Final Results

Aptamer Group plc (AIM: APTA), the developer of novel Optimer® binders to enable innovation in the life sciences industry, today announces its full year results for the twelve months ended 30 June 2023 (the "Period"). Shareholders are directed to the Chairman's Statement, Financial Statements and accompanying notes below.

Highlights

• Revenue of £1.8 million (2022: £4.0 million)
• Adjusted EBITDA loss of £4.7 million (2022: £1.7 million)
• Relocation to new premises
• Post year end:

o Refinanced with £3.5 million in two equity placings (balance at end of October 2023: £2.6 million)

o New management team

o Strategy reset - focusing on achieving EBITDA and cash break even within two years

o Cost base reduced

Operational Highlights

• Contracts signed with a top five pharmaceutical company to develop multiple Optimer® binders as immunohistochemistry (IHC) reagents to support pipeline development and early discovery targets (Jul 2022)
• Partnership to develop Optimer® therapeutics to block the activity of naturally occurring antibodies within the body for use as a potential therapy to prevent transplant rejection. (Nov 2022)
• Multiple deals signed with Novavax, a vaccine developer for respiratory diseases, who require Optimer® binders to improve the selectivity of their Quality Control (QC) assays (Nov 2022)
• Multiple deals signed (and expanded) with a multinational consumer goods company for Optimer® binders supporting the development of novel direct-to-consumer personal care products (Jan 2023)
• Partnership with a developer of custom enzymes based in Asia for Optimer® binders to incorporate into a biosensor for convenient monitoring of the company's manufacturing processes (Jan 2023)
• Deal signed with Basecure Therapeutics to identify cell-targeting Optimer® binders for potential as targeted delivery vehicles for siRNA (Jan 2023)
• Optimer®-Fc tools launched to enable immunohistochemistry research and diagnostic workflows (Mar 2023)
• Patent filed in a collaborative project with NeuroBio to support early diagnostics for Alzheimer's disease (Jun 2023)

Post-period end

• A follow-on deal with a US-based vaccine development company to develop Optimer® binders as QC reagents (Jul 2023)
• Refreshed Board with pre-IPO Chairman and co-founder returning to support and direct the team to revenue generation & technical delivery (Aug 2023)
• Net of costs, £3.5 million raised to support the Company target to reach an EBITDA and cash breakeven position within two years (Aug/Sept 2023)
• Signed two deals with a top five pharma partner, valued at up to £0.2 million for the development of tools for use in immunoassays and IHC in detecting neuronal targets (Aug 2023)
• Completed the reset of the fixed cost base to £3.5m per annum, whilst maintaining the ability to win sales and deliver projects (Sept 2023)
• Process improvements have been successfully trialled and implemented across the platform to support lower sample requirements, increase capacity and improve project margins (Oct 2023)
• Development of exemplification data, demonstrating Optimer® binders as IHC reagents for research and diagnostics is underway with promising early results (Oct 2023)

Commenting on the results, Steve Hull, Executive Chairman of Aptamer Group, said: "I am pleased to return as the Executive Chairman of Aptamer Group. The Company has a leading technology platform that is in high demand across the life sciences industry, in supporting researchers and developers overcome many of the limitations of antibodies and allow them to advance novel technology solutions to drive healthcare forward. While the past year has been difficult for Aptamer, with contributory challenging macroeconomic conditions, the Company, invigorated by the new Board, is now showing good momentum and success in expanding current partnerships and winning new contracts.

The new Board has reset the Group's cost-base and revenue expectations. In addition, it has completed an extensive process improvement programme to support improved selections, which will reduce sample requirements and improve margins. We expect to continue to build on the Company's expertise to offer excellent services using the Optimer® platform, with a key focus of achieving a cash breakeven position over the next two years."

Webinar

Dr Arron Tolley, Dr David Bunka and Andrew Rapson will provide a live presentation relating to the Final Results via Investor Meet Company on 9th Nov 2023 at 3:00pm GMT.

Investors can sign up to Investor Meet Company for free and add to meet APTAMER GROUP PLC via:

Charmain's Statement

For the year under review, the Group's operational progress was not matched by revenues. An encouraging and active pipeline of new business has taken longer to convert into revenues, especially licensing and royalty-based contracts, against a background of significant macro and sector headwinds. A change in Aptamer Group's leadership which concluded in August 2023 has re-evaluated the Company's commercial and operational strategies and set the Company on a footing for success.

The new Board is composed of experienced individuals, all of whom are investors in the Company and focused on increasing shareholder value while delivering customer-centric improvements to the technology and business. With these improvements, we aim to support increased commercial traction by improving the product offering, broadening the applicable marketplace for our technology and driving future opportunities of higher value and impact.

With the new leadership and focus embedded, the Board has confidence that Aptamer Group's leadership position in the aptamer market is retained. The new Board is focused on revenue generation and technical delivery, with an updated realistic revenue plan in place along with tight cost discipline. The Optimer® platform we have built will begin to yield positive momentum and revenue growth with our key objective to move the company to an EBITDA and cash breakeven position within the next two years and focus on acquiring royalty-bearing licences.

The Company continues to see demand for its Optimer® technology from across the life sciences. Due to the continued demand for Optimer® binders and the Group's expertise in the affinity ligand industry, we believe we are well-placed to use the platform to build lower-risk fee-for-service revenues and drive positive momentum and revenue growth and to target opportunities to licence its technology to the developers of diagnostic tests and therapeutics.

Strategy

Our mission at Aptamer Group is to remove the scientific barriers to our partners' success by delivering high quality science underpinned by innovation, integrity, and precision. As a well-established leader within the aptamer market, we are focused on using our Optimer® platform to discover and develop new affinity binders to support our global customer base, from research and bioprocessing to diagnostics and therapeutics. Over the past year, we have advanced our service offering to enable a turnkey service for novel affinity binders, which includes binder discovery, development and improved assay and validation services. This has been supported by the move to new premises in November 2022, which provided increased capacity.

Going forward, the Company's focus is on tight cost discipline with the intention of reaching an EBITDA and cash breakeven position within two years. Consequently, budgeted costs for premises, overheads and development, directors, and staff have been reduced from approximately £6.4 million (unaudited) in the year ended 30 June 2023 to approximately £3.5 million for the current financial year. This cost base reset was completed by 30 September 2023, including a reduction in operational headcount to the level required to meet forecasted revenues over the next several years. The reduction in operational headcount was achieved without any redundancies by allowing natural attrition in staff numbers, with the top performers retained and incentivised.

