,599)
Regulatory consulting costs 1,964,040 1,126,675
Legal and professional fees 493,290 494,688
Brand development and market research 134,645 2,091,921
Medical affairs and congress/symposia 353,066 916,238
========== ==========
7. Other income and expense items
2022 2021
US$ US$
Finance income
Sundry income 35,045 2,587
------- -------
Total finance income 35,045 2,587
======= =======
Finance expense
Interest on lease liabilities 23,762 21,101
------- -------
Total finance expense 23,762 21,101
======= =======
2022 2021
Other gains and losses - net US$ US$
Foreign exchange gains/(losses) (246,309) 318,957
(246,309) 318,957
========== ========
8. Auditor remuneration
2022 2021
US$ US$
Auditors' remuneration
Fees payable to the Group's auditor for
audit of Parent Company and Consolidated
Financial Statements 66,000 55,664
======= =======
9. Loss per share
The loss per share has been calculated using the loss for the
year and the weighted average number of ordinary shares outstanding
during the year, as follows:
2022 2021
US$ US$
Loss for the year attributable to shareholders
of the Group (US$) (13,905,596) (14,016,004)
Weighted average number of ordinary shares 211,948,868 196,961,274
----------------- -------------
Basic and diluted loss per share (0.066) (0.071)
================= =============
For diluted loss per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
potential dilutive warrants, options and convertible loans over
ordinary shares. Potential ordinary shares resulting from the
exercise of warrants, options and the conversion of convertible
loans have an anti-dilutive effect due to the Group being in a loss
position. As a result, diluted loss per share is disclosed as the
same value as basic loss per share.
10. Taxation
There were no charges to income tax due to the losses incurred
by the Group in the period.
Income taxes computed at the statutory federal income tax of 21%
(2021: 21%) and the state income tax of 2.5% (2021: 2.50%) UK
corporation tax is calculated at 19% of the estimated assessable
profits for the year.
2022 2021
US$ US$
Loss on ordinary activities before tax (13,905,596) (14,016,004)
Taxable permanent differences (254,993) (49,828)
------------- -------------
Taxable loss on ordinary activities (14,160,589) (14,065,832)
Taxable loss on ordinary activities multiplied
by the rate of corporation tax in the US
as above (2,973,724) (2,953,825)
Effects of:
Adjustments for rate of tax in other jurisdictions 40,752 42,577
Unrelieved tax losses carried forward 2,932,971 2,911,248
Total taxation charge - -
------------- -------------
The tax reform act of 1986 contains provisions which limit the
ability to utilise the net operating loss carry forwards in the
case of certain events including significant changes in ownership
interests. If the Group's net operating loss carried forward, the
Group would incur a federal income tax liability even though net
operating loss carry forwards would be available in future
years.
The Group has tax losses carried forward of US$47,297,438 (2021:
US$33,391,842). The unutilised tax losses have not been recognised
as a deferred tax asset due to uncertainty over the timing of
future profits and gains. In addition, there are approximately
US$726,000 (2021: US$531,000) of unrecognised deferred tax assets
in respect of the share-based payment.
11. Property, plant and equipment
Leasehold Furniture Computers
improvements and equipment and IT equipment Total
US$ US$ US$ US$
Cost
At 1 January 2021 13,658 440,790 59,273 513,721
Additions 17,050 464,585 59,819 541,454
Disposals - - (1,328) (1,328)
-------------- ---------------- ------------------ ----------
At 31 December
2021 30,708 905,375 117,764 1,053,847
Additions 3,500 52,470 7,976 63,946
Disposals - - (5,298) (5,298)
-------------- ---------------- ------------------ ----------
At 31 December
2022 34,208 957,845 120,442 1,112,495
-------------- ---------------- ------------------ ----------
Accumulated depreciation
At 1 January 2021 6,068 213,012 23,377 242,457
Depreciation expense 7,934 146,656 22,759 177,349
Disposals - - (738) (738)
-------------- ---------------- ------------------ ----------
At 31 December
2021 14,002 359,668 45,398 419,068
Depreciation expense 5,864 237,778 33,819 277,461
Disposals - - (2,532) (2,532)
-------------- ---------------- ------------------ ----------
At 31 December
2022 19,866 597,446 76,685 693,997
-------------- ---------------- ------------------ ----------
Carrying amount
At 31 December 2021 16,706 545,707 72,366 634,779
============== ================ ================== ==========
At 31 December
2022 14,342 360,399 43,757 418,498
============== ================ ================== ==========
12. Intangible assets
Patents Total
US$ US$
Cost
At 1 January 2021 5,045,996 5,045,996
Additions - -
---------- ----------
At 31 December 2021 5,045,996 5,045,996
---------- ----------
Additions - -
---------- ----------
At 31 December 2022 5,045,996 5,045,996
---------- ----------
Accumulated amortisation
At 1 January 2021 2,235,302 2,235,302
Amortisation expense 616,851 616,851
At 31 December 2021 2,852,153 2,852,153
---------- ----------
Amortisation expense 612,252 612,252
At 31 December 2022 3,464,405 3,464,405
---------- ----------
Carrying amount
At 31 December 2021 2,193,843 2,193,843
========== ==========
At 31 December 2022 1,581,591 1,581,591
========== ==========
13. Investment in subsidiary undertaking
Investment Amount
in subsidiary due from
undertaking subsidiary Total
US$ undertaking US$
Company US$
Cost
At 31 December 2021 4,342,848 53,837,466 58,180,314
At 31 December 2022 4,342,848 54,019,443 58,362,291
--------------- ------------- -----------
Carrying amount
At 31 December 2021 4,342,848 53,837,466 58,180,314
--------------- ------------- -----------
At 31 December 2022 4,342,848 54,019,443 58,362,291
--------------- ------------- -----------
The investment in subsidiary undertaking is stated at cost less
provision for impairment. The amount due from subsidiary
undertaking are regarded as net investment which is subject to the
impairment assessment whenever events or changes in circumstance
indicate that the carrying value of the investment and the amount
due from subsidiary undertakings may not be recoverable. For the
year under review, there is no such indicator for impairment.
