TIDMOKYO
RNS Number : 0601V
OKYO Pharma Limited
29 November 2019
OKYO Pharma Limited
Interim results for the six months to 30 September 2019
OKYO Pharma Limited (LSE:OKYO) (the "Company") is pleased to
announce unaudited interim results for the six months to 30
September 2019.
Financial Highlights:
-- Total assets decreased to GBP0.5 million (30 March 2019: GBP0.6 million)
-- Cash on hand of GBP0.05 million (30 March 2019: GBP0.5 million)
-- Operational expenses continue to be rigorously controlled at all levels
-- During the financial period under review, the Company
reported a total comprehensive loss of GBP0.9 million (30 March
2019: GBP3.8 million).
Company Focus:
Company's focus is to develop drugs for inflammatory dry eye
diseases and chronic pain by targeting G protein-coupled receptors
(GPCRs). GPCRs is the largest family of membrane proteins involved
in many biological processes. Targeting GPCR is proven to be an
innovative approach for treatment of a wide range of conditions
including cardiovascular disease, cancer and diabetes.
Approximately 1/3 of all Food and Drug Administration (FDA)
approved drugs target members of this family.
Chemerin Project:
The chemerin receptor (CMKLR1 or ChemR23) is a chemokine like G
protein-coupled receptor (GPCR) expressed on select populations of
cells including inflammatory mediators as well as epithelial cells.
Chemerin acts as a ligand for Chem23 receptor and activates
proinflammatory pathways through GPCR signaling. Inflammation is
the most common underlying cause of dry eye disease (DED).
Therefore, anti-inflammatory treatment is important in improving
dry eye symptoms. A 15-aa peptide derived from chemerin (Chem-15)
exhibited potent anti-inflammatory properties in in vitro and in
vivo models of inflammation that are mediated through ChemR23. OKYO
is developing novel chemerin derived peptides for dry eye
treatment.
A proprietary GPCR agonist of Chem23 (OK-113), which was
discovered in-house, showed potent anti-inflammatory activity in an
experimental model of DED in mice. Topical treatment, as eye drops,
with OK-113 reduced corneal permeability and other symptoms of dry
eye in a mouse model of DED. OK-113 is currently being evaluated
for safety and toxicity in a rabbit model. The demonstration of
potent anti-inflammatory activity in the mouse model of DED and the
results exhibiting absence of local irritation in a rabbit model
will be important basis for the initiation of the upcoming
IND-enabling studies, and subsequently to IND submission of
Chemerin for DED indication. Anticipated IND-submission date for
Chemerin is March 2021.
BAM8 Project:
Human Mas-Related G Protein-coupled Receptor (MRGPR) is a
promising target for blocking pain since it is mainly expressed in
nociceptors within the peripheral nervous system. Bovine Adrenal
Medulla 8-22 (BAM8-22), a 15 amino acid endogenous peptide, is an
agonist of human MRGPRX1. BAM8-22 does not contain the
met-enkephalin motif; therefore, it displays no affinity for opioid
receptors. MRGPR knock out mice studies suggested that BAM8-22
blocks both inflammatory and neuropathic pain in mice after nerve
injury suggesting that agonists for MRGPR may represent a class of
non-opioid analgesics for treating chronic pain with minimal side
effects because of the highly specific expression of these
receptors.
On 2(nd) February 2018, the company obtained the licence
agreement from Tufts Medical Center of the right to exploit all the
intellectual property claimed in patent application
PCT/US2016/0611101 'Lipidated BAM8 and methods of using same' being
claims in composition of matter and methodology for treating
symptoms of neuropathic chronic pain, ocular pain and uveitis
associated pain. OKYO has identified novel Bam8-22 analogs that
have potential to ameliorate inflammation and neuropathic pain.
A collaborative agreement was signed with Pedram Hamrah, MD,
Professor of Ophthalmology at Tufts University School of Medicine,
Boston, MA on August 6, 2019 to evaluate OKYO's proprietary lead
compounds as non-opioid analgesics to suppress corneal neuropathic
pain using a mouse ocular pain model recently developed in Dr.
Hamrah's laboratory. These collaborative studies will provide
additional 'Proof-of-Concept' results for the Bam8-22 analogs as
potential non-opioid analgesics.
Enquiries:
OKYO Pharma Limited Willy Simon +44 (0)20 7495 2379
Antonio Bossi
Shore Capital (Broker) Fiona Conroy +44 (0)20 7408 4050
About OKYO
OKYO Pharma Limited (LSE: OKYO) is a life sciences and
biotechnology company admitted to listing on the standard segment
of the Official List of the UK Financial Conduct Authority and to
trading on the Main Market for listed securities of the London
Stock Exchange plc. OKYO is focusing on the discovery and
development of novel molecules to treat inflammatory dry eye
diseases and chronic pain.
Website: www.okyopharma.com
OKYO Pharma Limited
Chairman's statement
Dear Shareholders,
I am pleased to report on the Group's financial results for the
six months ended 30 September 2019.
Results to 30 September 2019
During the financial period under review, the Company reported a
total comprehensive loss of GBP0.89 million (30 September 2018:
GBP1.19 million).