Research and development activities over the financial year 2023 have resulted in a broader service offering, enabling us to offer validatory assays and assay development activities post-Optimer® development. We have also developed a new technology and service called Optimer®-Fc for the development of reagents for automated IHC workflows to address the need for improved reagents in this market vertical.

Current internal research activities are focused on process improvements to reduce delivery timelines and increase margins. Of the £3.5 million raised since the year end, £0.3 million has been reserved to support research and development activities and process improvements to the technology and to generate more supporting data. The Board believes that outcomes of these research and development activities will enable further proof of the platform supporting the signing of high value, high impact, deals. Future higher-risk development work will, in whole or part, be funded via grants and collaborations to minimise the impact on working capital requirements. A collaboration with Bioliquid Innovative Genetics and Anima Design is a great example of such work, funded through the European Eurostars programme to support Optimer® development for an application in a novel prenatal and foetal diagnostic platform.

During FY2023, the Group achieved revenues of £1.8 million from fee-for-service contracts. There is a continued increase in demand for the development of alternative ligands across the life science industry, which the Group is well-positioned to capitalise on.

To achieve EBITDA and cash breakeven position during the year ending 30 June 2025, the Company is targeting revenue of £3.0 million for the current financial year, rising to £6.0 million for the year ending 30 June 2026. These figures are significantly lower than previous targets and reflect a change of emphasis in setting expectations. These revised targets are mainly based on expectations of fee-for-service revenues for contract research, with minimal expectations for licensing revenues.

Aptamer's model will remain to use its contract research relationships as a platform to build lower-risk fee-for-service revenues and horizon scan for material licence fee opportunities. Under the revised strategy, the Group will focus on developing the core fee-for-service revenues to achieve profitability. Post-period, the Company has announced the signing of six contracts with a combined value of up to £0.7 million for the current financial year (subject to ongoing commercial and scientific attrition).

Aptamer will continue to target opportunities to out-licence its technology. If successful, these opportunities have the potential to generate material recurring revenue streams. Since IPO, Aptamer has found that whilst there is significant appetite for its technology, reaching and securing licensing agreements is taking much longer than anticipated and can be impacted by factors outside the Group's control. Hence, the Group is refocusing its efforts to ensure that it is sustainable on a lower level of fee-for-service work whilst retaining the potential upside from these longer-term opportunities.

Group Performance

Over the past financial year, Aptamer Group has signed contracts across all divisions for research reagents and bioprocessing ligands in Aptamer Solutions, diagnostic tools in Aptamer Diagnostics and therapeutic development in Aptamer Therapeutics. This has delivered revenue of £1.8m from our fee-for-service business. While revenue was lower than expected for FY23, the new Board has reset target expectations and updated the timeframes around downstream licensing revenues.

We continue to see an increasing demand for Optimer® binders as a novel alternative to antibodies, supporting researchers and developers with both novel applications that are intractable with antibody technology and with standard applications where antibody performance has proven insufficient.

Aptamer Solutions

Aptamer Solutions provides services for the custom development of oligonucleotide-based Optimer® binders for use as research tools, quality control reagents and affinity ligands to support bioprocessing applications.

The Aptamer Solutions business has shown good momentum in deal flow and variety during 2023, reflecting the need across the life science industry for alternatives to antibodies to support new and improved applications and the detection and monitoring of new biomarkers.

At the beginning of the period, we signed multiple contracts with a top-five pharma partner for the development of Optimer® binders as IHC reagents to support improved sensitivity and selectivity in biomarker identification. Post-period end, this partnership was expanded with two further contracts signed for Optimer® IHC reagents to new targets and for Optimer® binders to support immunoassays for targets associated with neurodegeneration.

A contract was signed with vaccine manufacturer Novavax in November 2022 to develop Optimer® binders to enable multiplex analysis in Quality Control (QC) assays. Following initial positive results, further agreements were signed during the period to develop Optimer® binders to additional targets for use in their assays.

At the start of the second half of the fiscal year (H2), a follow-on deal was signed with a multinational consumer goods company following positive results in an earlier project. The second deal will focus on the development of Optimer® binders for a direct-to-consumer personal care product, demonstrating a novel application in the fast-moving consumer goods sector.

A further partnership agreed at the beginning of H2 is for the development of Optimer® binders for 'process monitoring', another QC application, for an enzyme manufacturer based in Asia. Once developed, the binders will be incorporated into a biosensor to allow the partner company to conveniently monitor reactants and products in the company's manufacturing process.

Finally, a contract was signed with a large US-based gene therapy company for Optimer® binders to a key target in neurodegenerative disease. Here, developed Optimer® binders will enable reliable measurements of a disease biomarker in the company's research immunoassays. These binders will be used with an antibody in a sandwich pair format, demonstrating that Optimer® reagents can be used as replacements and in conjunction with antibodies.

As the identification of novel disease biomarkers continues and novel therapeutics are progressing through the clinic, our partners are increasingly investigating Optimer® technology to meet their need for affinity ligands that can support these new targets, many of which have proven intractable with alternative technologies. Delivering benefits of ethical compliance, the ability to tune development for success with a wider target range, and both cost-efficiencies and security in supply, Optimer® binders are offering much-needed innovation to enable new research and bioprocessing solutions.

Aptamer Diagnostics

Aptamer Diagnostics focuses on the development and integration of Optimer® binders into diagnostic platforms. Optimer® binders offer significant advantages, including development against previously intractable targets, improved binding characteristics and greater batch-to-batch consistency in manufacture. This leads to potential improvements in multiple diagnostic formats, such as Enzyme-Linked Immunosorbent Assay (ELISA), flow cytometry, biosensors and cell and tissue imaging.

Within the period, the Company signed an agreement with Neuro-Bio to develop Optimer® binders against a novel biomarker for Alzheimer's disease. The Optimer® binders will be used to enable the development of a novel lateral flow test for the early diagnosis of Alzheimer's disease. This agreement has progressed successfully with a panel of binders being patented by Neuro-Bio. Further integration of the binders into a routine lateral flow test will support the clinical and commercial development of rapid diagnostics for Alzheimer's disease through simple nasal sampling.