The net carrying amounts noted above relates to the Subsidiary.
The subsidiary undertaking during the year were as follows:
Interest
Country held
Registered office address of incorporation %
Polarean 2500 Meridian Parkway #175,
Inc. Durham, NC 27713, USA USA 100
14. Trade and other receivables
Group Company
Amounts falling due 2022 2021 2022 2021
after one year US$ US$ US$ US$
Rental deposit 5,539 5,539 - -
Prepayments 432,000 - - -
------------- --------- ------------ ------------
437,539 5,539 - -
============= ========= ============ ============
Group Company
Amounts falling due 2022 2021 2022 2021
within one year US$ US$ US$ US$
Trade receivables 109,397 119,096 - -
Prepayments 1,550,252 851,872 68,258 22,410
---------- -------- ------------ ------------
1,659,649 970,968 68,258 22,410
========== ======== ============ ============
Analysis of trade receivables based on age of invoices
Total
< 30 > 90 Total Gross ECL Net
31 - 60 61 -90
$'000 $'000 $'000 $'000 $'000 $'000 $'000
2022 65,558 - - 43,839 109,397 - 109,397
2021 73,500 - 45,097 499 119,096 - 119,096
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses (ECL) which uses a lifetime expected loss
allowance for all trade receivables. The ECL balance has been
determined based on historical data available to management in
addition to forward looking information utilising management
knowledge. The Company applies a similar approach to measuring ECL
for the amounts due from group undertakings.
Trade receivables are amounts due from customers for goods sold
or services performed in the ordinary course of business. They are
generally due for settlement within 30 days and therefore are all
classified as current. The majority of trade and other receivables
are non-interest bearing. Where the effect is material, trade and
other receivables are discounted using discount rates which reflect
the relevant costs of financing. The carrying amount of trade and
other receivables approximates fair value.
15. Inventory
Group
2022 2021
US$ US$
Finished Goods and Component parts 1,711,419 1,426,810
---------- ----------
During the year ended 31 December 2022, a total of US$597,736 of
inventories was included in the statement of comprehensive income
as an expense (2021: US$624,507).
16. Cash and cash equivalents
Group Company
2022 2021 2022 2021
US$ US$ US$ US$
Cash at bank and in
hand 16,454,241 28,874,908 1,716,189 2,454,491
----------- ----------- ----------- ----------
17. Share capital
The issued share capital of the Company was as follows:
Allotted and called 2022 2022 2021 2021
up - Ordinary shares No. US$ No. US$
of 0.037p each
At beginning of period 209,249,966 101,642 163,212,935 78,200
Issue of shares upon
warrant exercise - - 928,089 474
Issue of shares to
investors - - 44,932,142 22,881
Issue of shares upon
option exercise 3,797,543 1,821 176,800 87
------------ -------- ------------ --------
At end of year 213,047,509 103,463 209,249,966 101,642
------------ -------- ------------ --------
On 24 February 2021, the Company issued 61,563 new ordinary
shares upon the exercise of share warrants with an exercise price
of GBP0.15 each.
On 25 March 2021, the Company issued 358,713 new ordinary shares
upon the exercise of share warrants with an exercise price of
GBP0.00037 each.
On 31 March 2021, 7 April 2021 and 8 April 2021 the Company
issued a total of 44,932,142 new ordinary shares of GBP0.00037 each
in the capital of the Company at the issue price of 60 pence per
share in a Placing, Subscription and Open Offer for total proceeds
of GBP27 million (before expenses).
On 16 April 2021, the Company issued 467,733 new ordinary shares
upon the exercise of share warrants with an exercise price of
GBP0.00037 each.
On 17 May 2021, the Company issued 40,080 new ordinary shares
upon the exercise of share warrants with an exercise price of
GBP0.00037 each.
On 23 November 2021, the Company issued 66,800 new ordinary
shares upon the exercise of share options with an exercise price of
GBP0.025358 each.
On 9 December 2021, the Company issued 110,000 new ordinary
shares upon the exercise of share options with an exercise price of
GBP0.15 each.
On 11 January 2022, the Company issued a total of 133,600 new
ordinary shares upon the exercise of share options with an exercise
price of GBP0.02478 each.