The Company's shareholders' loss at 30 September 2019 stood at
GBP0.2 million (30 September 2018: equity of GBP1.1 million), due
to expenses incurred during the period.
Cash was GBP54,647 at the end of the period (30 September 2018:
GBP1.2 million).
Total number of shares in issue as at September 30, 2019 was
560,471,918. 36,363,636 new shares were issued during the year.
Fund raising
During the six months to 30 September, 2019, OKYO raised
GBP400,000 in funds, the funds were raised to (i) complete of the
IND-enabling studies in order for the Company to make the IND
submission for the Chemerin technology by the first quarter of
2020, and (ii) to cover the associated costs relating to the
estimated completion of the pre-clinical studies of BAM-8, which
would provide a basis for further IND enabling studies.
The Company is currently active on a fundraising through private
placement aiming to raise enough funds to support the working
capital expenditure for the next 12 months.
Operations in Review
Chemerin Project
On 28 August 2019, the Company announced potent
anti-inflammatory activity of OK-113, an in-house discovered
proprietary agonist of Chemerin GPCR, in an experimental model of
dry eye disease ("DED") in mice. These preclinical efficacy data,
identifying a lead drug candidate, will facilitate initiation of
clinical studies for DED treatment in 2020.
Targeting GPCR, a 'Nobel Prize' winning scientific concept, is
proven to be an innovative approach for treatment of a wide range
of inflammatory diseases, cancers and non-opioid analgesics for
management of chronic pain. More than 40% of the drugs available in
the global market target GPCR.
Topical treatment, as eye drops, with OK-113 showed potent
anti-inflammatory effects to reduce corneal permeability and other
symptoms of dry eye in a mouse model of DED. In these studies,
OK-113 was as potent as cyclosporine, an immunosuppressive drug
which is the active ingredient of Restasis(R) (Allergan).
The demonstration of potent anti-inflammatory activity in the
mouse model of DED and the results exhibiting absence of local
irritation in a rabbit model are important bases for initiation of
the upcoming IND-enabling studies, and subsequently to IND
submission for DED treatment.
BAM8 Project
On 19 August 2019, the company announced a collaborative
agreement with Pedram Hamrah, MD, Ophthalmology Scientist and
Cornea Specialist at Tufts Medical Center, and Professor of
Ophthalmology at Tufts University School of Medicine, Boston, MA,
to evaluate proprietary lead compounds, targeting G-protein coupled
receptors ("GPCRs"), as non-opioid analgesics.
Based on preclinical research, the Company have identified novel
Bovine Adrenal Medulla ("Bam8") analogs that have potential to
ameliorate inflammation and neuropathic pain. The research
collaboration with Dr. Hamrah is focused on evaluation of lead
compounds as non-opioid analgesics to suppress corneal neuropathic
pain using a mouse ocular pain model recently developed in Dr.
Hamrah's laboratory at Tufts Medical Center, Boston. Dr. Hamrah is
a prominent key opinion leader in Ocular Immunology, Inflammation
and Ocular Pain.
Dr. Hamrah is a prominent key opinion leader in Ocular
Immunology, Inflammation and Ocular Pain. Recently, he was featured
in The Wall Street Journal article on 'When Routine Eye Surgery
Leads to Debilitating
Pain'.(https://www.wsj.com/articles/when-routine-eye-surgery-leads-to-debilitating-pain-11562008367).
These collaborative studies will provide additional
'Proof-of-Concept' results for the Bam8 analogs as potential
non-opioid analgesics.
Summary
OKYO is focused on GPCR Technology Platform, a novel approach to
develop innovative therapies for inflammatory dry eye diseases and
chronic pain management. More than 40% of the drugs available in
the global market target GPCRs. Large market potential and growth
exists for GPCR targeted drugs for treating a wide variety of
indications such as inflammation, oncology, cardiovascular diseases
and inflammatory eye diseases including dry eye, uveitis and
allergic conjunctivitis.
As such it is the intention that the Company will work closely
with its retained clinicians with a view to generating incremental
value for its shareholders.