Aptamer was awarded a portion of a €1.125m Eurostars grant. The consortium also includes Bioliquid Innovative Genetics and Anima Design of Spain. As part of this consortium, Aptamer will develop Optimer® binders to novel biomarkers to support improved non-invasive prenatal testing and the diagnosis of placental disease.

As the global need for diagnostics continues to grow, Optimer® binders are being explored by our partners across the diagnostic industry for a range of applications. Their excellent target recognition, consistent and ethical supply, temperature stability and batch consistency enable simple global logistics and position our Optimer®-based tests as an antibody alternative, or antibody partner, for use in diagnostics.

Aptamer Therapeutics

Aptamer Therapeutics delivers contract research services in the field of therapeutic development for example, developing Optimer®-drug conjugates, Optimer®-enabled gene therapies and Optimer® agonists and antagonists for potential therapeutic application.

During the period, Aptamer entered the second phase of development with CRUK to develop a bifunctional Optimer® therapeutic for the treatment of chronic myelomonocytic leukaemia (CMML) and other myeloid malignancies. In the first phase, an Optimer® has been developed that is effective in lab-based experiments in overcoming a causative gene mutation in CMML. The second phase of development is focused on developing an Optimer® as a delivery vehicle to target treatment to the required cell type, with the intention to develop the two Optimer® binders as a single bifunctional therapeutic.

A new partnership was developed with an organ transplantation tolerance biotechnology company to develop Optimer® binders to block the activity of naturally occurring antibodies within the body. The developed Optimer® binders will be used as a potential therapy to prevent transplant rejection. Following the signing of the contract in November, the initial development phase has been completed and candidate Optimer® binders shipped to the partner company for internal validation and assessment.

During H2, a new contract was agreed with Basecure Therapeutics; a pre-clinical stage biotech company dedicated to the discovery and development of innovative siRNA-based medicines. Aptamer and BaseCure Therapeutics will work together to develop cell-targeting Optimer® binders that could be used as potential delivery vehicles to improve siRNA uptake into target cells and tissues. If this Optimer®-directed targeted delivery is successful, this would offer new therapeutic opportunities of siRNA-mediated gene knockdown using the Optimer® platform to develop targeting molecules.

Aptamer's partnership with PinotBio remains active, and we continue to progress with the development of candidate Optimer® binders for development as precision Optimer® drug conjugates for a number of solid tumour targets.

Targeted delivery of therapeutic payloads remains a significant challenge. Optimer® binders have a significant advantage as small, oligonucleotide-based molecules offer a novel solution for our partners to deliver diverse payloads, such as chemotherapeutics, gene therapies and radiotherapies. Optimer® advantages can include increased tissue penetration, low immunogenicity and the potential for convenient manufacture with site-directed conjugations.

Operational Update

As awareness of Aptamer Group's technology continues to increase there is an increasing demand for Optimer® binders as synthetic antibody alternatives. The Company relocated to new purpose-built laboratory facilities to meet this demand in November 2022. These new facilities have allowed the expansion of the Optimer® platform and will support the anticipated sales pipeline and the integration of further service lines for turnkey solutions for several years to come.

Over 2021 and 2022, the Group built up its operational scale capabilities to cope with anticipated demand and larger contracts. In practice, targeted opportunities have not converted into revenue in 2023. Under the new management team, the decision was taken to reduce the business's cost base to match more closely with commercial activity. Post-period end, the new Board has worked to right-size the business and this has resulted in a significant reduction in leadership team costs and a 33% reduction in headcount since December 2022 (through natural attrition of team members). This exercise in cost discipline was completed by 30 September 2023 and provides a reduction in total costs for premises, overheads and development, directors, and staff from £6.4 million to £3.5 million for FY24 to support the Group's move to a positive cash flow position over the next two years. The leadership team is continuing to pursue tight cost discipline and seeking to further reduce costs through a reduction in the Company's operational footprint.

Research & Development

Over the period, Aptamer's research and development activities have allowed the development of increased assay and validation services, which are being offered to customers as additional services. The improved translation of the final Optimer® binders into functional products in the customer's hands is a vital validation of the platform for internal research projects and customer projects.

Post-period, the Company's cost restructuring has reduced the focus on internal research and development activities. The new Board has reviewed the existing research and development progress and identified areas of important development, so in September 2023, an additional placing through existing shareholders raised a further £0.3 million that has been ringfenced to support research and development and allow further validation of the Optimer® platform in key focus areas. Process improvement R&D work to improve margins and capacity has been completed. The leadership remains committed to moving Aptamer towards a positive cash flow position and, as such, that the cost of higher-risk development work is offset in part or whole by grant funding.

Board and Senior Management Changes

During the period, Jenny Cutler served as Interim Chief Financial Officer and was replaced by Dr Rob Quinn. Dr Quinn became Interim Chief Executive Officer upon Dr Arron Tolley leaving the Company in April 2023.

Following the fundraise in August 2023, the Board has restructured to include Stephen Hull returning to the Company as Executive Chairman, after leading the Group to flotation in 2021 with Dr Arron Tolley . Dr Tolley returns as Chief Technical Officer, with Dr David Bunka moving to Chief Scientific Officer to concentrate on research and development activities for the Group. Dean Fielding and Dr Adam Hargreaves have joined the Company as new Independent Non-Executive Directors. Dean Fielding is an experienced senior company director with extensive prior involvement as a board member of listed companies. Dr Adam Hargreaves is a board-certified pathologist who brings a broad range of expertise in both diagnostics and early-stage pharmaceutical efficacy and safety development to support Aptamer's technical strategy. The Company intends to appoint a Chief Executive Officer when appropriate to do so.

Andrew Rapson, the previous Head of Finance, has been promoted to Chief Financial Officer and Company Secretary, and Alastair Fleming remains as Chief Operating Officer.

The previous Board members, Dr Ian Gilham (Executive Chairman), Dr Rob Quinn (Interim Chief Executive Officer and Chief Financial Officer), Dr John Richards (Non-Executive Director) and Angela Hildreth (Non-Executive Director), resigned on 21 August 2023. We thank them for their service over the past 20 months.

Macro environment

The Board and senior management team actively monitor risk factors that could potentially affect the business, including the broader macroeconomic environment and global supply chain, to ensure that the business is well placed to act and mitigate such risks where possible.

