TIDMPOLX
RNS Number : 7908A
Polarean Imaging PLC
04 June 2021
Polarean Imaging Plc
("Polarean" or the "Company")
Final Results for the Year Ended 31 December 2020
Notice of Annual General Meeting
Polarean Imaging plc (AIM: POLX), the medical - imaging
technology company, with an investigational drug - device
combination product for magnetic resonance imaging (MRI), announces
its audited final results for the year ended 31 December 2020 .
In addition, Polarean confirms that the Annual Report and
Accounts for the year ended 31 December 2020, the Notice of the
Annual General Meeting ("AGM") and a Form of Proxy are now
available on the Company's website (
http://www.polarean-ir.com/content/investors/annual-reports.asp )
and will be posted to shareholders shortly.
Polarean's AGM will be held at 2500 Meridian Parkway, Suite 175,
Durham, NC 27713, USA at 2pm BST / 9am EST on 13 July 2021.
Highlights
-- Positive top-line results from the Phase III clinical trials
using hyperpolarised (129) Xenon gas, where both trials met their
primary endpoint
-- Raised GBP8.4 million (gross), including a GBP2.2 million
subscription from new strategic investor Bracco Imaging S.p.A.
("Bracco")
-- Appointment of Jonathan Allis as Non-Executive Chairman
-- Appointment of Cyrille Petit as Non-Executive Director and representative of Bracco
-- Completion of a pre-New Drug Application ("NDA") meeting with the United States Food and Drug Administration ("FDA")
-- Acceptance of the NDA for review by the FDA, with a target
Prescription Drug User Fee Act ("PDUFA") action date of 5 October
2021
-- Net cash of US$6.3 million as of 31 December 2020
Post-period end
-- Raised GBP27 million gross proceeds in an oversubscribed
financing, including continued support of strategic investors,
Bracco Imaging S.p.A and Nukem Isotopes GmbH as well as
institutional investor Amati AIM VCT plc, joined by several new UK
and US institutional investors.
-- Appointment of Chuck Osborne, Chief Financial Officer, to the Board
-- Completion of Mid-Cycle Review of NDA submission with FDA
-- Publication of first peer reviewed COVID research by
Professor Fergus Gleeson at the University of Oxford
-- Additional research unit order for a 9820 Xenon Polariser
system from the University of British Columbia in Vancouver,
Canada.
Richard Hullihen, CEO of Polarean, commented: "It has been a
strong year for Polarean, and we have achieved some significant
milestones during the period beginning with the positive readout of
our Phase III clinical trials in early 2020. This was followed
quickly by a successful placing and subscription in April 2020, and
a further oversubscribed fundraise in March 2021 which was needed
to fund sales and marketing expenses to build the commercial team
and infrastructure, to support ongoing clinical trial, regulatory
and medical affairs costs, to support the continued investment in
research and development and to provide additional working capital
and for general corporate purposes.
"We have made significant Board changes to reflect our progress
and we're very excited to have a target PDUFA date from the FDA. On
behalf of the whole Board, I would like to thank our employees and
shareholders for their ongoing support, and we look forward to
further positive updates throughout the rest of the year."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
Enquiries:
Polarean Imaging plc www.polarean.com / www.polarean-ir.com
Richard Hullihen, Chief Executive Officer Via Walbrook PR
Jonathan Allis, Chairman
Stifel Nicolaus Europe Limited (NOMAD and
Sole Corporate Broker) +44 (0)20 7710 7600
Nicholas Moore / Ben Maddison / Samira Essebiyea (Healthcare
Investment Banking)
Nick Adams / Fred Walsh (Corporate Broking)
Walbrook PR Tel: +44 (0)20 7933 8780 or polarean@walbrookpr.com
Paul McManus / Anna Dunphy Mob: +44 (0)7980 541 893 / +44 (0)7879 741
001
About Polarean (www.polarean.com)
The Company and its wholly owned subsidiary, Polarean, Inc.
(together the "Group") are revenue-generating, investigational
drug-device combination companies operating in the high-resolution
medical imaging research space.
The Group develops equipment that enables existing MRI systems
to achieve an improved level of pulmonary function imaging and
specialises in the use of hyperpolarised Xenon gas ((129) Xe) as an
imaging agent to visualise ventilation. (129) Xe gas is currently
being studied for visualisation of gas exchange regionally in the
smallest airways of the lungs, across the alveolar tissue barrier,
and into the pulmonary bloodstream.
In October 2020, the Group submitted a New Drug Application
("NDA") to the FDA for hyperpolarised (129) Xe used to evaluate
pulmonary function and to visualise the lung using MRI. In December
2020, the Group received confirmation of acceptance of its NDA by
the FDA, with a target PDUFA action date of 5 October 2021.
The Group operates in an area of significant unmet medical need
and the Group's technology provides a novel investigational
diagnostic approach, offering a non-invasive and radiation-free
functional imaging platform. The annual burden of pulmonary disease
in the US is estimated to be over US$150 billion.
Chairman's Statement
The critical achievements for the Company for 2020 were, of
course, successful completion of the New Drug Application and its
submission and acceptance for review by the US Food & Drug
Administration. The Company now moves to process of preparing for
commercial launch. Meanwhile, current events have made clear that
medicine is still not fully equipped to analyse and understand the
many ways that pulmonary function can be affected by disease. The
Company looks forward to working with its growing installed base of
luminary researchers to help understand the diagnosis, methods of
action and therapies for all pulmonary disease.
The Company has been very pleased with the results of the
Placing, Subscription and Open Offer conducted shortly after
appointing Stifel Nicolaus Europe Limited as its nominated adviser
and broker. The results speak for themselves, but completing an
oversubscribed GBP27 million Placing, Subscription and Open Offer
is a very positive outcome for the Company.
Polarean continues its explorations with the pharma industry.
Our initial expectations of synergies in development and clinical
trials have been further characterised owing to the specific
reproducibility of our technology versus currently used endpoints
in development and clinical trials, and we look forward to
exploring these potential relationships more fully as we develop
our own infrastructure and resource base to better match their
requirements.
Our primary focus for the coming year will be the planning and
preparation for commercial launch and then initiating the launch
post approval. This is an important phase in company development,
we have resource and skilled service providers underway in this
effort and we look forward to the unique combination of technology
and opportunity that define the future for hyperpolarised noble gas
imaging of pulmonary function.
The Company has been fortunate in its ability to attract and
retain long-term professional investors who I thank for their
support. I would also like to thank Bracco Imaging for their
commitment to the Company and participation in the recent equity
raise. I can say they have specific insight into this global market
for the technologies that so dramatically enhance the contributions
of medical imaging equipment to medicine and patient care, and they
have brought those to our Board and share them openly.
As we move from research into daily clinical use, we look
forward to furthering the global understanding of the COVID-19
medical case by providing the types of quantitative information
necessary for fully understanding its mechanisms and post-infection
consequences.
On behalf of the Board, I thank the employees, stakeholders and
shareholders for their support, without which none of this would
have been possible.