Willy Simon
Executive Chairman
29 November 2019
OKYO Pharma Limited
Consolidated statement of comprehensive income
for the six months ended 30 September 2019
Notes Six months Six months
ended ended
30 September 30 September
2019 2018 Year ended
31 March
(unaudited) (unaudited 2019
GBP GBP GBP
Continuing operations
Income - - -
Operating expenses
Research and development
costs (276,910) (162,905) (2,333,765)
Operating expenses (593,956) (1,011,861) (1,412,836)
Impairment and write offs 1 - - -
-------------- -------------- --------------
Total operating loss 5 (870,866) (1,174,766) (3,746,601)
Other losses (21) (18,013) (12,123)
-------------- -------------- --------------
Loss before income tax (870,887) (1,192,780) (3,758,724)
Taxation - - -
-------------- -------------- --------------
Loss for the year (870,887) (1,192,780) (3,758,724)
Other comprehensive (loss)/income
- foreign currency translation
reserve (14,541) (465) (895)
-------------- -------------- --------------
Total comprehensive loss for the
period (885,428) (1,193,245) (3,759,619)
Basic and diluted loss per
share 17 (0. 01) (0. 00) (0. 01)
OKYO Pharma Limited
Consolidated statement of financial position
As at 30 September 2019
Notes Six months
ended
30 September
2019 At At
31 March 31 March
(unaudited) 2019 2018
GBP GBP GBP
Property, plant and equipment 7 680 847 -
-------------- -------------- --------------
Total non-current assets 680 847 -
-------------- -------------- --------------
Cash and cash equivalents 54,647 481,153 2,007,844
Trade and other receivables 8 33,167 100,581 34
Related party receivable 11 413,219
-------------- -------------- --------------
Total current assets 501,033 581,734 2,007,878
-------------- -------------- --------------
Total assets 501,713 582,581 2,007,878
Equity
Share premium 6 68,803,220 68,403,220 66,368,028
Share options reserves 10 59,085 38,744 -
Warrants reserve 10 74,662 24,281 -
Retained deficit (69,096,256) (68,210,828) (64,451,209)
-------------- -------------- --------------
Shareholders' equity (159,289) 255,417 1,916,819
-------------- -------------- --------------
Current Liabilities
Trade and other payables 9 659,065 327,164 91,059
Related party payable 11 1,937
-------------- -------------- --------------
Total liabilities 661,002 327,164 91,059
-------------- -------------- --------------
Total equity and liabilities 501,713 582,581 2,007,878
The notes on pages 10 to 19 form an integral part of these
financial statements
OKYO Pharma Limited
Consolidated statement of changes in equity
for the six months ending 30 September 2019 and 30 September
2018
Foreign
currency Total
Share Share options Warrants translation Retained shareholders'
(unaudited) Notes premium reserve reserve reserves deficit equity
GBP GBP GBP GBP GBP GBP
Balance at 1
April 2019 68,403,220 38,744 24,281 - (64,451,209) 1,916,819
Total
comprehensive
loss for the
period
Loss for the
period - - - - (885,428) (885,428)
Transactions
with owners,
recorded
directly in
equity
Contributions
by and
distributions
to owners
Shares issued 400,000 - - - - 400,000
Options charge 13 - 20,340 - - - 20,340
Warrants
charge - - 50,381 - - 50,381
-------------- -------------- -------------- -------------- ---------------- --------------
Balance at 30
September
2019 68,803,220 59,085 74,662 - (69,096,256) (159,289)
Balance at 1
April 2018 66,368,028 - - - (64,451,209) 1,916,819
Total
comprehensive
loss for the
period
Loss for the
period - - - - (1,192,780) (1,192,780)
Other
comprehensive
income for
the
period - - - - (465) (465)
Transactions
with owners,
recorded
directly in
equity
Contributions
by and
distributions
to owners
Options and
warrants
reserve
charge 13 - 368,682 - - - 368,682
-------------- -------------- -------------- -------------- ---------------- --------------
Balance at 30
September
2018 66,368,028 368,682 - - (65,644,454) 1,092,256
OKYO Pharma Limited
Consolidated statement of changes in equity
for the year ended 31 March 2019
Share Share options Share warrants Retained Total shareholders'
Notes premium reserve reserve deficit equity
GBP GBP GBP GBP GBP
Balance at 1 April
2018 66,368,028 - - (64,451,209) 1,916,819
Total
comprehensive loss
for the
period
Loss for the
period - - - (3,606,895) (3,606,895)
Transactions with
owners, recorded
directly in equity
Contributions by
and distributions
to owners
Shares issued 2,035,192 - - - 2,035,192
Options and
warrants charge 13 - 38,744 24,281 - 63,025
-------------- -------------- -------------- ---------------- --------------
Balance at 31
March 2019 68,403,220 38,744 24,281 (64,058,104) 408,141
OKYO Pharma Limited
Consolidated statement of cash flows
for the six months ended 30 September 2019
Year ended Year ended Year ended
30 September 31 March 31 March
Notes 2019 (unaudited) 2019 2018
GBP GBP GBP
Cash flows from operating activities
Loss for the year (885,428) (3,759,619) (20,169,022)
Adjusted for non-cash and non-operating
items:
Shares issued in lieu of fees 8 - 2,035,192 175,673
Share options lapsed - - (68,931)
Share options cancelled - - 71,954
Share options charge 13 20,340 38,744 -
Warrants charge 13 50,381 24,281 -
Depreciation 9 167 167 -
Realised foreign exchange (123,011)
Disposal of subsidiary - - 18,949,877
-------------- -------------- --------------
(814,540) (1,661,235) (1,163,460)
Change in trade and other receivables 10 (345,804) (100,547) 141,819
Change in trade and other payables 11 333,838 236,105 (116,335)
-------------- -------------- --------------
Cash used in operating activities (826,506) (1,525,677) (1,137,976)
Cash flows from investing activities
Proceeds from issuance of ordinary
shares 400,000 - -
-------------- -------------- --------------
Cash generated by financing activities 400,000 - -
Cash flows from investing activities
Acquisition of property, plant and
equipment - (1,014) -
-------------- -------------- --------------
Cash used in investing activities - (1,014) -
Decrease in cash and cash equivalents (426,506) (1,526,691) (1,137,976)
Cash and cash equivalents at beginning
of period 481,153 2,007,844 3,145,820
-------------- -------------- --------------
Cash and cash equivalents at end
of period 54,647 481,153 2,007,844
OKYO Pharma Limited
Notes to financial statements
for the six months ended 30 September 2019
1. Reporting Entity
OKYO Pharma Limited (the "Company" or "OKYO") is a company
domiciled in Guernsey and listed on the standard market of the
London Stock Exchange. The principal activities of the Company and
its subsidiaries (the Group) are to develop first in class drug
candidates that prevent the disease instead of controlling it, and
we achieve this through our collaboration with pioneer scientists
in the field.