In FY23, Aptamer Group saw a reduction in available investment and tighter budgeting across the life science industry impact sales numbers. This affected clients, from top pharma companies to small biotech companies, resulting in reduced outsourcing of R&D. Consequently, the Group's pipeline conversion was affected, with many of our partner's projects stalled, and licensing revenue was slower to achieve than anticipated. Consequently, the Board has reset Company targets and focused on fee-for-service revenue, removing anticipation of product licensing from the revenue forecast until clearer timelines are available.

Summary and outlook

Having completed a successful £3.2 million placing in August, with a further £0.3 million raised in September to support research and development, management believes that the Group has sufficient cash resources to fund progress beyond 12 months from the signing date of the accounts. This will allow us to implement our near-term strategy of maintaining tight cost discipline with the intention of reaching an EBITDA and cash breakeven position within two years.

With the new leadership in place at Aptamer, the Company's focus is on delivering commercial and scientific improvements to maintain its position as a leader in the field while using the planned technical and customer-centric advances to drive increased value and impact for future partnerships.

The Company has maintained good progress in deal flow over the past year, expanding current partnerships and winning new contracts across all business divisions. Our strategic focus is on growing the fee-for-service line, where we continue to see demand for Optimer® binders to address the limitations of antibodies across research, bioprocessing, diagnostic and therapeutic sectors. We have already signed a number of contracts with significant partners during the first quarter of FY23, demonstrating the focus of the new Board and the need for such antibody alternatives across the industry.

Strong growth in the aptamer market is predicted for the next nine years1 and Aptamer Group is a recognised leader in the field with a high-throughput platform able to support this growth. We are well placed to support the broad demand from the life science industry. We believe our development services for antibody alternatives offer a much needed solution to the life science industry and look forward to continuing to support our current customer base while expanding on our current pipeline.

We would like to thank all our employees for their hard work, dedication and commitment during the past year despite our challenges in an uncertain economic climate and significant changes to the Company's strategy and leadership. We would also like to thank our shareholders for their support. We are confident that with our contract services customer base and growing pipeline, we are well-positioned to grow the Group's business and deliver shareholder value going forward.

Financial Review

Despite a challenging 12-month period for Aptamer, with the loss of significant contracts and a tightening in the macroeconomic environment, the move to new purpose-built facilities has left us well placed to gain financial performance through improved operational efficiencies. The slowdown in revenue this year, combined with the increased spend required to complete the site relocation, left cash reserves at £0.2 million at the year-end. Post-period, fundraises totalling net proceeds of £3.5 million have been completed and a new Board established, focusing on tight cost discipline, revenue generation and technical delivery.

Revenue

The Group reported revenues for the year ended 30 June 2023 of £1.8 million (year ended 30 June 2022: £4.0 million). FY22 included two large proteomics contracts which did not progress in FY23.

Gross profit

Gross profit decreased from 69% in 2022 to 20% in 2023 reflecting the impact of lower revenue and a stock impairment charge of £0.2m.

Research and development costs

During the year, the Group expensed through the income statement £1.0m (2022: £1.4 million), relating to the continued development of the Optimer®+ platform technology and the design and optimisation of novel aptamer library architectures. The fundraise completed in September 2023 has enabled the continuation of this work in the first half of the 2024 financial year.

Administrative Expenses

Administrative costs were £5.0 million for the year compared to £4.4 million for the year to 30 June 2022. This increase in costs comes from employee costs of £3.3 million (2022: £2.9 million) and an increase in operating costs following the relocation to larger premises, which was completed in November 2022. The headcount has decreased slightly from 49 at 30 June 2022 to 46 at 30 June 2023.

Adjusted EBITDA

The Group uses adjusted EBITDA as a profit performance metric as this excludes items which can distort comparability of underlying trading as well as being the measure of profit which most accurately reflects the cash generating activities of the Group. The reconciliation of adjusted EBITDA to Operating

Loss is as follows:

The Group incurred impairment losses of £2.6 million following a review of the carrying value of the cash-generating unit in light of the conditions prevailing as at 30 June 2023. The impairment loss has been recognised across intangibles, property, plant and equipment and right-of-use assets.

Share-based payment charges

The non-cash charge for the year decreased to £0.1 million (2022: £0.5m). The prior year included a one-off charge of £0.3 million in respect of a warrant that the Company issued to SPARK to subscribe for up to 689,417 Ordinary Shares on 15 December 2021.

Tax

The Group claims each year for research and development tax credits. Since it is loss-making, the Group elects to surrender these tax losses for a cash rebate. The amount is included within the taxation line of the income statement and amounts to £0.5 million (2022: £0.5 million). The Group has not recognised any tax assets in respect of trading losses arising in the current financial year or accumulated losses in previous financial years.

Loss for the year

The loss for the year was £7.8 million (2022: £2.1 million loss). The basic loss per ordinary share increased to 11.35 pence (2022: 3.24 pence per share) based on an average number of shares in issue during the period of 69,055,369 (2022: 64,546,622).

Cash flow

The Group had £0.2 million of cash at 30 June 2023 (2022: £6.7 million). The cash outflow for the year was £6.5 million (2022: £6.3 million inflow). This primarily reflects the cash outflow from operating activities of £4.6 million (2022: £3.0 million outflow), cash receipts relating to research and development tax credits of £0.5 million which represented the tax refund for the prior period (2022: £0.6 million), payment of leases of £0.4 million (2022: £0.5 million) and an investment in capital expenditure and intangible assets of £2.0 million (2022: £0.4 million). The £2.0 million capital expenditure was in relation to the fit out of the new laboratory and office space.

Financial position

Net assets at 30 June 2023 were £0.3 million (2022: £8.1 million) of which cash amounted to £0.2 million (2022: £6.7 million) reflecting the operating cash outflows and the spend fitting out the new laboratory and office space. Although there were significant additions to non-current assets in the period, the overall carrying value of these assets has reduced by £1.4 million which reflects impairment charges recognised in respect of these assets (Note 5).

Following the year end, the Company has successfully raised £3.5 million in net proceeds through equity fundraises. This was completed in conjunction with an appraisal of the ongoing cost base, which has been reduced considerably along with the appointment of a new Board of Directors.

Consolidated statement of comprehensive income

For the year ended 30 June 2023

There were no items of other comprehensive income in the current or prior period. Accordingly, no statement of other comprehensive income has been prepared.

Loss and total comprehensive loss for the year is all attributable to the owners of the Parent Company.