Jonathan Allis
Non-Executive Chairman
2 June 2021
Chief Executive Officer's Statement
2020 - Year of Accomplishment of Critical Goals
Having completed its Phase 3 trials successfully, the Group
spent the majority of the year focused on the creation and
submission of its New Drug Application ("NDA"). This submission
includes not only the Clinical Trial and Drug information but also
the submission on our polariser QA station and drug delivery
device. Making the submission and having the US Food & Drug
Administration ("FDA") accept it for review are major milestones
toward approval of our NDA by the FDA and ultimately toward
commercialisation of hyperpolarised noble gas imaging for the
assessment of pulmonary function.
Advisers
The company appointed a new joint Broker, Stifel Nicolaus Europe
Limited, in December 2020, and followed that up by appointing them
as the Company's nominated adviser and sole broker early in 2021.
This has had a significant effect in financial markets and in the
Company's share register.
The Opportunity
The US healthcare system's annual burden of pulmonary disease
continues unabated costing US$150 billion [each year] and our
Directors still see a tremendous opportunity to bring our
technology's quantitative, reproducible, non-invasive method for
diagnostic and therapeutic guidance to medicine. With regard to the
global COVID-19 pandemic, initial grants have been awarded to
several of our users and collaborators in the UK and North America
and promising preliminary results are emerging and finding their
way into publications. We have refined and extended our development
of the healthcare economic analyses of our technology to support
the adoption by providers of hyperpolarised noble gas imaging,
working with KOL's and experts in the field. Over the planning
horizon of the first 48 months post commercial launch, the Group
maintains its intent to address the high end of the US academic and
teaching hospital market segment, which comprises approximately the
top 1000 institutions nationally having multiple Centres of
Excellence in Pulmonary Medicine and Radiology. The combined
addressable capital equipment market there for our products
approaches US$500M in equipment sales alone, with the consequent
drug sales following as laid out in recently published
research.
While working to achieve FDA approval for clinical use, Polarean
continues to serve the medical imaging research market by providing
xenon polarisers to enable functional MRI of the pulmonary system.
This brings dynamic, reproducible, high-resolution, regional,
quantitative, image-based information to pulmonary physicians and
researchers whose best alternative tool is spirometry, with its
limitations in use for measurement of expired breath. Over the last
several years we expanded our installed base of systems at luminary
academic research centres to include the Universities of Kansas,
Iowa and British Columbia. In addition, we received an order for a
polariser system from MD Anderson, All of these organizations are
well known for their research and clinical applications of emerging
technologies.
Our Organisation
The Group encountered material changes in its shareholder base
during the year and as a result its Board composition. We closed a
round of financing totalling GBP8.4 million which included
investment by an additional strategic investor, Bracco Diagnostics,
a global manufacturer of imaging contrast agents, and which brought
with it appointment of another non-executive director Mr. Cyrille
Petit, Chief Corporate Development Officer there. We are very happy
to have someone with Mr. Petit's background on the Board.
Our Operations
In 2020, our contract manufacturer built 3 of our 9820
polarisers systems. In addition, we brought on a second contract
manufacturer to help us meet anticipated demand from both the
research and clinical market, once we receive our anticipated FDA
approval. We see and welcome the expansion of our installed base in
top tier institutions. We made planned advances in our quality
systems and engineering infrastructure as we move toward maturing
in our new regulated environment.
R&D
We continued to invest in our intellectual property portfolio
during the year. Filings in other territories and additional
progress in existing patent filings involving gas exchange and
pulmonary vascular disease were made. Our group has continued to
push the design of the systems forward, with key advances in ease
of use and manufacturability making progress to plan. We made
valuable progress on our software and image display projects, which
will come into play in the near future.
2020 Financial results
Broadly speaking, we achieved our plan in 2020, with revenues
slightly below plan and expenses also diligently managed to below
plan. We raised GBP8.4 million in April 2020 in a placing designed
to carry us through our submission approval. We have maintained our
pricing and margins throughout the year on equipment, albeit timing
of grant receipts slightly diluted overall margins. It is still the
case that the majority of our research systems are procured through
grant mechanisms and while the outcomes are typically known as
their process unfolds, the ultimate fiscal timing of these projects
is difficult to predict with certainty as many involve public
procurement cycles.
2021 and Beyond
We cautiously plan to receive regulatory approval the second
half of 2021. In the meantime, we continue to collaborate with
researchers in the US and abroad and look to expand our installed
base of research systems, and have a pipeline supporting that plan.
The exciting new developments in COVID-19, cardiology and pulmonary
vascular disease are deepening, and our knowledge base about these
conditions is expanding.
Most exciting is the additional investment we received in our
oversubscribed GBP27 million placing and open offer as led by
Stifel earlier this year. This raise will fund our
commercialisation and launch programmes at a high level and provide
for earlier initiation of follow-on trials and market
exploration.
The " (129) Xe MRI Clinical Trials Consortium" is continuing the
studying of the application of our technology to the case of post
infection COVID-19 patients to assess the long-term effects and
case management of these patients. We are standardising performance
and tools across the installed base to facilitate this.
We continue to explore opportunities with potential strategic
partners in pharma and in other geographic markets that could lead
to important developments in new applications and uses for our
technology, expansion into new territories, and which may bring
economic benefits to the group going forward.
Polarean is fortunate to have an outstanding collection of
world-class collaborators and customers in both the US and Europe.
Additionally, we support the " (129) Xe MRI Clinical Trials
Consortium" and the crucial work they do in collaborative research,
training investigators, providing infrastructure for evaluating new
techniques, and multi-institution sharing of magnetic resonance
(MR) techniques and image analysis methods. In addition, we
continue to develop and expand our working relationships with MRI
systems manufacturers and exclusive relationships with global
industrial gas suppliers, all key to our future as we scale the
business.
Polarean has a dedicated team of professionals without whose
efforts these accomplishments would not be possible. On behalf of
the entire staff of Polarean Imaging, I would like to thank you for
their support of the Group, and we look forward to continuing to
develop and deliver this critical lifesaving and life-improving
technology to physicians and patients everywhere.
Richard Hullihen
Chief Executive Officer
2 June 2021
Consolidated Statement of Comprehensive Income
2020 2019
Notes US$ US$
Revenue 4 1,056,766 2,301,093
Cost of sales (346,300) (925,612)
Gross profit 710,466 1,375,481
Administrative expenses (5,049,246) (6,010,119)
Depreciation 11 (150,224) (63,121)
Amortisation 12 (734,058) (683,873)
Selling and distribution expenses (917,783) (324,791)
Share-based payment expense 19 (474,716) (305,747)
Total administrative expenses (7,326,027) (7,387,651)
Operating loss 6 (6,615,562) (6,012,170)
Finance income 7 100,769 508
Finance expense 7 (19,730) (91,678)
Loss before tax (6,534,523) (6,103,340)
Taxation 10 - -
Loss for the year and total other comprehensive
expense (6,534,523) (6,103,340)
Loss per share
------------------------- -------- --------
Basic and diluted (US$) 9 (0.044) (0.057)
------------------------- -------- --------
The results reflected above relate to continuing activities.