On 11 January 2022, the Company issued a total of 132,630 new
ordinary shares upon the exercise of share options with an exercise
price of GBP0.15 each.
On 01 February 2022, the Company issued a total of 109,356 new
ordinary shares upon the exercise of share options with an exercise
price of GBP0.15 each.
On 05 April 2022, the Company issued a total of 2,057,440 new
ordinary shares upon the exercise of share options with an exercise
price of GBP0.00313 each.
On 05 April 2022, the Company issued a total of 93,520 new
ordinary shares upon the exercise of share options with an exercise
price of GBP0.02571 each.
On 06 April 2022, the Company issued a total of 267,200 new
ordinary shares upon the exercise of share options with an exercise
price of GBP0.00314 each.
On 20 April 2022, the Company issued a total of 260,169 new
ordinary shares upon the exercise of share options with an exercise
price of GBP0.15 each.
On 20 April 2022, the Company issued a total of 136,109 new
ordinary shares upon the exercise of share options with an exercise
price of GBP0.23 each.
On 22 July 2022, the Company issued a total of 534,400 new
ordinary shares upon the exercise of share options with an exercise
price of GBP0.15 each.
On 27 July 2022, the Company issued a total of 73,119 new
ordinary shares upon the exercise of share options with an exercise
price of GBP0.15 each.
18. Reserves
Share premium
Share premium represents the excess of subscription amounts for
the issue of shares over nominal value of shares issued, less any
attributable share issue costs.
Group re-organisation reserve
The group re-organisation reserve arose on the transaction under
which the Group acquired the Subsidiary by way of a group
re-organisation.
Share based payment reserve
Cumulative fair value of options charged to the consolidated
income statement net of transfers to the profit or loss reserve on
exercised.
Accumulated losses
Includes all current and prior year retained profits and
losses.
Merger reserve
The balance on the merger reserve represents the fair value of
the consideration given in excess of the nominal value of the
ordinary shares issued in an acquisition made by the issue of
shares where the transaction qualifies for merger relief under the
Companies Act 2006.
19. Share-based payments
Share options
The Company grants share options at its discretion to Directors,
management and employees. These are accounted for as equity settled
transactions. Should the options remain unexercised after a period
of ten years from the date of grant the options will expire unless
an extension is agreed to by the board. Options are exercisable at
a price equal to the Company's quoted market price on the date of
grant or an exercise price to be determined by the board.
Details of share options granted, exercised, lapsed and
outstanding at the year-end are as follows:
Weighted Weighted
average average
exercise exercise
price (US$) price (US$)
2022 Number 2021
Number of share
of share
options
2022
options
2021
Outstanding at beginning
of year 24,443,312 0.50 16,884,322 0.19
Granted during the
year 1,941,000 0.71 8,580,000 1.11
Exercised during the
year (3,797,543) 0.07 (176,800) 0.14
Forfeited/lapsed during
the year (3,202,198) 0.99 (844,210) 1.01
Outstanding at end
of the year 19,384,571 0.51 24,443,312 0.50
----------- ------------ ----------- ------------
Exercisable at end
of the year 13,751,273 0.34 13,055,517 0.14
----------- ------------ ----------- ------------
Date Granted No. of options Exercise Vesting conditions
price
08 March 2022 70,000 52 pence Time-based(1)
13 April 2022 500,000 55 pence Time-based(1)
04 May 2022 500,000 52 pence Time-based(1)
23 June 2022 246,000 48 pence Time-based(1)
25 August 2022 573,000 61 pence Time-based(1)
20 October 2022 52,000 49 pence Time-based(1)
---------------
1,941,000
---------------
(1) 25% of the options shall vest on the one-year anniversary of
the employee's date of hire with the remaining 75% vesting in equal
portions over the 36 months following the one-year anniversary of
the employee's date of hire.
The options outstanding as at 31 December 2022 have an exercise
price in the range of US$0.0041 to US$1.19 (2021: US$0.0041 to
US$1.19).
The fair value of options granted during the year has been
calculated using the Black Scholes model which has given rise to
fair values per share of between US$0.23 and US$0.47. This is based
on risk-free rates of between 1.8% and 3.9%, volatility of between
58% and 80% and expected life of 4 years.
The Black Scholes calculations for the options resulted in a
charge of US$1,205,247 (2021: US$1,814,882) which has been expensed
in the year. The weighted average remaining contractual life of the
share options is 6.37 years (2021: 6.85 years). The weighted
average share price at the date of exercise for all share options
exercised during the period was US$0.75 (2021: $0.58). All share
options are equity settled on exercise.
Share warrants
The Company grants share warrants at its discretion to
Directors, management, employees, advisors and lenders. These are
accounted for as equity settled transactions. Terms of warrants
vary from agreement to agreement.