The Company wishes to develop next-generation therapeutics to
improve the lives of patients with inflammatory eye diseases and
chronic pain. Our goal is to develop first in class drug candidates
that prevent the disease instead of controlling it, and we achieve
this through our collaboration with pioneer scientists in the
field.
2. ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below. These
policies have been applied consistently to all the years presented
unless otherwise stated.
Basis of preparation
These interim consolidated financial statements of the Group and
Company have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European
Union, IFRIC interpretations and the Companies (Guernsey) Law 2008
as applicable to companies reporting under IFRS. They do not
include all disclosures that would otherwise be required in a
complete set of financial statements and should be read in
conjunction with the 31 December 2018 Annual Report and Financial
Statements. The financial information has not been prepared (and is
not required to be prepared) in accordance with IAS 34 Interim
Financial Reporting. The annual consolidated financial statements
of the group are prepared in accordance with IFRS as adopted by the
European Union. The comparative financial information for the year
ended 31 December 2018 included within this report does not
constitute the full statutory Annual Report for that period.
The Group has applied the same accounting policies and methods
of computation in its interim consolidated financial statements as
in its 2018 annual financial statements, as set out in Note 2 of
that document, except for the adoption of IFRS 16.
Basis of measurement
Functional and Presentation Currency
The financial statements of the Company are presented in Pounds
Sterling (GBP) which is the Company's functional currency. All
financial information presented in Pounds Sterling has been rounded
to the nearest pound.
Estimates
The preparation of financial statements requires management to
make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and in any future periods
affected.
In preparing these financial statements, the significant
judgements made by management in applying the Company's accounting
policies and the key accounting estimates are accruals and the
non-recognition of a deferred tax asset. The deferred tax asset has
not been recognised as the directors do not expect profits to be
made for the foreseeable future.
Basis of consolidation
Subsidiary undertakings are all entities over which the Group
has the power to govern the financial and operating policies of the
subsidiary and therefore exercises control. The existence and
effect of both current voting rights and potential voting rights
that are currently exercisable or convertible are considered when
assessing whether control of an entity is exercised. Subsidiaries
are consolidated from the date at which the Group obtains control
and are de-consolidated from the date at which control ceases.
New and Revised Standards
Standards in effect in New and Revised Standards
Standards in effect in 2019
IFRS 16 'Leases' has come into effect from January 1, 2019 and
has been adopted by the Group. The impact of the adoption of the
leasing standard is disclosed in Note 4 below.
IFRS in issue but not applied in the current financial
statements
The Directors do not expect that the adoption of new IFRS
Standards, Interpretations and Amendments that have been issued but
are not yet effective will have a material impact on the financial
statements of the Group in future periods.
Beyond the information above, it is not practicable to provide a
reasonable estimate of the effect of these standards until a
detailed review has been completed.
A number of IFRS and IFRIC interpretations are also currently in
issue which are not relevant for the Group's activities and which
have not therefore been adopted in preparing these financial
statements.
Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the Board. The Board allocates
resources to and assess the performance of the segments. The Board
considers there to be only one operating segment being the research
and development of biotechnological and pharmaceutical
products.
Taxation
The tax expense for the year represents the total of current
taxation and deferred taxation. The charge in respect of current
taxation is based on the estimated taxable profit for the year.
Taxable profit for the year is based on the profit as shown in the
income statement, as adjusted for items of income or expenditure
which are not deductible or chargeable for tax purposes. The
current tax liability for the year is calculated using tax rates
which have either been enacted or substantively enacted at the
balance sheet date.
Deferred tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated
financial statements. Deferred tax is determined using tax rates
(and laws) that have been enacted or substantially enacted by the
balance sheet date and expected to apply when the related deferred
tax is realized, or the deferred liability is settled. Deferred tax
assets are recognized to the extent that it is probable that the
future taxable profit will be available against which the temporary
differences can be utilized.
Foreign currency translation
Foreign currency transactions are translated using the rate of
exchange applicable at the date of the transaction. Foreign
exchange gains and losses resulting from the settlement of such
transactions and from the re-translation at the year end of
monetary assets and liabilities denominated in foreign currencies
are recognised in the income statement.