There are no items of other comprehensive income for the year
other than the loss above and therefore no separate statement of
other comprehensive income has been presented.
Consolidated Statement of Financial Position
Notes 2020 2019
US$ US$
ASSETS
Non-current assets
Property, plant and equipment 11 271,264 355,958
Intangible assets 12 2,810,694 3,427,547
Right-of-use asset 24 184,213 98,263
Trade and other receivables 14 5,539 5,539
3,271,710 3,887,307
-------------------------------- ------ ------------- -------------
Current assets
Inventories 15 977,924 554,211
Trade and other receivables 14 348,067 636,783
Cash and cash equivalents 16 6,282,665 1,961,869
-------------
7,608,656 3,152,863
-------------------------------- ------ ------------- -------------
TOTAL ASSETS 10,880,366 7,040,170
-------------------------------- ------ ------------- -------------
EQUITY AND LIABILITIES
Equity attributable to holders
of the parent
Share capital 17 78,200 55,776
Share premium 18 23,840,571 13,659,912
Group re-organisation reserve 18 7,813,337 7,813,337
Share-based payment reserve 19 1,845,450 1,370,734
Accumulated losses 18 (24,844,204) (18,309,681)
-------------------------------- ------ ------------- -------------
8,733,354 4,590,078
-------------------------------- ------ ------------- -------------
Non-current liabilities
Deferred income 21 219,954 192,817
Lease liability 24 91,609 50,455
Contingent consideration 20 316,000 316,000
627,563 559,272
-------------------------------- ------ ------------- -------------
Current liabilities
Trade and other payables 22 1,348,866 1,773,582
Lease liability 24 129,819 70,914
Deferred income 21 40,763 46,324
1,519,449 1,890,820
-------------------------------- ------ ------------- -------------
TOTAL EQUITY AND LIABILITIES 10,880,366 7,040,170
-------------------------------- ------ ------------- -------------
These Financial Statements were approved and authorised for
issue by the Board of Directors on 2 June 2021 and were signed on
its behalf by:
Jonathan Allis
Non-Executive Chairman
Company Statement of Financial Position
Notes 2020 2019
US$ US$
ASSETS
Non-current assets
Investment in subsidiary 13 4,342,848 4,342,848
4,342,848 4,342,848
-------------------------------- ------ ------------ ------------
Current assets
Trade and other receivables 14 20,454,183 11,543,854
Cash and cash equivalents 16 911,271 56,765
------------
21,365,454 11,600,619
-------------------------------- ------ ------------ ------------
TOTAL ASSETS 25,708,302 15,943,467
-------------------------------- ------ ------------ ------------
EQUITY AND LIABILITIES
Equity attributable to holders
of the parent
Share capital 17 78,200 55,776
Share premium 18 23,840,571 13,659,912
Merger reserve 18 4,322,527 4,322,527
Share-based payment reserve 19 1,540,419 1,065,703
Accumulated losses 18 (4,122,345) (3,213,450)
-------------------------------- ------ ------------ ------------
25,659,372 15,890,468
-------------------------------- ------ ------------ ------------
Current liabilities
Trade and other payables 22 48,930 52,999
48,930 52,999
-------------------------------- ------ ------------ ------------
TOTAL EQUITY AND LIABILITIES 25,708,302 15,943,467
-------------------------------- ------ ------------ ------------
As permitted by section 408 of the Companies Act 2006, no
separate statement of Comprehensive Income is presented in respect
of the parent Company. The loss for the financial year dealt with
in the financial statements of the parent Company was US$ 908,895
(2019: US$939,516).
These financial statements were approved and authorised for
issue by the Board of Directors on 2 June 2021 and were signed on
its behalf by:
Jonathan Allis
Non-Executive Chairman
Consolidated Statement of Changes in Equity
Share-based Group re-org Accumulated
Share capital Share premium payment reserve reserve losses Total equity
US$ US$ US$ US$ US$ US$
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
As at 1 January
2019 46,427 11,063,075 1,078,335 7,813,337 (12, 219,689) 7,784,485
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
Comprehensive
income
Share based
payment -
lapsed share
options - - (13,348) - 13,348 -
Loss for the
year - - - - (6,103,340) (6,103,340)
Transactions
with owners
Issue of shares 6,349 2,756,289 - - - 2,762,638
Share issue
costs - (159,452) - - - (159,452)
Share-based
payment expense - - 305,747 - - 305,747
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
As at 31
December 2019
(audited) 55,776 13,659,912 1,370,734 7,813,337 (18,309,681) 4,590,078
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
Comprehensive
income
Loss for the
year - - - - (6,534,523) (6,534,523)
Transactions
with owners
Issue of shares 22,424 10,703,373 - - - 10,725,797
Share issue
costs - (522,714) - - - (522,714)
Share-based
payment expense - - 474,716 - - 474,716
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
As at 31
December 2020 78,200 23,840,571 1,845,450 7,813,337 (24,844,204) 8,733,354
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
Company Statement of Changes in Equity
Share-based Accumulated
Share capital Share premium payment reserve Merger reserve losses Total equity
US$ US$ US$ US$ US$ US$
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
As at 1 January
2019 49,427 11,063,075 773,304 4,322,527 (2,287,282) 13,921,051
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
Comprehensive
income
Share based
payment -
lapsed - - (13,348) - 13,348 -
Loss for the
year - - - - (939,516) (939,516)
Transactions
with owners
Issue of shares 6,349 2,756,289 - - - 2,762,638
Share issue
costs - (159,452) - - - (159,452)
Share-based
payment expense - - 305,747 - - 305,747
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
As at 31
December 2019 55,776 13,659,912 1,065,703 4,322,527 (3,213,450) 15,890,468
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
Comprehensive
income
Loss for the
year - - - - (908,895) (908,895)
Transactions
with owners
Issue of shares 22,424 10,703,373 - - - 10,725,797
Share issue
costs - (522,714) - - - (522,714)
Share-based
payment expense - - 474,716 - - 474,716
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
As at 31
December 2020 78,200 23,840,571 1,540,419 4,322,527 (4,122,345) 25,659,372
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
Consolidated Statement of Cash Flows
2019
2020 US$ US$
--------------------------------------------------- ----------- -----------
Cash flows from operating activities
Loss before tax (6,534,522) (6,103,340)
Adjustments for non-cash/non-operating items:
Depreciation of plant and equipment 150,224 63,121
Amortisation of intangible assets and right-of
use-asset 734,058 683,873
Share-based payment expense 474,716 305,747
Finance expense 19,730 91,678
Finance income (100,769) (508)
Operating cash outflows before movements in
working capital (5,256,563) (4,959,429)
--------------------------------------------------- ----------- -------------
(Increase)/decrease in inventories (423,093) 97,570
(Increase)/decrease in trade and other receivables 288,096 (14,737)
Decrease in trade and other payables (424,714) (285,073)
Increase in deferred income 21,576 595,961
--------------------------------------------------- ----------- -------------
Net cash used in operations (5,794,698) (4,565,708)
--------------------------------------------------- ----------- -------------
Cash flows from investing activities
Purchase of plant and equipment (65,531) (401,327)
Net cash used in investing activities (65,531) (401,327)
--------------------------------------------------- ----------- -------------
Cash flows from financing activities
Issue of shares 10,725,797 6,373,919
Cost of issue (522,714) (159,452)
Interest paid on lease liabilities (19,730) (91,678)
Interest received 100,769 508
Principal elements of lease payments (103,097) (69,993)
Net cash generated by financing activities 10,181,025 6,053,304
--------------------------------------------------- ----------- -------------
Net increase in cash and cash equivalents 4,320,796 1,086,268
--------------------------------------------------- ----------- -------------
Cash and cash equivalents at the beginning of
year 1,961,869 875,601