All activities relate to continuing operations.

Consolidated statement of financial position

At as 30 June 2023

Notes to the financial statements

For the year ended 30 June 2023

1 Accounting policies

Company information

The Group consists of Aptamer Group PLC and all of its subsidiaries. The Group is a leading provider of Optimer® reagents for use by customers in research, diagnostics and therapeutics. Aptamer Group has developed a platform technology which is utilised by its three trading subsidiary companies to solve problems for pharmaceutical and biotechnology customers in the bioprocessing, research reagents, diagnostic and therapeutic areas of the life sciences.

1.1 Basis of preparation

The financial information included in this annual results announcement for the year ended 30 June 2023 does not constitute the Group's statutory accounts. Statutory accounts for the period ended 30 June 2022 have been delivered to the Registrar of Companies. The statutory accounts for the year ended 30 June 2023 were approved by the Board on 8 November 2023 and will be delivered to the Registrar of Companies in due course. The Auditor's report on those accounts for the year ended 30 June 2023 was unqualified, made reference to material uncertainty with regard to the going concern basis, and did not contain a statement under 498(2) or 498(3).

Thegroup financial statements have been prepared in accordance with UK adopted International Financial Reporting Standards ("IFRS") and International financial Reporting Committee ("IFRC") Interpretations that are applicable to the consolidated financial statements for the year ending 30 June 2023, in conformity with the requirements of the Companies Act 2006.

These financial statements are prepared in sterling which is the functional currency of the Group and the Company. Monetary amounts in these financial statements are rounded to the nearest £000.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain financial instruments at fair value.

1.2 Basis of consolidation

The consolidated financial statements incorporate those of Aptamer Group PLC and all of its subsidiaries (i.e. entities that the Group controls through its power to govern the financial and operating policies so as to obtain economic benefits). The subsidiaries consolidated in these Group accounts were acquired via Group reorganisation and as such merger accounting principles have been applied. The financial statements of the Company and its subsidiaries are made up to 30 June 2023.

1.3 Going concern

The Group has reported a loss after tax for the year ended 30 June 2023 of £7.8 million (year ended 30 June 2022: £2.1 million). The Group had a cash balance of £0.2 million at 30 June 2023 (30 June 2022: £6.7 million).

In August 2023 the Company completed a fundraise which raised gross proceeds of £3.6 million before expenses and followed this up with a further fundraise in September 2023 raising gross proceeds of £0.3 million before expenses. The cash balance at the end of September 2023 was £2.7 million.

A new Board was appointed following the successful completion of the fundraise in August 2023. Former Chairman Steve Hull has returned to the business as executive Chairman and co-founder Arron Tolley has returned at Chief Technical Officer. In the short time since the new Board has been in situ work has been undertaken to refresh the Aptamer library and a number of process improvements are already well progressed. This has already started to yield results in more robust outputs and significantly improved data and sequencing.

The pipeline remains healthy, with over 120 leads being processed. More importantly we have been able to revisit some of the large pharma customers and offer an improved process as we continue to develop our Aptamer offering.

Following the fundraises, the fixed cost base has been cut back to less than £0.3 million per month. This reduction in costs has come primarily from a reduction in headcount and a significant reduction in Board and management remuneration. At the same time, a share option scheme has been launched to all staff, designed to incentivise and aid recovery and future growth.

In the forecast, full year revenue is anticipated to be higher than was the case in the year to June 2023. Within this forecast, delivery of these expectations would ensure that the resultant positive cashflows together with the current cash balance are sufficient to see the Group through to profitability and positive cash generation after taking account of the reduced cost base. It should be noted that the forecast also includes a significant decrease in capital expenditure compared to the year to 30 June 2023 with the move to the Group's new facility now complete.

The Directors have also considered reasonable likely downside scenarios, which includes slower growth in core revenues.

Should these downside scenarios materialise, the Group may need to seek additional funding. The Directors have a reasonable expectation that the Group could access further funding, from both dilutive and non-dilutive sources. However, there can be no guarantee that the Group would be able to raise additional funding from an equity fundraise to new and existing investors, nor that the Group will successfully develop assets for licensing within the next 12 months.

Based on the above factors the Directors believe that it remains appropriate to prepare the financial statements on a going concern basis. However, the above factors give rise to a material uncertainty which may cast significant doubt over the Group's ability to continue as a going concern and to continue realising its assets and discharging its liabilities in the normal course of business. The financial statements do not include any adjustments that would result from the basis of preparation being inappropriate.

1.4 Revenue from contracts with customers

Research activities

Revenue is measured at the amount of consideration to which the Group expects to receive. If the consideration is receivable more than 12 months after the transaction date and the effect of discounting is material, the revenue amount recognised is discounted to its present value at the transaction date, using a discount rate which reflects customer risk, and the unwinding of this discount is recognised as financial income over the period until the date the consideration is due. Typically, the Group does not enter into transactions whereby revenue is variable or contains non-cash consideration, or is subject to reversals of income.

• the costs relate directly to a contract that the Group can specifically identify;
• the costs are expected to be recovered.

Following performance obligations being satisfied, the constraint of costs incurred is removed and the revenue is recognised by reference to the contractual value of that performance obligation.

1.5 Research and development expenditure

• management intends to complete the intangible asset and use or sell it;
• there is ability to use or sell the intangible asset;
• it can be demonstrated that the intangible asset will generate probable future economic benefits;

Research expenditure and development expenditure that do not meet the criteria above are written off against profits in the year in which they are incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated. Similarly, any research costs relating to revenue-generating contracts are not capitalised on the grounds that the Group does not retain rights to any intellectual property generated as part of this work.

1.6 Intangible assets

• Product development and registrations Up to 15 years on a straight-line basis

1.7 Property, plant and equipment

Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains or losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

• Fixtures, fittings and equipment 6 years on a straight-line basis
• Leasehold improvements Over the remaining life of the lease*
• Other property, plant and equipment 6 years on a straight-line basis

* Amounts are charged on a straight line basis from the date of costs being incurred to the expiry of the lease to which the improvement attracts. This is typically less than 5 years.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss. When revalued assets are sold, it is Group policy to transfer any amounts included in other reserves in respect of those assets to retained earnings.