Details for the warrants granted, exercised, lapsed and
outstanding at the year-end are as follows:
Weighted Weighted
average average
exercise exercise
price (US$) price (US$)
2022 Number 2021
Number of share
of share
options
2022
options
2021
Outstanding at beginning
of year 3,054,129 0.01 3,994,165 0.09
Exercised during the
year - - (928,089) 0.34
Forfeited/lapsed during
the year - - (11,947) 0.34
Outstanding at end
of the year 3,054,129 0.01 3,054,129 0.01
---------- ------------ ----------- ------------
Exercisable at end
of the year 3,054,129 0.01 3.054,129 0.01
---------- ------------ ----------- ------------
The weighted average remaining contractual life of the share
warrants is 1.55 years (2021: 2.55 years). The weighted average
share price at the date of exercise for all share warrants
exercised during the period was US$nil (2021: US$0.68).
20. Provision for contingent consideration
Group Company
2022 2021 2022 2021
US$ US$ US$ US$
Provision for contingent
consideration 316,000 316,000 - -
----------- ----------- ------------ ------------
On 19 December 2011, the Subsidiary entered into an agreement
with a third party to purchase various assets, including patents,
trademarks, a license agreement and physical inventory. As
consideration for this transaction, the Subsidiary agreed to pay 5
per cent. of gross revenue on clinical sales of products that are
sold related to the patents purchased, for seven years from the
date of the commercial sale. As of 31 December 2022, the fair value
of this contingent consideration was US$316,000 (2021: US$316,000).
This liability is valued based on a probability weighted expected
return method using projected future cash flows. There were no
significant events in the year ended 31 December 2022 necessitating
revision of the probability weighted expected value of the
contingent consideration.
There was therefore US$Nil profit or loss arising on revaluation
of contingent consideration during the year ended 31 December 2022
(2021: US$Nil).
21. Deferred income
Group Company
2022 2021 2022 2021
US$ US$ US$ US$
Arising from service
contracts
Balance brought forward 254,741 260,717 - -
Additions 69,809 77,603
Revenue taken in
year (106,121) (83,579) - -
------------ ---------- ------------ ------------
Balance carried forward 218,429 254,741 - -
------------ ---------- ------------ ------------
Current 89,725 108,994 - -
Non-current 128,704 145,747 - -
------------ ---------- ------------ ------------
218,429 254,741 - -
------------ ---------- ------------ ------------
22. Trade and other payables
Group Company
Amounts falling 2022 2021 2022 2021
due within one year US$ US$ US$ US$
Trade payables 597,363 405,953 45,861 40,887
Accruals and other
payables 1,381,638 1,325,161 114,767 65,129
----------- ----------- ------------ ------------
1,979,001 1,731,114 160,628 106,016
=========== =========== ============ ============
Group Company
Amounts falling 2022 2021 2022 2021
due after one year US$ US$ US$ US$
Accruals and other 360,000 - - -
payables
============== ======== ============ ============
Trade payables principally comprise amounts outstanding for
trade purchases and ongoing costs and are payable within 1
year.
The Directors consider the carrying value of all financial
liabilities to be equivalent to their fair value.
23. Changes in liabilities from financing activities
Group
1 January Non-cash 31 December
2021 Cash flows changes 2021
US$ US$ US$ US$
Lease liability 221,428 (143,170) 411,528 489,786
--------- ---------- --------- -----------
Total liabilities
from financing activities 221,428 (143,170) 411,528 489,786
--------- ---------- --------- -----------
1 January Non-cash 31 December
2022 Cash flows changes 2022
US$ US$ US$ US$
Lease liability 489,786 (154,710) 23,761 358,837
--------- ---------- --------- -----------
Total liabilities
from financing activities 489,786 (154,710) 23,761 358,837
--------- ---------- --------- -----------
24. Leases
Nature of leasing activities
The group leases properties in the jurisdiction in which it
operates with all lease payments fixed over the lease term.
2022 2021
No. No.
Number of active leases 2 2
----- -----
The Group discounts the lease payments using its incremental
borrowing rate at the commencement date of the lease. The
weighted-average rate applied is 10%.
Right-of-use assets
Land and
Buildings
US$
At 1 January 2021 184,213
Additions 378,767
Amortisation expense (140,164)
At 31 December 2021 422,816
-----------
At 1 January 2022 422,816
Amortisation expense (148,528)
At 31 December 2022 274,288
-----------
Lease Liabilities
Land and
Buildings
US$
-----------
At 1 January 2021 221,428
Additions 390,427
Interest expense 21,101
Lease payments (143,170)
-----------
At 31 December 2021 489,786
-----------
At 1 January 2022 489,786
Interest expense 23,761
Lease payments (154,710)
-----------
At 31 December 2022 358,837
-----------
Analysis of lease liabilities
Maturity of the lease liabilities is analysed as follows:
2022 2021
US$ US$
Within 1 year 142,146 130,949
Later than 1 year and less than 5 years 216,691 358,837
-------- --------
358,837 489,786
-------- --------
25. Commitments
Royalty commitments
The Subsidiary has entered into three agreements requiring
royalty payments. One agreement is conditional and requires a
payment of 5 per cent. of gross revenue on clinical sales during
the payment period beginning on the date a product is first
commercially sold, contingent on receiving FDA approval, and ending
seven years from that date. A separate agreement requires payments
of 0.25 per cent of net sales of machines, and 20 per cent of any
sublicensing income for a specific method of use of patent
beginning in 2016. Additionally, beginning five years after the
effective date of 1 February 2021, there are minimum yearly
royalties of US$5,000. The third agreement requires a fixed payment
of US$250,000 for use of patents.