On consolidation, the assets and liabilities of foreign
subsidiaries are translated into Pound Sterling at the rate of
exchange prevailing at the reporting date and their statements of
comprehensive income are translated at exchange rates prevailing at
the dates of the transactions. The exchange differences arising on
translation for consolidation are recognised in other comprehensive
income. On disposal of a foreign subsidiary, the component of other
comprehensive income relating to that particular foreign subsidiary
is recognised in profit or loss.
Research and development
All on-going research and development expenditure is currently
expensed in the period in which it is incurred. Due to the
regulatory environment inherent in the development of the Group's
products, the criteria for development costs to be recognised as an
asset, as set out in IAS 38 'Intangible Assets', are not met until
a product has been granted regulatory approval and it is probable
that future economic benefit will flow to the Group. The Group
currently has no qualifying expenditure.
Financial instruments
Financial assets
The Group classifies a financial instrument, or its component
parts, as a financial liability, a financial asset or an
equity instrument in accordance with the substance of the
contractual arrangement and the definitions of a
financial liability, a financial asset and an equity
instrument.
The Group evaluates the terms of the financial instrument to
determine whether it contains an asset, a liability or
an equity component. Such components shall be classified
separately as financial assets, financial liabilities or
equity instruments.
A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or
equity instrument of another entity.
(a) Financial assets, initial recognition and measurement and subsequent measurement
All financial assets not recorded at fair value through profit
or loss, such as receivables and deposits, are
recognised initially at fair value plus transaction costs.
Financial assets carried at fair value through profit or loss
are initially recognised at fair value, and transaction costs
are expensed in the income statement.
The measurement of financial assets depends on their
classification. Financial assets such as receivables and
deposits are subsequently measured at amortised cost using the
effective interest method, less loss allowance.
The Group does not hold any financial assets at fair value
through profit or loss or fair value through other
comprehensive income.
(b) Financial liabilities, initial recognition and measurement and subsequent measurement
Financial liabilities are classified as measured at amortized
cost or FVTPL.
A financial liability is classified as at FVTPL if it is a
derivative. Financial liabilities at FVTPL are measured at fair
value and net gains and losses, including any interest expense,
are recognised in profit or loss.
Other financial liabilities are subsequently measured at
amortised cost using the effective interest method.
Interest expense and foreign exchange gains and losses are
recognised in profit or loss. Any gain or loss on
derecognition is also recognised in profit or loss.
The Group's financial liabilities include trade and other
payables.
Warrants
Warrants issued by the Group to investors as part of a share
subscription are compound financial instruments
where the warrant meets the definition of a financial
liability.
The financial liability component is initially measured at fair
value in the Consolidated Statement of Financial
Position. Equity is measured at the residual between the
subscription price for the entire instrument and the
liability component. The financial liability component is
remeasured depending on its classification. Equity is not
remeasured.
Investments
Investments are held as non-current assets and comprise
investments in subsidiary undertakings and are stated at cost less
provision for any impairment.
Other current assets
Other current assets are currently measured at cost less
accumulated impairment. The asset is not yet being amortised since
it is not yet in the condition necessary for it to be capable of
operating in the manner intended by management.
Share capital
Ordinary shares of the Company are classified as equity.
Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less
accumulated depreciation and accumulated impairment losses. Costs
include expenditures that are directly attributable to the
acquisition of the asset. Purchased software that is integral to
the functionality of the related equipment is capitalised as part
of that equipment.
When parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items
(major components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and
equipment are determined by comparing the proceeds from disposal
with the carrying amount of property, plant and equipment, and are
recognised in profit or loss.
(ii) Depreciation
Depreciation is calculated on the depreciable amount, which is
the cost of an asset, or other amount substituted for cost, less
its residual value.
Depreciation is recognised in profit or loss on a straight-line
basis over the estimated useful life of each part of an item of
property, plant and equipment. Leased assets are depreciated over
the shorter of the lease term and their useful lives unless it is
reasonably certain that the Company will obtain ownership by the
end of the lease term.
The estimated useful lives for the current period and the
comparative period are as follows.
Fixtures and fittings 5 years
IT and equipment 3 years
Depreciation methods, useful lives and residual values are
reviewed at each reporting date. Depreciation is allocated to the
operating expenses line of the income statement.
Impairment
Impairment of financial assets measured at amortised cost
At each reporting date the Group recognises a loss allowance for
expected credit losses on financial assets measured at amortised
cost.
In establishing the appropriate amount of loss allowance to be
recognised, the Group applies either the general approach or the
simplified approach, depending on the nature of the underlying
group of financial assets.
General approach
The general approach is applied to the impairment assessment of
refundable lease deposits and other refundable lease contributions,
restricted cash and cash and cash equivalents.
Under the general approach the Group recognises a loss allowance
for a financial asset at an amount equal to the 12-month expected
credit losses, unless the credit risk on the financial asset has
increased significantly since initial recognition, in which case a
loss allowance is recognised at an amount equal to the lifetime
expected credit losses.
Simplified approach
The simplified approach is applied to the impairment assessment
of trade receivables.