1.8 Right-of-use assets

• Right-of use assets Shorter of the asset's useful life and the lease term on a

straight-line basis

A number of assets have historically been recognised under lease but where there is a final balloon payment which transfers unconditional ownership into the Group's name. For these assets they have been depreciated over a longer period in accordance with the depreciation policy for the asset class (as shown in 1.7), and on the end date of the lease have been transferred to that asset class.

1.9 Impairment of tangible and intangible assets

1.10 Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

1.11 Inventories

Raw materials, work in progress and finished goods are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Cost includes the reclassification from equity of any gains or losses on qualifying cash flow hedges relating to purchases of raw materials but excludes borrowing costs. Costs are assigned to individual items of inventory on the basis of weighted average costs. Costs of purchased inventory are determined after deducting rebates and discounts.

The Group applies a number of key judgements to its impairment calculations, including:

• Where inventories are used for research projects, these are fully provided for;
• Inventories which have been owned for at least 18 months is fully provided for;
• Any opened and partially used packages of inventories with a residual value of less than £1,000 are fully provided for;

1.12 Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with financial institutions and other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities.

1.13 Financial instruments

Financial assets

The Group classifies its financial assets in the following measurement categories:

• those to be measured at amortised cost.

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (e.g. trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition r issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal or interest.

Debt instruments

· Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets' cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses, which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses), and impairment expenses are presented as a separate line item in the statement of profit or loss.

• Fair value through profit or loss (FVPL): Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/(losses) in the period in which it arises.

Impairment of financial assets

An impairment loss is recognised for the expected credit losses on financial assets where there is an increased probability that the counterparty will be unable to settle an instrument's contractual cashflows on contractual due dates, a reduction in the amounts expected to be recovered, or both.

The probability of default and expected amounts recoverable are assessed using reasonable, and supportable past and forward-looking information that is available without undue cost or effort. The expected credit loss on trade receivables is a probability weighted amount determined from grouping the receivables based on days overdue and making assumptions based on historic information to allocate an overall expected credit loss rate for each group.

Derecognition of financial assets

Financial liabilities

Derecognition of financial liabilities

1.14 Equity instruments

1.15 Taxation

Current tax

Deferred tax

1.16 Provisions

Provisions for legal claims, service warranties and make good obligations are recognised when the Group has a legal or constructive present obligation as a result of a past event, it is probable that the Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.

1.17 Employee benefits

Short-term obligations

Retirement benefits

Share-based payments

Employee options

• including any market performance conditions (e.g., the entity's share price);

1.18 Leases

On commencement of a contract which gives the Group the right to use an asset for a period of time in exchange for consideration, the Group recognises a right-of-use asset and a lease liability unless the lease qualifies as a 'short-term' lease (term is 12 months or less with no option to purchase the lease asset) or a 'low-value' lease (where the underlying asset is £4,000 or less when new).

Initial measurement of the lease liability

To determine the incremental borrowing rate, the Group:

• makes adjustments specific to the lease, e.g. term, country, currency and security.

Subsequent measurement of the lease liability

1.19 Government grants

Research and development expenditure credits

Where the Group receives research and development expenditure credits ("RDEC") it accounts for these as government grant income within operating income as it more closely aligns with grant income as opposed to a taxation credit. The income is recognised on a systematic basis over the periods in which the entity recognises expenses for the related costs for which the grants are intended to compensate, under IAS 20 'Accounting for Government Grants and Disclosures'.

As well as receiving RDEC, the Group also receives R&D tax credits on the development expenditure it makes on the commercial projects it undertakes. These taxation credits are considered to reflect enhanced tax relief and as such are shown as a reduction in income tax or an increase in receivables due from HM Revenue & Customs

1.20 Foreign exchange

Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency"). The consolidated financial statements are presented in Great British Pounds sterling, which is functional and presentation currency of each of the Group's entities.

Transactions and balances

1.21 Finance costs

1.22 Earnings per share

2 Adoption of new and revised standards and changes in accounting policies

In the current year, the following new and revised standards and interpretations have been adopted by the Group but have had no impact on its reported results and financial position:

• Annual improvements to IFRS 2018-2020
• Amendments to IAS 37 'Onerous Contracts' - Cost of fulfilling a contract
• Amendments to IAS 16 'Property, Plant and Equipment' - Proceeds before intended use
• Amendments to IFRS 3 for reference to the conceptual framework

Standards which are in issue but not yet effective

At the date of authorisation of these financial statements, there were a number of standards and interpretations in issue but not yet effective (and in some cases not yet adopted by the UK). The adoption of all of these standards is not expected to have any impact on the Group's financial statements.

3 Judgements and key sources of estimation uncertainty

• Recognition of revenue from multiple element contracts, and revenue recognition

Management uses judgement in determining the fair value of multiple element contracts in order to appropriately recognise the revenue attributable to each element, which may be based on contractual terms or (for bundled contracts) the standalone selling price that would be attributed to each service.

For revenues recognised over time, the value of revenue recognised in the period is dependent on an assessment of work to completion.

Impairment of trade and other receivables

The Group makes an estimate of the recoverable value of trade and other receivables. When assessing impairment of trade and other receivables, management considers factors including the credit rating of the receivable, the ageing profile of receivables and historical experience. As at 30 June 2023 the provision for trade receivables impairment amounted to £nil (2022: £nil).

• Impairment of investments and recoverability of intercompany loans (Company only)

Interests in subsidiary undertakings are reviewed annually to assess whether there is objective evidence to indicate that either the carrying value of interests are impaired or impairments recognised in prior periods require to be reversed. Recoverable value of the subsidiary undertaking is estimated as the higher of value-in-use or fair value less cost of disposal. Fair value is based on net assets and incorporates adjustments to reflect the fair market value. See note 19 for the carrying amount of the investments.

Management further utilises judgement when assessing the recoverability of intercompany loans using the expected credit loss method in accordance with the requirements of IFRS 9 'Financial Instruments'. Based on these forecasts, all receivables have been fully provided for at 30 June 2023.

Impairment of non-monetary assets

The Group assesses these assets, and all other non-monetary assets including property, plant and equipment and right-of-use assets, for impairment on an annual basis by comparing the carrying value of the single cash-generating unit ("CGU") with the recoverable amount, the recoverable amount being based on an assessment of the CGU's value-in-use. The Group uses discounted cashflows from the CGU to determine the value-in-use. The Group sensitises these results and determines if there is an impairment of the non-monetary assets. Further details are provided in notes 5, 16, 17 and 18.