26. Financial instruments
The Group has exposure to the following key risks related to
financial instruments:
I. Market risk
II. Credit risk
III. Liquidity risk
This note presents information about the Group's exposure to
each of the above risks, the Group's objectives, policies and
processes for measuring and managing risk, and the Group's
management of capital. Further quantitative disclosures are
included throughout these consolidated Financial Statements.
The Group uses financial instruments including cash, loans, as
well as trade receivables and payables that arise directly from
operations.
Due to the simple nature of these financial instruments, there
is no material difference between book and fair values, discounting
would not give a material difference to the results of the Group
and the Directors believe that there are no material sensitivities
that require additional disclosure.
(a) Credit risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Subsidiary. In order to minimise the risk, the Subsidiary
endeavours only to deal with companies which are demonstrably
creditworthy and this, together with the aggregate financial
exposure, is continuously monitored. The maximum exposure to credit
risk is the value of the outstanding amount. The Group considers
the banks and financial institutions have low credit risks.
Therefore, the Group is of the view that the loss allowance is
immaterial and hence no provision is required.
The Directors do not consider that there is any concentration of
risk within either trade or other receivables. There are no
impairments to trade or other receivables in each of the years
presented.
Categories of financial instruments
Group Company
Financial assets 2022 2021 2022 2021
at measured at amortised US$ US$ US$ US$
cost
Cash and cash equivalents 16,454,241 28,874,908 1,716,189 2,454,491
Trade and other receivables
- current 109,397 119,096 - -
Other receivables
- non-current 5,539 5,539 - -
----------- ----------- ------------ ------------
Financial liabilities
at measured at amortised
cost
Trade and other payables- 360,000 - - -
current
Other payables - non-current 1,979,001 1,731,114 160,629 106,016
----------- ----------- ------------ ------------
Capital risk management
The Group manages its capital to ensure that it will be able to
continue as a going concern while maximising returns to
shareholders through the optimisation of capital structure. The
Group is funded by equity. Equity comprises share capital, share
premium, share-based payment reserves, group re-org reserves and
accumulated losses and is presented in the statement of financial
position. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders or issue new shares.
The Group manages the capital structure and makes adjustments to
it in the light of changes to economic conditions and risks.
(b) Market risk
There is no interest risk exposure to the group or the company.
The Company made unsecured interest-free loans to its subsidiary
and are expected to be repaid in the future as the subsidiary is
revenue generative.
(c) Liquidity risk
A maturity analysis of the Group's financial liabilities is
shown below:
2022 Carrying Undiscounted Less than 1-2 years 2-5 years
amounts cash flow a year
Trade and other
payables 2,339,001 2,339,001 1,979,001 240,000 120,000
Lease liabilities 358,837 384,435 158,135 150,248 76,052
---------- ------------- ---------- ---------- ----------
2,697,838 2,723,436 2,137,136 510,248 76,052
========== ============= ========== ========== ==========
2021
Trade and other
payables 1,731,114 1,731,114 1,731,114 - -
Lease liabilities 489,786 539,145 154,710 158,135 226,300
---------- ------------- ---------- ---------- ----------
2,220,900 2,270,259 1,885,824 158,135 226,300
========== ============= ========== ========== ==========
Capital risk management
As highlighted earlier in these financial statements, the
presentation currency of the Group is the US dollar. The Group has
foreign currency denominated assets and liabilities. Exposure to
exchange rate fluctuations therefore arises. The Group pays for
invoices denominated in a foreign currency in the same currency as
the invoice and therefore suffers from a level of foreign currency
risk, but this is immaterial. The Group did not enter into any
derivative financial instruments to manage its exposure to foreign
currency risk in the year.
The carrying amount of the Group's foreign currency denominated
monetary assets and liabilities at 31 December 2022 is as
follows:
2022 2021
USD $ USD $
British pound
sterling
Cash balances 1,716,189 2,454,491
========== ----------
1,716,189 2,454,491
========== ==========
At 31 December 2022, if all foreign currencies in which the
Group transacts had strengthened or weakened by 10% against the US
dollar with all other variables held constant, post-tax loss for
the would have been increased/(decreased) by:
2022 2021
US$ US$
Strengthened by 10% - increase in post-tax
loss 171,619 245,449
Weakened by 10% - decrease in post-tax loss (171,619) (245,449)
The rate of 10% is the sensitivity rate used when reporting
foreign currency risk internally to key management personnel and
represents management's assessment of the reasonable possible
change in foreign exchange rates. The sensitivity analysis includes
only outstanding foreign currency denominated monetary items and
adjusts their translation at year-end for a 10% change in foreign
currency rates. A positive number above indicates an increase in
loss (increase in profit) or other equity where the US$ strengthens
by 10% against the relevant currency. For a 10% weakening of the
US$ against the relevant currency, there would be an equal and
opposite impact on the profit or loss and other equity.
27. Contingent liabilities
The Directors are not aware of any material contingent
liabilities, except for the contingent consideration detailed in
note 20.
28. Related party transactions
Remuneration of the key management personnel has been disclosed
in Note 5.