Under the simplified approach the Group always recognises a loss
allowance for a financial asset at an amount equal to the lifetime
expected credit losses.
i) Non-financial assets are tested for impairment whenever
events or changes in circumstances indicate that the carrying
amount may not be recoverable.
ii) Non-financial assets are impaired when its carrying amount
exceed its recoverable amount. The recoverable amount is measured
as the higher of fair value less cost of disposal and value in use.
The value in use is calculated as being net projected cash flows
based on financial forecasts discounted back to present value.
Leases
IFRS 16 Leases was issued in January 2016 and was implemented by
the Group from 1 January 2019. The Standard replaces IAS 17 and
requires lease liabilities and 'right of use' assets to be
recognised on the balance sheet for almost all leases. The adoption
methodology of IFRS 16 is the cumulative catch-up method, and there
was no impact of adoption on 1 January, 2019.
Share based payments
The calculation of the fair value of equity-settled share based
awards and the resulting charge to the statement of comprehensive
income requires assumptions to be made regarding future events and
market conditions. These assumptions include the future volatility
of the Company's share price. These assumptions are then applied to
a recognised valuation model in order to calculate the fair value
of the awards.
Where employees, directors or advisers are rewarded using share
based payments, the fair value of the employees', directors' or
advisers' services are determined by reference to the fair value of
the share options/warrants awarded. Their value is appraised at the
date of grant and excludes the impact of any nonmarket vesting
conditions (for example, profitability and sales growth targets).
Warrants issued in association with the issue of Convertible Loan
Notes are also considered as share based payments and a share based
payment charge is calculated for these too.
In accordance with IFRS 2, a charge is made to the statement of
comprehensive income for all share-based payments including share
options based upon the fair value of the instrument used. A
corresponding credit is made to a share based payment reserve -
options, in the case of options/warrants awarded to employees,
directors, advisers and other consultants.
If vesting periods or other vesting conditions apply, the
expense is allocated over the vesting period, based on the best
available estimate of the number of share options/warrants expected
to vest. Non market vesting conditions are included in assumptions
about the number of options / warrants that are expected to become
exercisable.
Estimates are subsequently revised, if there is any indication
that the number of share options/warrants expected to vest differs
from previous estimates. No adjustment is made to the expense or
share issue cost recognised in prior periods if fewer share options
ultimately are exercised than originally estimated.
Upon exercise of share options/warrants, the proceeds received
are allocated to share capital with any excess being recorded as
share premium.
Where share options are cancelled, this is treated as an
acceleration of the vesting period of the options. The amount that
otherwise would have been recognised for services received over the
remainder of the vesting period is recognised immediately within
the Statement of Comprehensive Income.
All goods and services received in exchange for the grant of any
share based payment are measured at their fair value.
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial information in accordance with
generally accepted accounting practice, in the case of the Group
being International Financial Reporting Standards ('IFRS') as
adopted by the European Union, requires the directors to make
estimates and judgements that affect the reported amount of assets,
liabilities, income and expenditure and the disclosures made in the
financial statements. Such estimates and judgements must be
continually evaluated based on historical experience and other
factors, including expectations of future events.
When entering into agreements with third parties which provide
the rights to conduct research into specific biological processes
the group account for these agreements as an expense if the
agreements are 'milestone' in nature and relate to the Group's own
research and development costs. Such agreements involve periodic
payments and are evaluated as representing payments made to fund
research.
The only other critical accounting estimates and judgements in
the preparation of the financial statements were fair value
estimates used in the calculation of share based payments and
warrants which have been detailed above in note 2, accounting
policies, and note 8, share based payments, to the accounts.
4. CHANGES IN ACCOUTING POLICIES
The group has adopted IFRS 16 retrospectively from 1 January
2019, but has not restated comparatives for the 2018 reporting
period, as permitted under the specific transitional provisions in
the standard. The reclassifications and the adjustments arising
from the new leasing rules are therefore recognised in the opening
balance sheet on 1 January 2019.
On adoption of IFRS 16, the group recognised lease liabilities
in relation to leases which had previously been classified as
'operating leases' under the principles of IAS 17 Leases. These
liabilities were measured at the present value of the remaining
lease payments, discounted using the lessee's incremental borrowing
rate as of 1 January 2019. The weighted average lessee's
incremental borrowing rate applied to the lease liabilities on 1
January 2019 was 3.35%.
The Group assesses whether a contract is or contains a lease at
inception of the contract. The Group recognises a right-of-use
assets and corresponding lease liabilities at the lease
commencement date, except for short term leases and leases of low
value. For these leases, the lease payments are recognised as an
operating expense on a straight-line basis over the term of term of
the lease.
The right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liabilities adjusted for
any lease payments made at or before the commencement date, plus
any initial costs incurred. The right-of-use assets are
subsequently measured at cost less accumulated depreciation and
impairment losses. The right-of-use assets are from the
commencement date depreciated over the shorter period of lease term
and useful life of the underlying asset. The estimated useful lives
of right-of-use assets are determined on the same basis as those of
property and equipment. In addition, the right-of-use assets are
periodically reduced by impairment losses, if any, and adjusted for
certain remeasurements of the lease liabilities, e.g. revised
discount rate, change in the lease term or change in future lease
payments resulting from a change in an index.