--------------------------------------------------- ----------- -------------
Cash and cash equivalents at end of year 6,282,665 1,961,869
--------------------------------------------------- ----------- -------------
Company Statement of Cash Flows
Year ended Year ended
31 December 31 December
2020 2019
US$ US$
-------------------------------------------------- ------------- -------------
Cash flows from operating activities
Loss before tax (908,895) (939,516)
Adjustments for non-cash/non-operating items:
Share-based payment expense 474,716 305,747
Interest received (100,358) (508)
-------------------------------------------------- ------------- -------------
Operating cash outflows before movements
in working capital (534,537) (634,277)
-------------------------------------------------- ------------- -------------
Decrease in trade and other receivables 42,372 (6,275)
Increase in trade and other payables (4,068) 24,824
-------------------------------------------------- ------------- -------------
Net cash used by operations (496,233) (615,728)
-------------------------------------------------- ------------- -------------
Cash flows from financing activities
Issue of shares 10,725,797 6,373,918
Cost of issue (522,714) (159,452)
Interest received 100,358 508
Loans to intercompany (8,952,702) (5,778,247)
Net cash generated by financing activities 1,350,739 436,727
-------------------------------------------------- ------------- -------------
Increase/(decrease) in cash and cash equivalents 848,506 (179,001)
-------------------------------------------------- ------------- -------------
Cash and cash equivalents at the beginning
of period 56,765 235,766
-------------------------------------------------- ------------- -------------
Cash and cash equivalents at end of period 911,271 56,765
-------------------------------------------------- ------------- -------------
Notes to the Financial Statements
1. General information
The Company is incorporated in England and Wales under the
Companies Act 2006. The registered number is 10442853 and its
registered office is at 27-28 Eastcastle Street, London, W1W 8DH.
The Company is listed on the AIM market of the London Stock
Exchange.
The Company is the parent company of Polarean, Inc (the
"Subsidiary", together the "Group"). The principal activity of the
Group is developing next generation medical imaging technology. The
Subsidiary is incorporated in the United States of America and has
a registered office of 2500 Meridian Parkway #175, Durham, NC
27713, USA.
2. Adoption of new and revised International Financial Reporting Standards
Standards and interpretations adopted during the year
Information on new standards, amendments and interpretations
that are relevant to the Group's annual report and accounts is
provided below.
-- Definition of Material (Amendments to IAS 1 and IAS 8);
-- Definition of a Business (Amendments to IFRS 3); and
-- Interest Rate Benchmark Reform (IBOR) reform Phase 1
(Amendments to IFRS 9, IAS 39 and IFRS 7).
These standards have no material impact on the Group.
Standards, amendments and interpretations that are not yet
effective
There are a number of standards, amendments to standards, and
interpretations which have been issued by the IASB that are
effective in future accounting periods that the Company has decided
not to adopt early. The most significant of these are as follows,
which are all effective for the period beginning 1 January
2022:
-- Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37);
-- Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16);
-- Annual Improvements to IFRS Standards 2018-2020 (Amendments
to IFRS 1, IFRS 9, IFRS 16 and IAS 41); and
-- References to Conceptual Framework (Amendments to IFRS 3).
In January 2020, the IASB issued amendments to IAS 1, which
clarify the criteria used to determine whether liabilities are
classified as current or non-current. These amendments clarify that
current or non-current classification is based on whether an entity
has a right at the end of the reporting period to defer settlement
of the liability for at least twelve months after the reporting
period. The amendments also clarify that 'settlement' includes the
transfer of cash, goods, services, or equity instruments unless the
obligation to transfer equity instruments arises from a conversion
feature classified as an equity instrument separately from the
liability component of a compound financial instrument. The
amendments were originally effective for annual reporting periods
beginning on or after 1 January 2022. However, in May 2020, the
effective date was deferred to annual reporting periods beginning
on or after 1 January 2023.
The Group is currently assessing the impact of these new
accounting standards and amendments.
3. Significant accounting policies
Basis of preparation
These financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union ("IFRS") and under the historical cost convention,
as modified by the use of fair value for financial instruments
measured at fair value. The financial statements are presented in
United States Dollars ("US$") except where otherwise indicated.
The principal accounting policies adopted in the preparation of
the financial statements are set out below. The policies have been
consistently applied to all the years presented, unless otherwise
stated.
Going concern
The Directors consider the going concern basis of preparation to
be appropriate in preparing the financial statements.
The Group is in its development stage and has not yet moved to
full commercial exploitation of its IP. During the year ended 31
December 2020 the Group recorded a loss after tax of US$6,534,523
(2019: loss of US$6,103,340) and a net cash outflow from operating
activities of US$5,794,698 (2019: US$4,565,708).
In considering the appropriateness of this basis of preparation,
the Directors have reviewed the Group's working capital forecasts
for a minimum of 12 months from the date of the approval of this
financial information. Based on their consideration the Directors
have reasonable expectation that the Group has adequate resources
to continue for the foreseeable future and that carrying values of
intangible assets are supported. Thus, they continue to adopt the
going concern basis of accounting in preparing this financial
information.
Management has implemented logistical and organisational changes
to underpin the Group's resilience to COVID-19, with the key focus
being protecting all personnel, minimising the impact on critical
work streams and ensuring business continuity. COVID-19 may impact
the Group in varying ways, which could lead to a direct bearing on
the Group's ability to generate future cash flows for working
capital purposes. Management are closely monitoring commercial and
technical aspects of the Group's operations to mitigate the impact
from the COVID-19 pandemic. The inability to gauge the length of
such disruption further adds to this uncertainty. For these reasons
the generation of sufficient operating cash flows remain a risk.
Management believes the Group will generate sufficient working
capital and cash flows to continue in operational existence and
will have the ongoing support of its shareholders, if required, for
the foreseeable future. As set out in note 29, subsequent to the
reporting date the Company raised new equity finance of GBP27
million before associated costs.
Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown in share
premium as a deduction from the proceeds.
Government and other grants
Grants are not recognised until there is a reasonable assurance
that the Group will comply with the conditions attaching to them
and that the grants will be received. Grants are treated as
deferred income and released to the income statement on the
achievement of the relevant performance criteria.
Inventory
Inventories are measured at the lower of cost and net realisable
value. The cost of inventories is based on the weighted average
cost principle and includes expenditure incurred in inventories,
adjusted for rebates, and other costs incurred in bringing them to
their existing location.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits with an original maturity of three months or less.