29. Events after the reporting period
Between 1 January 2023 and 20 April 2023, the Company granted
options over a total of 325,000 ordinary shares of GBP0.00037 each
in the capital of the Company to three new employees. The options
vest over a four-year period and have an exercise price equal to
the closing price on the date of grant.
On 17 April 2023, the Company announced the appointment of
Daniel Brague, a Non-Executive Director of the Company, as a
consultant to the Company to provide strategic advice to the
Company's commercial team. Under the terms of the consultancy
contract, the Company will pay Mr. Brague an hourly fee of $300.
The fee is capped at $100,000 in total.
Notice of the Annual General Meeting
POLAREAN IMAGING PLC
(Incorporated in England and Wales under the Companies Act 2006
with company number 10442853)
NOTICE OF ANNUAL GENERAL MEETING
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE
ATTENTION
If you are in any doubt as to what action you should take, you
are recommended to seek your own financial advice from your
stockbroker or other independent adviser authorised under the
Financial Services and Markets Act 2000.
If you have recently sold or transferred all of your shares in
Polarean Imaging plc, please forward this document, together with
the accompanying documents, as soon as possible either to the
purchaser or transferee or to the person who arranged the sale or
transfer so they can pass these documents to the person who now
holds the shares.
It is intended that the Annual General Meeting (the "AGM") of
Polarean Imaging plc (the "Company") will be held at the Company's
office at 2500 Meridian Parkway, Suite 175, Durham, NC 27713 USA at
2:00 p.m. BST (9:00 a.m. EST) on 28 June 2023. The Company
understand and recognises the importance of the AGM and the Board
greatly values the opportunity to meet shareholders in person.
However, we understand that this may not be possible or desirable
for all whom wish to attend, therefore, the Company will offer
shareholders the option to participate in the AGM remotely via a
Zoom conference call. If you wish to use this facility, please
contact the Company' investors relations firm, Walbrook Public
Relations, by emailing polarean@walbrookpr.com who will provide
further information. However, shareholders will not be able to vote
at the meeting when joining via the Zoom conference call.
Shareholders are therefore asked, whether or not they propose to
attend the AGM, to exercise their votes and appoint the Chairman of
the AGM as their proxy by completing the form of proxy sent to them
with this document and return it to the Company's registrars as
soon as possible. They must receive it by 2:00 p.m. BST (9:00 a.m.
EST) on 26 June 2023 (or, in circumstances where the AGM is
adjourned to a date later than 48 hours after the time specified
for the Meeting, 48 hours before the time of the adjourned meeting,
excluding any UK non-working days).
NOTICE IS HEREBY GIVEN that the Annual General Meeting of
Polarean Imaging plc (the "Company") will be held at the Company's
office at 2500 Meridian Parkway, Suite 175, Durham, NC 27713 USA at
2:00 p.m. BST (9:00 a.m. EST) on 28 June 2023 for the purpose of
considering and, if thought fit, transacting the following
business:
ORDINARY BUSINESS
To consider and, if thought fit, pass the following resolutions
which will be proposed as ordinary resolutions:
1. To receive and consider the Company's audited accounts for
the year ended 31 December 2022 and the Directors' of the Company
(the "Director(s)") and auditors' reports thereon.
2. To consider and approve the remuneration report as detailed
in the Company's annual report and accounts.
3. To re-appoint Crowe UK LLP as auditor of the Company (the
"Auditor") to hold office until the conclusion of the next general
meeting at which accounts are laid and to authorise the Directors
to fix the Auditor's remuneration.
4. To re-elect Marcella Ruddy as a Director, who retires in
accordance with article 78 of the Articles, and who, being
eligible, offers herself for re-election.
5. To re-elect Juergen Laucht as a Director, who retires in
accordance with article 78 of the Articles, and who, being
eligible, offers himself for re-election.
6. To re-elect Cyrille Petit as a Director, who retires in
accordance with article 83 of the Articles, and who, being
eligible, offers himself for re-election.
7. To approve the amendments to the rules of the Polarean
Imaging plc Share Option Plan (the "Plan") as further described on
page 19 of the Annual Report and to authorise the Directors to do
all such other acts and things they may consider appropriate to
implement the amended plan.
8. To generally and unconditionally authorise the Directors for
the purpose of section 551 of the Companies Act 2006 (the "Act"),
in substitution for all existing authorities to the extent unused,
to exercise all the powers of the Company to allot or grant rights
to subscribe for or to convert any security into shares in the
Company:
a) up to 10,000,000 ordinary shares of GBP0.00037 each
("Ordinary Shares") in respect of the Plan; and
b) otherwise than pursuant to paragraph (a) above, up to
31,957,126 Ordinary Shares (being 15 per cent. of the total number
of Ordinary Shares in issue as at the date of this notice),
provided that this authority shall expire on the earlier of 15
months after the date of passing of this resolution or the
conclusion of the annual general meeting of the Company next
following the passing of this resolution, save that the Company
may, before such expiry, make an offer or agreement which would or
might require shares or equity securities, as the case may be, to
be allotted or such rights granted after such expiry and the
Directors may allot shares or equity securities or grant such
rights, as the case may be, in pursuance of such offer or agreement
notwithstanding that the authority conferred by this resolution has
expired.