The lease liabilities are initially measured at the present
value of the lease payments that are not paid at the commencement
date, discounted using the interest rate determined by the Group's
borrowing rate.
2019
GBP
Operating lease commitments disclosed under IAS17
as at 31 December 2018 1,183
--------
Less low value and short term leases recognised
in a straight-line basis as an expense (1,183)
--------
Remaining lease commitments discounted using the -
Group's incremental borrowing rate as at the date
of initial application
Lease Liability recognised ad at 1 January 2019 -
--------
Of which:
--------
Current lease liabilities -
--------
Non-current lease liabilities -
--------
5. OPERATING LOSS
Operating loss is stated after charging:
Period ended Period ended
30 September 2019 30 September 2018
Group and Company (unaudited) (unaudited)
GBP GBP
Auditors' Fees - -
Directors' Fees 23,081 40,500
6. CAPITAL AND RESERVES
Capital Management
The Company manages its capital to maximise the return to the
shareholders through the optimisation of equity. The capital
structure of the Company at 30 September 2019 consists of equity
attributable to equity holders of the Company, comprising issued
capital, reserves and retained deficit as disclosed.
The Company manages its capital structure and makes adjustments
to it, in light of economic conditions and the strategy approved by
shareholders. To maintain or adjust the capital structure, the
Company may adjust the dividend payment to shareholders, return
capital to shareholders or issue new shares and release the
Company's share premium account.
Share capital and premium
The Company is authorised to issue an unlimited number of nil
par value shares of a single class. The Company may issue
fractional shares and a fractional share shall have the
corresponding fractional rights, obligations and liabilities of a
whole share of the same class or series of shares. Shares may be
issued in one or more series of shares as the Directors may by
resolution determine from time to time.
Each share in the Company confers upon the shareholder:
-- the right to one vote at a meeting of the shareholders or on any resolution of shareholders;
-- the right to an equal share in any dividend paid by the Company; and
-- the right to an equal share in the distribution of the
surplus assets of the Company on its liquidation.
The Company may by resolution of the Directors redeem, purchase
or otherwise acquire all or any of the shares in the Company
subject to regulations set out in the Company's Articles of
Incorporation.
Authorised
The Company is authorised to issue an unlimited number of nil
par value shares of a single class.
Share
Shares capital Share premium
Issued ordinary shares of US$0.00 each Number GBP GBP
At 31 March 2019 (audited) 524,108,283 - 68,403,220
Shares issued 36,363,636 - 400,000
At 31 September 2019 (unaudited) 560,471,918 - 68,803,220
Issuance of ordinary shares in the period
On 20 May 2019, October 2018, 36,363,636 ordinary shares were
issued at a price of 1.1p per ordinary share tor aise gross
proceeds of GBP400,000.
Share options reserve
These reserves comprise the fair value of options in issue as at
30 September 2019.
Warrants reserve
These reserves comprise the fair value of warrants in issue as
at 30 September 2019.
7. PROPERTY, PLANT AND EQUIPMENT
Details of the Groups property, plant and equipment are as
follows:
Group IT equipment Total
GBP GBP
Cost
At 1 April 2019 - -
Additions 1,014 1,014
Disposals - -
At 30 September 2019 1,014 1,014
Depreciation
At 1 April 2019 167 167
Charge in year 167 167
At 30 September 2019 334 334
Net book value as at 30 September
2019 680 680
============= ======
Net book value as at 31 March 2019 847 847
============= ======
8. TRADE AND OTHER RECEIVABLES
(unaudited) (unaudited)
30 September 30 September
2019 2018 31 March 2019
Group GBP GBP GBP
Other receivables - 4,223
VAT receivable 8,389 11,368 81,241
Prepayments 24,777 4,419 15,117
-------------- -------------- --------------
33,167 15,787 100,581
============== ============== ==============
9. TRADE AND OTHER PAYABLES
Group (unaudited) (unaudited) 31 March
2019
30 September 30 September GBP
2019 GBP 2018 GBP
Trade payables 633,625 89,909 292,694
Accruals 25,440 77,201 14,280
Related party payable 1,937 - 5,473
Other creditors - - 14,717
661,002 15,787 327,164
============== ============== ==========
10. SHARE OPTIONS AND WARRANTS
Options
The Company operates share-based payment arrangements to
remunerate directors and key employees in the form of a share
option scheme. It also issues options in lieu of fees to key
suppliers and collaborators. The exercise price of the option is
normally equal to the market price of an ordinary share in the
Company at the date of grant.
30 September 2019 (unaudited) 31 March 2019
Options Weighted Average Options Weighted Average
exercise price exercise price
(pence) (pence)
Outstanding at
1 April 23,000,000 4.5 - -
Granted - 4.5 23,000,000 4.5
Forfeited - - - -
Cancelled - - - -
Outstanding at
period end 23,000,000 4.5 23,000,000 4.5
============ ================== =========== =================
Exercisable at
period end - - - -
============ ================== =========== =================
No options were exercised during the six months ending 30
September 2019 and year ending 31 March 2019.