4 Revenue

Group revenue analysed by class of business

The Group represents a single operating segment being research and experimental development of biotechnology.

Group revenue analysed by geographical market

Revenue recognised in the income statement is analysed by geographical market as follows:

All assets are located in, and services delivered from, the United Kingdom.

An analysis of revenue by customer is set out in the table below:

During the year the Group recognised revenue from performance obligations satisfied during the year. All of the Group's contracts are for the delivery of service within the next 12 months for which the practical expedient in paragraph 121(a) of IFRS 15 applies. The entire revenue of the Group relates to its contracts with customers.

5 Impairments

During the year the following impairments have been recognised in the Income Statement:

Details of the impairment of property, plant and equipment on a specific basis is provided in note 17.

As a result of the ongoing trading conditions of the Group as at the year end, combined with the well-publicised risks to viability ahead of the fundraising described in note 39, the Directors have reviewed the carrying value of the cash-generating unit ("CGU") in light of the conditions prevailing as at 30 June 2023. As a result, there has been an impairment recognised across all non-monetary assets of the Group's single CGU, allocated first to specific intangible assets which are not ongoing, and subsequently pro-rated across the carrying value of all relevant assets.

6 Operating loss

Operating loss is stated after charging/(crediting):

The Group received funding from a government grant scheme and has complied with the conditions of the funding throughout the year/period.

8 Auditors' remuneration

Fees payable to the Group's auditors and associates:

9 Alternative Performance Measures

The Directors have used an Alternative Performance Measure ("APM") in the preparation of these financial statements. The consolidated income statement has presented adjusted earnings before interest, tax, depreciation, and amortisation ("Adjusted EBITDA"), which removes non-cash items including depreciation, amortisation, and share-based payments which are not relevant to the underlying cash generation of the business.

10 Employees

11 Directors' remuneration

Information about emoluments paid to Directors, including the highest paid Director, have been included in the Remuneration Committee report shown in the Annual Report.

12 Finance costs

Refer to notes 25 and 26 for more details on the Group's outstanding borrowings and leases.

13 Taxation

The actual credit for the year/period can be reconciled to the expected credit for the year/period based on the profit or loss and the standard rate of tax as follows:

The UK corporation tax rate was 19% until 31 March 2023 and 25% thereafter. In the disclosure above a hybrid rate of 20.5% has been used to pro-rate this change.

Deferred tax balances at the reporting date are measured at 25% (2022: 19%).

As at 30 June 2023 the Group had unrelieved tax losses of approximately £9,033,000 (2022: £3,805,000). A deferred tax asset has not been recognised in respect of these losses. Further details are given in note 28.

14 Earnings per share

.

Development costs capitalised are in relation to the generation of intellectual property and the patenting of such intellectual property, some of which are pending and thus not currently being amortised. As at the year end, £31,000 (2022 - £173,000) of patents are pending and not yet being amortised.

The Directors prepare forecasts which show the projected growth of the business and use of these assets, which forms a key part of the Group's future strategy. The forecasts include an assessment of the likely commercialisation of the technology based on current demand and anticipated market growth strategies, profiled on a discounted cash flow basis.

As a result of this cashflow forecast, and ongoing trading conditions prevalent at the year end, the Directors have recognised an impairment at 30 June 2023 as explained in note 5. This has been allocated across all non-monetary assets of the CGU, including property, plant and equipment, and right-of-use assets. The forecasts were for a specific period of 3 years, with 6% and 5% revenue growth in years 4 and 5, subsequently growing at 3% per annum.

The key unobservable inputs to the model were:

• A pre-tax discount rate of 34.50% (equating to a post-tax discount rate of 25.80%).
• A long term growth rate of 3.0%

The main forecasts assumed the going concern status of the Group through anticipated trading following a new fundraising round (as explained in note 39), and its planned use of funds. This fundraise was completed after the Group's year end in August 2023, which then secured the Group's status as a going concern. As the fundraise successfully completed after the year end, management prepared two scenarios addressing successful and unsuccessful completion of the fundraise. A weighting of 75:25 in favour of successful completion of the fundraise was applied in calculating the value in use of the CGU.

The Directors have considered sensitivities to revenue and discount rate in the cashflow forecast and the weighting applied between successful and unsuccessful fundraise post period end. If forecasted revenue in the cashflow forecast was reduced by more than 8%, this would result in a further impairment charge of £791,000, which would reduce the value in use of the CGU to nil. If weighting in favour of successful completion of the post period end fundraise was reduced to 50:50, this would result in an additional impairment of £650,000. If the post-tax discount rate was increased by 10% to 35.8% then this would result in an additional impairment of £645,000.

The Directors are confident that the value of the CGU as at the date of approval of the financial statements is significantly in excess of the carrying value as at 30 June 2023, as a result of the removal of the uncertainty relating to the fundraising event. However, this value has not been quantified, and cannot be utilised for the purpose of impairment testing as at 30 June 2023 under the requirements of IAS 36.

17 Property, plant and equipment

Transfers in the year represent a reclassification from right-of-use assets where the underlying lease has completed, with the assets being purchased and having remaining useful life.

The impairment reflects one floor of the Group's head office, where ongoing trading conditions mean that the space is not being fully utilised.

18 Right-of-use assets

Transfers in the year represent a reclassification to property, plant and equipment where the underlying lease has completed, with the assets being purchased and having remaining useful life.

19 Investments

Details of the subsidiaries can be found in note 20. The Directors believe that the carrying value of investments is supported by their underlying assets.

20 Subsidiaries

Details of the Company's subsidiaries at 30 June 2023 are as follows:

Each trading entity is a trading division of the Group and offers commercial services to customers.

21 Inventories

Inventories are stated after provision for impairment of £181,000 (2022: £nil).

22 Trade and other receivables

The Group's trade receivables have been reviewed for expected credit losses. Allowances have been made at the year end amounting to £nil (2022 - £nil), with movements on the allowances for doubtful debts as follows:

The expected credit loss provision fully relates to accrued income, which is included within 'other receivables' in the above table.

On the grounds that the above calculation is trivial in total with the exception of accrued income, no expected credit loss has been provided against trade receivables for at the current or comparative reporting period end date. The expected credit loss has been provided against accrued income in full.

23 Current trade and other payables

The carrying amount of these liabilities approximates to their fair value. Deferred income relates to amounts outstanding under existing customer contracts where the delivery of service has not been completed at the reporting date.