3. Significant accounting policies continued
Functional and presentation currency
Items included in the financial statements of the Group are
measured using the currency of the primary economic environment in
which the Group operates ("the functional currency"). The financial
statements are presented in United States Dollars (US$) which is
also the Group's functional currency.
Foreign currencies
Transactions in foreign currencies are initially recorded by the
Group's entities at their respective functional currency spot rates
at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign
currencies are translated at the functional currency spot rates of
exchange at the reporting date.
Differences arising on settlement or translation of monetary
items are recognised in profit or loss.
Non-monetary items that are measured in terms of historical cost
in a foreign currency are translated using the exchange rates at
the dates of the initial transactions. Non-monetary items measured
at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value is determined. The
gain or loss arising on translation of non-monetary items measured
at fair value is treated in line with the recognition of the gain
or loss on the change in fair value of the item (i.e., translation
differences on items whose fair value gain or loss is recognised in
OCI or profit or loss are also recognised in OCI or profit or loss,
respectively).
Basis of consolidation
The consolidated financial statements are for the year ended 31
December 2020. They have been prepared in accordance with the
requirements of International Financial Reporting Standards (IFRS)
as adopted by the European Union (EU) and with those parts of the
Companies Act 2006 applicable to companies reporting under
IFRS.
The measurement bases and principal accounting policies of the
Group are set out below. On 30 May 2017 Polarean Merger-Sub, Inc.,
a Subsidiary of the Subsidiary, completed a merger process under
which it acquired substantially all of the assets of m2m Imaging
Corp ("m2m"), a portfolio company of Amphion Innovations plc
engaged in the development of high-performance MRI RF coils for the
global research market, primarily in micro-imaging. By 2016 m2m had
been inactive for several years due to an inability to raise funds.
At the date of the merger the assets of m2m were its technology and
patents. The merger was affected by way of court sanction in the
process of which the Subsidiary acquired, through a special purpose
entity, Polarean Merger Sub, Inc. the assets of another special
purpose entity, m2m Merger Sub, Inc., with m2m Merger Sub, Inc.
being the surviving entity. After the reporting date, on 1
September 2017, m2m Merger Sub, Inc. was merged into the Subsidiary
with the Subsidiary being the surviving entity, the effect being
that m2m Merger Sub, Inc. was collapsed, and the Subsidiary had
acquired the m2m assets.
As part of the arrangements for the merger 576,430 shares in the
Subsidiary were issued to the former shareholders in m2m with the
intention that all parties would exchange their stock in Polarean,
Inc. for shares in the Group on a pro rata basis as soon as
practicable.
The Directors consider the merger between the Subsidiary and m2m
Acquisition, Inc. as a consequence of which the group acquired the
exclusive worldwide rights to m2m's technology and patents does not
meet the definition of an acquisition of a business as set out in
IFRS3 and has therefore been accounted for as the acquisition of an
asset or a group of assets that does not constitute a business.
IFRS 3 requires that in such cases the acquirer shall identify
and recognise the individual identifiable assets acquired
(including those assets that meet the definition of, and
recognition criteria for, intangible assets in IAS 38 Intangible
assets) and to allocate the cost of the individual identifiable
assets and liabilities on the basis of their relative fair values
at the date of purchase. Such a transaction or event does not give
rise to goodwill.
The provisional estimate of the fair value of the assets
acquired under the merger arrangement of US$4,999,996 represents
the aggregate estimated value of the financial obligations of the
former m2m shareholders which were converted into equity in m2m
prior to the merger agreement.
3. Significant accounting policies continued
The Directors consider the acquisition of the entire issued
common stock of the Subsidiary by the Company in exchange for
equivalent equity participation in the Company to be a group
re-organisation and not a business combination and to fall outside
the scope of IFRS 3. Having considered the requirements of IAS 8
and the relevant UK and US guidance, the transaction has been
accounted for on a merger or pooling of interest basis as if both
entities had always been combined, using book values, with no fair
value adjustments made nor goodwill recognised.
Revenue recognition
Revenue comprises the fair value of the sale of goods and
rendering of services to external customers, net of applicable
sales tax, rebates, promotions and returns.
Contracts and obligation
The majority of customer contracts have three main elements that
the Group provides to the customer:
- Sale of polarisers;
- Sale of parts and upgrades; and
- Provision of service.
The sale of polarisers is seen as a distinct performance
obligation and revenue is recognised at a point in time. The
customer can benefit from the use of the polarisers when supplied
and is not reliant on the Group to provide the parts and upgrades
or service, and therefore revenue from the sale of polarisers is
recognised in full when supplied to the customer.
The second performance obligation is the sale of parts and
upgrades. The customer can benefit from the use of the parts and
upgrade when supplied and is not reliant on the Group to provide
the service, and therefore revenue from the sale of parts and
upgrades is recognised in full when supplied to the customer.
The third performance obligation is the provision of preventive
maintenance service. Revenue from the provision of preventive
maintenance service is recognised in the period in which the
services are provided over the life of the contract.
Determining the transaction price
The transaction price is determined as the fair value of the
Group expects to receive over the course of the contract.
There are no incentives given to customers that would have a
material effect on the financial statements.
Allocate the transaction price to the performance obligations in
the contract
The allocation of the transaction price to the performance
obligations in the contract is non-complex for the Group. There is
a fixed unit price for each product or service sold. Therefore,
there is limited judgement involved in allocating the contract
price to each unit ordered.
Recognise revenue when or as the entity satisfies its
performance obligations
The overarching terms are consistent in each contract.
The sale of polarisers is seen as a distinct performance
obligation and revenue is recognised at a point in time, when
supplied to the customer, as the customer can benefit from the use
of the polarisers when supplied.
The sale of parts and upgrades is seen as a distinct performance
obligation and revenue is recognised at a point in time, when
supplied to the customer, as the customer can benefit from the use
of the parts and upgrade when supplied.
The provision of service is seen as a distinct performance
obligation and revenue is recognised as the Group provides these
services for the duration of the contract, i.e. over time. Any
unexpired portion of a service contract or payment received in
advance in respect of service contracts either partially completed
or not started, are included in deferred income and released over
their remaining term.
3. Significant accounting policies continued
Property, plant and equipment
Owned assets
Items of property, plant and equipment are stated at cost or
deemed cost less accumulated depreciation and impairment losses.
Cost includes the original purchase price of the asset and the
costs attributable to bringing the asset to its working condition
for its intended use. When parts of an item of property, plant and
equipment have different useful lives, those components are
accounted for as separate items of property, plant and
equipment.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably.
Depreciation
Depreciation is charged to profit or loss on a straight-line
basis over the estimated useful lives of each part of an item of
property, plant and equipment. The estimated useful lives are as
follows:
-- Computer and IT equipment - 33% straight line
-- Leasehold improvements - 20% straight line
-- Laboratory equipment - 20% straight line
The residual values, useful lives and depreciation methods are
reviewed, and adjusted if appropriate, or if there is an indication
of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognised within "other
operating income" in the statement of comprehensive income.