SPECIAL BUSINESS
To consider and, if thought fit, pass the following resolution
as a special resolution:
9. Subject to the passing of resolution 8 above, to empower the
Directors, pursuant to the general authority conferred on them and
section 570 of the Act, to allot equity securities (within the
meaning of section 560 of the Act) for cash as if section 561 of
the Act did not apply to any such allotment, provided that this
power shall be limited to the allotment of equity securities:
a) made in connection with an offer of securities, open for
acceptance for a fixed period, to holders of Ordinary Shares of the
Company on the register on a fixed record date in proportion (as
nearly as may be) to their then holdings of such Ordinary Shares
(but subject to such exclusions or other arrangements as the
Directors may deem necessary or expedient to deal with any legal or
practical problems under the laws or requirements of any recognised
regulatory body or any stock exchange in any overseas territory or
in connection with fractional entitlements); and/or
b) wholly for cash (otherwise than pursuant to paragraph 9(a)
above) up to an aggregate number of 31,957,126 Ordinary Shares.
This authority shall expire on the earlier of 15 months after
the date of passing of this resolution and the conclusion of the
annual general meeting of the Company next following the passing of
this resolution but the Company may, before such expiry, make an
offer or agreement which would or might require shares or equity
securities, as the case may be, to be allotted or such rights
granted after such expiry and the Directors may allot shares or
equity securities or grant such rights, as the case may be, in
pursuance of such an offer or agreement notwithstanding that the
power conferred by this resolution has expired.
By Order of the Board
Stephen Austin Registered Office:
Company Secretary 27-28 Eastcastle Street
25 May 2023 London
W1Q 8DH
NOTES
A shareholder entitled to attend and vote at the meeting
convened by this notice is entitled to appoint one or more proxies
to exercise all or any of their rights to attend, speak and vote on
their behalf at the AGM. A proxy need not be a shareholder.
(1) Arrangements for the meeting
Shareholders who wish to attend the AGM in person should arrive
at the venue in good time to allow their attendance to be
registered. Shareholders who wish to participate in the meeting
remotely via the Zoom conference call should contact the Company's
investor relations firm, Walbrook Public Relations, by emailing
polarean@walbrookpr.com who will provide further information.
However, Shareholders will not be able to vote at the meeting when
joining via the Zoom conference call. The Board:
-- encourages Shareholders to submit their votes by proxy as
early as possible, and Shareholders are encouraged to appoint the
Chairman of the meeting as their proxy. All proxy appointments
should be received by no later than 2:00 p.m. BST on 26 June
2023;
-- strongly recommends CREST members to vote electronically
through the CREST electronic proxy appointment service as your vote
will automatically be counted. In addition, the Company has also
decided that proxy appointments can also be submitted by
Shareholders electronically (even outside CREST) by logging on to
www.shareregistrars.uk.com, clicking on the "Proxy Vote" button and
then following the on-screen instructions (you can locate your
log-in details on the top of the proxy form). Please contact Share
Registrars Limited contact number on +44 (0) 1252 821390 for any
further guidance. Dealing with paper proxies requires physical
interaction such as post sorting and delivery, evaluation and
manual input.
-- proposes that voting at the meeting will be conducted by
means of a poll on all resolutions, with each Shareholder having
one vote for each share held, thereby allowing all those proxy
votes submitted and received prior to the meeting to be counted;
and
-- encourages you to submit any question that you would like to
be answered at the meeting by sending it, together with your name
as shown on the Company's register of members and the number of
shares held, to the following email address:
polarean@walbrookpr.com so that it is received by no later than
2:00 p.m. BST on 26 June 2023. Please insert "AGM - Shareholder
Questions" in the subject header box of your email. The Company
will endeavour to respond to all questions received from
Shareholders at the AGM or within seven days following the AGM.
(2) To appoint a proxy, shareholders should use the form of
proxy enclosed with this notice of AGM. Please carefully read the
instructions on how to complete the form of proxy. For a proxy to
be effective, the instrument appointing a proxy together with the
power of attorney or such other authority (if any) under which it
is signed or a notarised certified copy of the same must be
deposited with the Company's registrars, Share Registrars Limited
of 3 The Millennium Centre, Crosby Way, Farnham, Surrey, GU9 7XX,
United Kingdom (the "Registrars") or shareholders can submit their
vote(s) by logging on to www.shareregistrars.uk.com, clicking on
the "Proxy Vote" button and then following the on-screen
instructions (you can locate your log-in details on the top of the
proxy form) by 2:00 p.m. BST on 26 June 2023, or, if the AGM is
adjourned, 48 hours before the time fixed for the adjourned meeting
(excluding any part of a day that is not a business day). The
completion and return of a form of proxy does not preclude a
shareholder from subsequently attending and voting at the AGM in
person if he or she so wishes. If a shareholder has appointed a
proxy and attends the AGM in person, such proxy appointment will
automatically be terminated.