24 Non-current trade and other payables

Deferred income represents government grants where amounts to which the Group has an unconditional right are being recognised over a period of time related to an underlying asset.

25 Borrowings

The contractual terms of the Group's interest-bearing loans and borrowings are as follows:

Security of borrowings

Other loans represents a bounce-back loan of £29k which is repayable in fixed instalments until 2026. The loan is not secured. It also represents £40k of financing which is secured against assets which have been acquired and subsequently had funding raised against them. All interest rates payable are on an arm's length basis.

26 Lease liabilities

Amounts of right-of-use assets recognised and the movements during the year/period are disclosed in note 18.

The total cash outflow for leases during the year was £193,000 (2022: £395,000).

27 Provisions for liabilities

A provision was made in a prior period by the Directors to cover the expected contractual commitments on termination of the licence agreement to occupy the premises where the Group is based.

28 Deferred tax liabilities

No deferred tax balances were recognised in the prior year. The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the current reporting period:

As at 30 June 2023, the Group had unrecognised tax losses of approximately £9,033,000 (2022: £3,805,000). A deferred tax asset of £2,258,000 at 25% (2022: £723,000 at 19%) has not been recognised in respect of these losses due to uncertainty of timing of taxable profits.

29 Cash and cash equivalents

* Stated after provision for expected credit loss.

Interest rate risk

The Group adopts a policy of ensuring that there is an appropriate mix of fixed and floating rates in managing its exposure to changes in interest rates on borrowings. There is no material exposure to changes in interest rates at the reporting date.

Foreign currency risk

The main currencies in which the Group trades are the Pound Sterling and the US Dollar.

The Group is exposed in its trading operations to the risk of changes in foreign currency exchange rates and during the period the fluctuation in exchange rates has had an impact on reported results. As at 30 June 2023, the Group does not have any financial assets or liabilities denominated in a currency other than Pound Sterling, so is not exposure to any foreign currency risks at that date.

Credit risk

Credit risk predominantly arises from trade receivables and cash and cash equivalents. Credit risk attributable to trade receivables is managed by monitoring the aggregate amount and duration of exposure to any one customer depending upon their credit rating. The amounts presented in the Consolidated Statement of Financial Position are net of allowances for doubtful debts, estimated by the Group's management based on prior experience and their assessment of the current economic environment. The Group has no issues with the impairment of debts at the reporting date. The historic trading activity and the collection of balances due from customers does not indicate that impairment risk will be significant in the future.

All financial liabilities are measured at amortised cost.

Capital risk management

Effective interest rates and maturity analysis

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the Group in an independently administered fund. Contributions totalling £7,846 (2022: £7,043) were payable to the fund at the balance sheet date.

32 Issued share capital

During the year, 69,123 share options (as shown in note 34) were exercised for total consideration of £5,318. Subsequent to the year end, new share capital was issued, as disclosed in note 39.

33 Reserves

Retained earnings

Cumulative profit and loss net of distribution to owners.

Share premium

Share-based payments reserve

Used to recognise the grant date fair value of options issued to employees but not exercised.

Group reorganisation reserve

34 Share-based payments

2,662,212

The movement in options over ordinary shares of the Parent Company in the year were as follows:

On 15 December 2021, the Company granted to SPARK a warrant to subscribe for up to 689,417 Ordinary Shares (representing 1% of the Enlarged Share Capital) at the Placing Price. The exercise period commences on Admission and ends on the third anniversary of Admission.

No new share options or warrants have been granted in the current reporting year. Subsequent to the year end a number of options have been granted, and some replaced, as explained in note 39.

The total expense recognised in the income statement from equity-settled share-based payments is disclosed in note 6.

35 Cash used in operations

Other non-cash changes in the year ended 30 June 2023 represent a reclassification of certain borrowings from leases to more accurately represent the nature of the funding arrangements.

37 Controlling party

The Directors consider that there is no ultimate controlling party.

38 Related party transactions

Transactions with related parties

Key management personnel

The remuneration of key management personnel of the Group was:

39 Events after the reporting period end date

On 31 July 2023 the Directors announced a significant new fundraising event which resulted in a firm placing of 10,318,390 Ordinary shares for total proceeds of £0.1million, a conditional placing of 339,281,610 ordinary shares for total proceeds of £3.4million and a subscription of 10,400,000 ordinary shares for total proceeds of £0.1m, all before expenses. The conditional placing and subscription shares were approved at a General Meeting on 17 August 2023, and total net proceeds were £3.2m.

In connection with the fundraise, the following Board changes took place on passing of the resolutions at the General Meeting on 17 August 2023

• Dr Ian Gilham, Dr Rob Quinn, Dr John Richards and Angela Hildreth resigned.
• Dr Arron Tolley was reappointed to the Board as Director and Chief Technical Officer
• Dr David Bunka remained as Director and his role changed to Chief Scientific Officer
• Steve Hull was appointed as Executive Chairman.
• Dean Fielding and Adam Hargreaves were appointed as Independent Non-Executive Directors

On 19 September 2023 the Group completed a further fundraising through the issue of 28,251,956 ordinary shares by way of a subscription and placing. This fundraise resulted in total gross proceeds of £311,000 before expenses.

Grant of new share options

On 9 October 2023 the Group granted 116,835,918 options over its Ordinary share capital ("the Scheme") which exercise at a price of 1p where certain conditions are met. The options are designed to provide a material incentive to the Directors and other staff, but on stretching revenue and share price performance criteria, which include achieving returns of at least 4-times and up to 50-times the issue price within a 10 year period. All options have an exercise price of 1p per share.

The total fair value of the Scheme has been determined to be £1,088,000, based on a Monte-Carlo methodology taking into account the market conditions of the price hurdle. However, the Scheme also includes non-market conditions related to a requirement to have performance of the Group to meet expectations (which will in each case require consultation with the Group's nominated advisor). As a result, the actual fair value charged to profit and loss is likely to be substantially lower than this, although the actual financial impact cannot be quantified until such results are known.

As part of the grant of options under the Scheme, Dr Arron Tolley has agreed to the cancellation of 700,000 existing options with an exercise price of 7.675p each and Dr David Bunka has agreed to the cancellation of 32,600 and 61,400 existing options with exercise prices of 15.54p and 7.675p each respectively.