Intangible Assets
Patents and related rights which are acquired through a business
combination, are assessed by reviewing their net present value of
future cash flows. Patents are currently amortised over their
useful life, not exceeding 10 years.
Internally generated intangible assets - research costs are
costs incurred in research activities and are recognised as an
expense in the period in which they are incurred. An internally
generated intangible asset arising from the development of
commercial technologies is recognised only if all of the following
conditions are met:
-- it is probable that the asset will create future economic benefits;
-- the development costs can be measured reliably;
-- technical feasibility of completing the intangible asset can be demonstrated;
-- there is the intention to complete the asset and use or sell it;
-- there is the ability to use or sell the asset; and
-- adequate technical, financial and other resources to complete
the development and to use or sell the asset are available.
At this time the Directors consider that the Group does not meet
all of those conditions and development costs are therefore
recorded as expense in the period in which the cost is
incurred.
Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount
by which the asset's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset's fair
value less costs to sell and value in use. For the purposes of
assessing impairment, assets are reviewed at the lowest levels for
which there are separately identifiable cash flows (cash-generating
units).
Non-financial assets other than goodwill that suffered
impairment are reviewed for possible reversal of the impairment at
each reporting date.
3. Significant accounting policies continued
Provisions
A provision is recognised in the statement of financial position
when the Group has a present legal or constructive obligation as a
result of a past event, and it is probable that an outflow of
economic benefits will be required to settle the obligation. If the
effect is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and, when
appropriate, the risks specific to the liability. The increase in
the provision due to the passage of time is recognised in finance
costs.
Financial assets
The Group classifies all of its financial assets at amortised
cost. Financial assets do not comprise prepayments. Management
determines the classification of its financial assets at initial
recognition.
These assets arise principally from the provision of goods and
services to customers (e.g. trade receivables), but also
incorporate other types of financial assets where the objective is
to hold their assets in order to collect contractual cash flows and
the contractual cash flows are solely payments of the principal and
interest. They are initially recognised at fair value plus
transaction costs that are directly attributable to their
acquisition or issue and are subsequently carried at amortised cost
using the effective interest rate method, less provision for
impairment.
Amortised Cost
The Group's financial assets held at amortised cost comprise
trade and other receivables and cash and cash equivalents in the
consolidated statement of financial position.
Impairment provisions for trade receivables are recognised based
on the simplified approach within IFRS 9 using the lifetime
expected credit losses. During this process the probability of the
non-payment of the trade receivables is assessed. This probability
is then multiplied by the amount of the expected loss arising from
default to determine the lifetime expected credit loss for the
trade receivables. For trade receivables, which are reported net;
such provisions are recorded in a separate provision account with
the loss being recognised within administrative expenses in the
consolidated statement of comprehensive income. On confirmation
that the trade receivable will not be collectable, the gross
carrying value of the asset is written off against the associated
provision.
Impairment provisions for other receivables are recognised based
on the general impairment model within IFRS 9. In doing so, the
Company follows the 3-stage approach to expected credit losses.
Step 1 is to estimate the probability that the debtor will default
over the next 12 months. Step 2 considers if the credit risk has
increased significantly since initial recognition of the debtor.
Finally, Step 3 considers if the debtor is credit impaired,
following the criteria under IAS 39.
Financial liabilities
The Group classifies its financial liabilities in the category
of financial liabilities at amortised cost. All financial
liabilities are recognised in the statement of financial position
when the Group becomes a party to the contractual provision of the
instrument.
Financial liabilities measured at amortised cost comprise trade
payables and other short-dated monetary liabilities, which are
initially recognised at fair value and subsequently carried at
amortised cost using the effective interest rate method.
Unless otherwise indicated, the carrying values of the Group's
financial liabilities measured at amortised cost represents a
reasonable approximation of their fair values.
Employee benefits: pension obligations
The Group operates a defined contribution plan. A defined
contribution plan is a pension plan under which the Group pays
fixed contributions into a separate entity. The Group has no legal
or constructive obligations to pay further contributions if the
fund does not hold sufficient assets to pay all employees the
benefits relating to employee service in the current and prior
periods.
The Group has no further payment obligations once the
contributions have been paid. The contributions are recognised as
employee benefit expense when they are due. Prepaid contributions
are recognised as an asset to the extent that a cash refund or a
reduction in the future payments is available.
3. Significant accounting policies continued
Net finance costs
Finance costs
Finance costs comprise direct issue costs, dividends on
preference shares and foreign exchange losses; and are expensed
using the effective interest method in the period in which they are
incurred.
Finance income
Finance income comprises interest receivable on funds invested,
and foreign exchange gains.
Interest income is recognised in the income statement as it
accrues using the effective interest method.
Leases
Definition of a lease
The Group assesses whether a contract is or contains a lease. A
contract is or contains a lease if the contract conveys a right to
control the use of an identified asset for a period of time in
exchange for consideration.
The Group recognises a right-of-use asset and a lease liability
at the lease commencement date. The right-of-use asset is initially
measured at cost, and subsequently at cost less any accumulated
amortisation and impairment losses and adjusted for certain
measurements of the lease liability. Right-of-use assets are
amortised on a straight-line basis over the remaining term of the
lease or over the remaining economic life of the asset if, rarely,
this is judged to be shorter than the lease term.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit or, if that rate cannot
be readily determined, the Group's incremental borrowing rate.
Generally, the Group uses its incremental borrowing rate as the
discount rate.
The lease liability is subsequently increased by the interest
cost on the lease liability and decreased by lease payments made.
It is remeasured when there is a change in future lease payments
arising from a change in an index or rate, a change in estimate of
the amount expected to be payable under a residual value guarantee,
or as appropriate, changes in the assessment of whether a purchase
or extension option is reasonably certain to be exercised or a
termination option is reasonably certain not to be exercised.
The Group has applied judgement to determine the lease term for
some lease contracts in which it is a lease that include renewal
options. The assessment of whether the Group is reasonably certain
to exercise such options impacts the lease term, which
significantly affects the amount of lease liabilities ad
right-of-use assets recognised.
Income tax
Income tax for the years presented comprises current and
deferred tax. Income tax is recognised in the income statement
except to the extent that it relates to items recognised directly
in equity, in which case it is recognised in equity. Current tax is
the expected tax payable on the taxable income for the year, using
tax rates enacted or substantively enacted at the statement of
financial position date, and any adjustment to tax payable in
respect of previous years.
Deferred tax is recognised on temporary differences arsing
between the tax bases of assets and liabilities and their carrying
amounts.
The following temporary differences are not recognised if they
arise from a) the initial recognition of goodwill, and b) for the
initial recognition of other assets or liabilities in a transaction
other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss.
Deferred tax is determined using tax rates and laws that have been
enacted or substantially enacted by the balance sheet date and are
expected to apply when the related deferred tax asset is realised,
or the deferred income tax liability is settled.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the asset can be utilised. Deferred tax assets are reduced to
the extent that it is no longer probable that the related tax
benefit will be realised.