The total outstanding fair value charge of the share option
instruments is deemed to be approximately GBP41,910 (March 2019:
GBP62,250). A share based payment charge for the year of GBP20,340
has been expensed in the statement of comprehensive income.
The Directors have used the Black-Scholes option pricing model
to estimate the fair value of most of the options applying the
assumptions below.
Historical volatility relies in part on the historical
volatility of a group of peer companies that management believes is
generally comparable to the Company.
The Company has not paid any dividends on common stock since its
inception and does not anticipate paying dividends on its common
stock in the foreseeable future.
The Company has estimated a forfeiture rate of zero.
Warrants
As part of the acquisition of the Chemerin project, the
underlying scienti c founders of the Chemerin Project, who will
continue to be involved in the development of the Chemerin Project,
received 35,000,000 warrants as consideration. The warrants are
exercisable at a price of 4.5 pence each and are split into four
distinct tranches and each tranche becomes exercisable upon
satisfaction of a speci c developmental milestone. The warrants are
exercisable until 17 July 2023.
On 20(th) May 2019, subscription warrants were issued to Panetta
Partners Ltd. The 36,363.636 warrants were attached to the
subscription shares on a one for one basis at an exercise price of
1.35p each. The warrants were exercisable at any time and for a
period of 5 years from date of issue.
20 May 2019 6 July 2018
------------- --------------
Grant date share
price 2.0p 1.5p
Exercise share price 1.35p 4.5p
Vesting periods Fully vested 25% each year
Risk free rate 0.71% 0.71%
Expected volatility 65.5% 65.5%
Option life 5 years 5 years
The Directors have estimated the fair value of the warrants in
services provided using the Black-Scholes valuation model based on
the assumptions above. The remaining fair value of the warrant
instruments is deemed to be approximately GBP538,760 (2018:
GBP150,918). For each tranche of warrants, the charge has been
expensed over the vesting period. A share based payment charge for
six months of GBP50,381 has been expensed in the statement of
comprehensive income.
11. RELATED PARTY TRANSACTIONS
All related party transactions occurred on an arm's length basis
and in the normal course of operations.
West African Minerals Limited ("WAML")
WAML is a related party of the Company as it shares a common
director, Willy Simon. In the prior year, the Group had agreed to a
deed of release with WAML whereby it agreed to write off
$17,056,070 of loans in exchange for shares in WAML to be
distributed as part of the in specie distribution. A remaining
amount of $4,000,000 is still outstanding from WAML, however, after
careful consideration of the operations of WAML and its
subsidiaries, the Company decided to impair this receivable down to
GBP0 as it does not expect to recover any of this outstanding
debt.
Tiziana Life Sciences PLC
Tiziana Life Sciences PLC is a related party as it shares common
directors and officers. The Company share premises and other
resources with Tiziana Life Sciences PLC and there is a shared
services agreement in place between Company and Tiziana Life
Sciences PLC. As at 30(th) September 2019, GBP1,937 was due to
Tiziana Life Sciences PLC in respect of this agreement.
On 28(th) June 2019, OKYO entered into a fixed term unsecured
loan agreement with Tiziana Life Sciences PLC. In order to maximise
the return on uncommitted cash in the short term, OKYO extended a
short term loan facility to Tiziana Life Sciences PLC for
GBP400,000 at an interest rate of 10% per annum for a period of one
year. As at 30(th) September 2019, GBP413,219 was due from Tiziana
Life Sciences PLC in respect of this agreement.
Panetta Partners Limited
Panetta Partners Limited is a related party as it is a
shareholder of the Company. The Company has entered into a Deed of
Assignment with Panetta Partners whereby the Company has the
licence and sub-licence of certain research and development assets
in relation to the Chemerin product, assigned to it.
12. BASIC AND DILUTED LOSS PER SHARE
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Group by the weighted average
number of ordinary shares in issue during the year.
6 months 12 months
to to
30 September 31 March
2019 2019
(unaudited)
-------------- ------------
(Loss) attributable to equity holders
of the Group (GBP) (885,428) (3,759,619)
Weighted average number of ordinary
shares in issue 555,390,972 513,900,867
Basic loss per share (pence per share) (0.01) (0.01)
============== ============
As the Group is reporting a loss from continuing operations for
the year then, in accordance with IAS 33, the share options are not
considered dilutive because the exercise of the share options would
have an anti-dilutive effect. The basic and diluted earnings per
share as presented on the face of the Income Statement are
therefore identical. All earnings per share figures presented above
arise from continuing and total operations and therefore no
earnings per share for discontinued operations are presented.
13. COMMITMENTS AND CONTINGENCIES
The Group's main financial commitments relate to the contractual
payments in respect of its licensing agreements. Due to the
uncertain nature of scientific research and development and the
length of time required to reach commercialisation of the products
of this research and development, pre-clinical, clinical and
commercial milestone obligations are not detailed until there is a
reasonable certainty that the obligation will become payable.
Contractual commitments are detailed where amounts are known and
certain.
The Group are committed to paying an annual license maintenance
fee for BAM-8 until the first commercial sale.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR QVLFLKFFEFBZ
(END) Dow Jones Newswires
November 29, 2019 02:00 ET (07:00 GMT)
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