(3) Pursuant to Regulation 41 of Uncertificated Securities
Regulations 2001, the Company specifies that only those
shareholders on the register of members at 2:00 p.m. BST on 26 June
2023 or, if the meeting is adjourned, 48 hours before the time of
the adjourned meeting (excluding any part of a day that is not a
business day), shall be entitled to attend or vote at the AGM in
respect of the number of ordinary shares of GBP0.00037 each (the
"Ordinary Shares") registered in their name at that time. Changes
to the register of members after that time shall be disregarded in
determining the rights of any person to attend or vote at the
AGM.
(4) Any Shareholder may insert the full name of a proxy or the
full names of two alternative proxies of the Shareholder's choice
in the space provided with or without deleting 'the Chairman of the
meeting.' A proxy need not be a Shareholder but must attend the
meeting to represent the relevant Shareholder. The person whose
name appears first on the Form of Proxy and has not been deleted
will be entitled to act as proxy to the exclusion of those whose
names follow. If this proxy form is signed and returned with no
name inserted in the space provided for that purpose, the Chairman
of the meeting will be deemed to be the appointed proxy. Where a
Shareholder appoints as his/her proxy someone other than the
Chairman, the relevant Shareholder is responsible for ensuring that
the proxy attends the meeting and is aware of the Shareholder's
voting intentions. Any alteration, deletion or correction made in
the Form of Proxy must be initialled by the signatory/ies.
(5) A shareholder may appoint more than one proxy provided that
each proxy is appointed to exercise the rights attached to a
different Ordinary Share or Ordinary Shares held by that
shareholder. A shareholder may not appoint more than one proxy to
exercise rights attached to any one Ordinary Share. If a
shareholder wishes to appoint more than one proxy, they should
contact the Registrars on 01252 821390, +44 1252 821390 from
overseas. Lines are open from 9.00 a.m. to 5.00 p.m. Monday to
Friday, excluding public holidays. Alternatively, you may write to
the Registrars at Share Registrars Limited, 3 The Millennium
Centre, Crosby Way, Farnham, Surrey, GU9 7XX, United Kingdom for
additional proxy forms and for assistance.
(6) Any corporation which is a shareholder can appoint one or
more corporate representatives who may exercise on its behalf all
of its powers as a shareholder provided that they do not do so in
relation to the same Ordinary Share.
(7) As at the close of business on the date immediately
preceding this notice, the Company's issued share capital comprised
213,047,509 Ordinary Shares. Each Ordinary Share carries the right
to vote at the AGM and, therefore, the total number of voting
rights in the Company as at close of business on the date
immediately preceding this notice is 213,047,509.
(8) A shareholder's instructions to the proxy must be indicated
in the appropriate space provided. To abstain from voting on a
resolution, select the relevant 'Vote withheld' box. A vote
withheld is not a vote in law, which means that the vote will not
be counted in the calculation of votes for or against the
resolution. If no voting indication is given, your proxy will vote
or abstain from voting at his or her discretion. Your proxy will
vote (or abstain from voting) as he or she thinks fit in relation
to any other matter which is put before the meeting.
(9) This form of proxy must be signed by the appointor, or his
attorney duly authorised in writing. The power of attorney or other
authority (if any) under which the form of proxy is signed, or a
notarised certified copy of the power or authority, must be
received by the Registrars with the form of proxy. If the appointor
is a corporation, the form of proxy should be signed on its behalf
by an attorney or duly authorised officer or executed as a deed or
executed under common seal. In the case of joint holders, the
signature of any one of them will suffice, but the names of all
joint holders should be stated.
(10) CREST members who wish to appoint a proxy or proxies
through the CREST Electronic Proxy Appointment Service may do so
for the AGM to be held at 2:00 p.m. BST on 28 June 2023 and any
adjournment(s) thereof by following the procedures described in the
CREST manual. All messages relating to the appointment of a proxy
or an instruction to a previously appointed proxy, which are to be
transmitted through CREST, must be received by the Registrars (ID
7RA36) no later than 2:00 p.m. BST on 26 June 2023, or, if the AGM
is adjourned, 48 hours before the time fixed for the adjourned
meeting (excluding any part of a day that is not a business
day).
(11) In order to revoke a proxy instruction, you will need to
inform the Company by sending a signed hard copy notice clearly
stating your intention to revoke your proxy appointment to the
Registrars. In the case of a shareholder which is a company, the
revocation notice must be executed in accordance with note 12
below. Any power of attorney or any other authority under which the
revocation notice is signed (or a duly certified copy of such power
or authority) must be included with the revocation notice and must
be received by the Registrars not less than 48 hours (excluding any
part of a day that is not a business day) before the time fixed for
the holding of the AGM or any adjourned meeting (or in the case of
a poll before the time appointed for taking the poll) at which the
proxy is to attend, speak and to vote. If you attempt to revoke
your proxy appointment but the revocation is received after the
time specified then, subject to the paragraph directly below, your
proxy appointment will remain valid.
(12) A corporation's form of proxy must be executed under either
its common seal, if any, or under the hand of a duly authorised
officer or attorney, in each case as required under the laws of its
relevant jurisdiction.
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END
FR SEMESIEDSEEI
(END) Dow Jones Newswires
May 26, 2023 02:00 ET (06:00 GMT)
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