3. Significant accounting policies continued
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income taxes assets
and liabilities relate to income taxes levied by the same taxation
authority on either the taxable entity or different taxable
entities where there is an intention to settle the balances on a
net basis.
Critical accounting estimates and judgements
The preparation of the Group's financial statements under IFRS
as endorsed by the EU requires the directors to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and
liabilities. Estimates and judgements are continually evaluated and
are based on historical experience and other factors including
expectations of future events that are believed to be reasonable
under the circumstances. Actual results may differ from these
estimates.
The directors consider that the following estimates and
judgements are likely to have the most significant effect on the
amounts recognised in the financial statements.
Carrying value of intangible assets - Group
In determining whether there are indicators of impairment of the
Group's intangible assets, the directors take into consideration
various factors including the economic viability and expected
future financial performance of the asset and when it relates to
the intangible assets arising on a business combination, the
expected future performance of the business acquired.
Carrying value of investments in and amounts receivable from
subsidiaries - Company
In determining whether there are indicators of impairment of the
Company's investments in, and amounts receivable from, its
subsidiary undertakings, the directors take into consideration
various factors including the economic viability and expected
future financial performance of the business of the subsidiary
undertakings.
4. Segmental information
IFRS 8 requires operating segments to be identified on the basis
of internal reports about components of the Group that are
regularly reviewed by the chief operating decision maker (which
takes the form of the Board of Directors) as defined in IFRS 8, in
order to allocate resources to the segment and to assess its
performance.
The chief operating decision maker has determined that the Group
has one operating segment, the development and commercialisation of
gas polariser devices and ancillary instruments. Revenues are
reviewed based on the products and services provided: Polarisers,
Parts and Upgrades, Service and Other revenue.
The Group operates in Canada, the United Kingdom and the United
States of America. Revenue by origin of geographical segment for
all entities in the Group is as follows:
Revenue
2020 2019
US$ US$
-------------------------- ---------- ----------
Canada 85,728 897,716
United Kingdom 34,304 33,883
United States of America 936,734 1,369,494
-------------------------- ---------- ----------
Total 1,056,766 2,301,093
-------------------------- ---------- ----------
Non-current assets
2020 2019
US$ US$
-------------------------- ---------- ----------
United States of America 3,271,710 3,887,307
-------------------------- ---------- ----------
Total 3,271,710 3,887,307
-------------------------- ---------- ----------
Product and services revenue analysis
Revenue
2020 2019
US$ US$
-------------------- ---------- ----------
Polarisers 536,350 1,367,543
Parts and Upgrades 158,275 125,921
Service 61,991 55,117
Grants 300,151 752,512
-------------------- ---------- ----------
Total 1,056,766 2,301,093
-------------------- ---------- ----------
Management measures revenues by reference to the Group's core
services and products and related services, which underpin such
income.
5. Employees and Directors
Staff costs for the Group and the Company during the year:
2020 2019
US$ US$
---------------------- --------- ----------
Wages and salaries 2,265,077 2,030, 730
Healthcare benefits 142,942 107,149
Social Security costs 132,941 122,392
---------------------- --------- ----------
2,540,959 2,260,271
---------------------- --------- ----------
Average monthly number of people (including directors) employed
by activity:
2020 2019
No. No.
Senior management including directors 10 11
R&D and clinical trial 8 6
Administration 3 2
----------------------------------------------------- ------ -----
Total 21 19
----------------------------------------------------- ------ -----
Key management compensation:
The following table details the aggregate compensation paid to
key management personnel.
2020 2019
US$ US$
---------------------- ---------- ----------
Salaries and fees 1,242,468 1,292,135
Healthcare benefits 78,065 41,909
Social security costs 70,968 69,915
1,391,501 1,406,647
====================== ========== ==========
Key management personnel include all directors who together have
authority and responsibility for planning, directing, and
controlling the activities of the Group and senior divisional
managers.
6. Operating loss
2020 2019
US$ US$
------------------------------------------------- -------- ----------
Depreciation
* Owned property, plant and equipment 150,224 63,121
Amortisation of right-of-use assets 117,206 67,021
Amortisation of intangible assets 616,852 616,852
Subtotal Amortisation 734,058 683,873
Research expenses 451,129 155,346
Auditors' remuneration (note 8) 49,000 39,688
Clinical trial costs 427,155 1,892,592
Regulatory consulting costs 788,903 356,362
Legal and professional fees 298,850 348,972
-------------------------------------------------- -------- ----------
7. Net finance expense
2020 2019
US$ US$
Finance income 100,769 508
------------------------ -------- -------
Total finance income 100,769 508
------------------------ -------- -------
Finance expense 19,730 91,678
------------------------ -------- -------
Total finance expense 19,730 91,678
------------------------ -------- -------
8. Auditor remuneration
2020 2019
US$ US$
----------------------------------------------- ------- -------
Auditors' remuneration
Fees payable to the Group's auditor
for audit of Parent Company and Consolidated
Financial Statements 49,000 39,688
------------------------------------------------ ------- -------
9. Loss per share
The loss per share has been calculated using the loss for the
year and the weighted average number of ordinary shares outstanding
during the year, as follows:
2020 2019
US$ US$
----------------------------------------------- ----------------- ------------
Loss for the year attributable to shareholders
of the Group (US$) (6,534,523) (6,103,340)
Weighted average number of ordinary shares 149,985,929 107,043,107
----------------------------------------------- ----------------- ------------
Basic and diluted loss per share (0.044) (0.057)
----------------------------------------------- ----------------- ------------
For diluted loss per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
potential dilutive warrants, options and convertible loans over
ordinary shares. Potential ordinary shares resulting from the
exercise of warrants, options and the conversion of convertible
loans have an anti-dilutive effect due to the Group being in a loss
position. As a result, diluted loss per share is disclosed as the
same value as basic loss per share.
10. Taxation
There were no charges to current corporate taxation due to the
losses incurred by the Group in the period.
Income taxes computed at the statutory federal income tax of 21%
(2019: 21%) and the state income tax of 2.50% (2019: 2.50%) UK
corporation tax is calculated at 19% of the estimated assessable
profits for the year.
2020 2019
US$ US$
---------------------------------------------------- ------------ ------------
Loss on ordinary activities before tax (6,534,523) (6,103,340)
---------------------------------------------------- ------------ ------------
Loss on ordinary activities multiplied by
the rate of corporation tax in the US as
above (1,372,250) (1,281,701)
Effects of:
Adjustments for rate of tax in other jurisdictions 26,611 26,611
Unrelieved tax losses carried forward 1,345,639 1,255,090
Total taxation charge - -
---------------------------------------------------- ------------ ------------
The tax reform act of 1986 contains provisions which limit the
ability to utilise the net operating loss carry forwards in the
case of certain events including significant changes in ownership
interests. If the Group's net operating loss carry forward, the
Group would incur a federal income tax liability even though net
operating loss carry forwards would be available in future
years.
10. Taxation continued
The Company has tax losses carried forward of US$19,375,838
(2019: $12,841,315). The unutilised tax losses have not been
recognised as a deferred tax asset due to uncertainty over the
timing of future profits and gains.
11. Property, plant and equipment
Leasehold Furniture Computers
improvements and equipment and IT equipment Total
US$ US$ US$ US$
--------------------------
Cost
At 1 January 2019 2,695 32,623 26,665 61,983
Additions - 401,327 - 6,551
At 31 December 2019 2,695 433,950 26,665 463,310
-------------------------- -------------- --------------- ------------------ --------
Additions 10,963 6,840 32,608 65,531
At 31 December 2020 13,658 440,790 59,273 513,721
-------------------------- -------------- --------------- ------------------ --------
Accumulated depreciation
At 1 January 2019 1,438 25,671 17,122 44,231
Depreciation expense 539 56,438 6,144 63,121
At 31 December 2019 1,977 82,109 23,266 107,352
-------------------------- -------------- --------------- ------------------ --------
Depreciation expense 4,091 138,314 7,820 150,224
At 31 December 2020 6,068 213,012 23,377 242,457
-------------------------- -------------- --------------- ------------------ --------
Carrying amount
At 31 December 2019 718 351,841 3,399 355,958
-------------------------- -------------- --------------- ------------------ --------
At 31 December 2020 7,590 227,778 35,896 271,264
-------------------------- -------------- --------------- ------------------ --------
12. Intangible assets
Patents Total
US$ US$
-------------------------- ---------- ----------
Cost
At 1 January 2019 5,045,996 5,045,996
Additions - -
At 31 December 2019 5,045,996 5,045,996
-------------------------- ---------- ----------
Additions - -
-------------------------- ---------- ----------
At 31 December 2020 5,045,996 5,045,996
-------------------------- ---------- ----------
Accumulated amortisation
At 1 January 2019 1,001,598 1,001,598
Amortisation expense 616,852 616,852
At 31 December 2019 1,618,450 1,618,450
-------------------------- ---------- ----------
Amortisation expense 616,852 616,852
At 31 December 2020 2,235,302 2,235,302
-------------------------- ---------- ----------
Carrying amount
At 31 December 2019 3,427,547 3,427,547
-------------------------- ---------- ----------
At 31 December 2020 2,810,694 2,810,694
-------------------------- ---------- ----------
13. Investment in subsidiary undertakings
Subsidiary Undertakings
Company US$
--------------------- ------------------------
Cost
At 31 December 2019 4,342,848
At 31 December 2020 4,342,848
--------------------- ------------------------
Carrying amount
At 31 December 2019 4,342,848
At 31 December 2020 4,342,848
--------------------- ------------------------
The Directors annually assess the carrying value of the
investment in the Subsidiary and in their opinion no impairment
provision is currently necessary.
The net carrying amounts noted above relates to the Subsidiary.
The subsidiary undertakings during the year were as follows:
Interest
Country of held
Registered office address incorporation %
Polarean 2500 Meridian Parkway #175, Durham,
Inc. NC 27713, USA USA 100
---------- ------------------------------------- ---------------- ---------
14. Trade and other receivables
Group Company
Amounts falling due 2020 2019 2020 2019
after one year US$ US$ US$ US$
--------------------- ----------- ----------- ------------ ------------
Rental deposit 5,539 5,539 - -
---------------------- ----------- ----------- ------------ ------------
Group Company
Amounts falling due within 2020 2019 2020 2019
one year US$ US$ US$ US$
---------------------------------- -------- -------- ----------- -----------
Trade receivables 185,473 453,827 - -
Other receivables 51,184 97,401 51,184 97,402
Prepayments 111,410 84,935 10,121 6,275
Due from Subsidiary undertakings
(see note 26) - - 20,392,879 11,440,177
Called up share capital not - 620 - -
fully paid
348,067 636,783 20,454,183 11,543,854
---------------------------------- -------- -------- ----------- -----------
Analysis of trade receivables based on age of invoices
< 30 > 90 Total Gross ECL Total Net
31 - 60 61 -90
$'000 $'000 $'000 $'000 $'000 $'000 $'000
----- ------- -------- ------- ------ ----------- ------ ---------
2020 27,116 155,785 2,571 - 185,473 - 185,473
2019 453,827 - - - 453,827 - 453,827
----- ------- -------- ------- ------ ----------- ------ ---------
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses (ECL) which uses a lifetime expected loss
allowance for all trade receivables. The ECL balance has been
determined based on historical data available to management in
addition to forward looking information utilising management
knowledge. The Company applies a similar approach to measuring ECL
for the amounts due from group undertakings.
Trade receivables are amounts due from customers for goods sold
or services performed in the ordinary course of business. They are
generally due for settlement within 30 days and therefore are all
classified as current. The majority of trade and other receivables
are non-interest bearing. Where the effect is material, trade and
other receivables are discounted using discount rates which reflect
the relevant costs of financing. The carrying amount of trade and
other receivables approximates fair value.
The group trade receivables include governments grants amounted
to US$42,735 (2019: US$ 23,672) in which there are no unfulfilled
conditions or contingencies attached to these grants as of 31
December 2020.
15. Inventory
Group
2020 2019
US$ US$
Component parts 977,924 554,211
------------------ --------- --------
During the year ended 31 December 2020, a total of $346,300 of
inventories was included in the statement of comprehensive income
as an expense (2019: $925,612).
16. Cash and cash equivalents
Group Company
2020 2019 2020 2019
US$ US$ US$ US$
Cash at bank and in hand 6,282,665 1,961,869 911,271 56,765
--------------------------- ---------- ----------- --------- ----------
17. Share capital
The issued share capital of the Company was as follows:
Allotted and called up
- Ordinary shares of 0.037p 2020 2020 2019 2019
each No. US$ No. US$
------------------------------ ------------ ------- ------------ -------
At beginning of period 114,438,600 55,776 100,730,893 49,427
Issue of shares upon warrant
exercise 830,538 386 2,041,040 958
Issue of shares to investors 46,624,997 21,386 11,666,667 5,391
Issue of shares upon option
exercise 1,318,800 652 - -
------------------------------ ------------ ------- ------------ -------
At end of year 163,212,935 78,200 114,438,600 55,776
------------------------------ ------------ ------- ------------ -------
On 2 April 2019, the Company issued 705,040 new ordinary shares
upon the exercise of share warrants with an exercise price of
GBP0.15 each.
On 22 July 2019, the Company issued 11,666,667 new ordinary
shares at a price of GBP0.18 each.
On 24 July 2019, the Company issued 1,336,000 new ordinary
shares upon the exercise of share warrants with an exercise price
of GBP0.0003 each.
On 2 March 2020, the Company issued 232,010 new ordinary shares
upon the exercise of share warrants with an exercise price of
GBP0.15 each.
On 1 April 2020, the Company issued 46,624,997 new ordinary
shares at a price of GBP0.18 each.
On 1 June 2020, the Company issued 534,400 new ordinary shares
upon the exercise of share warrants with an exercise price of
GBP0.00003 each.
On 20 October 2020, the Company issued 64,128 new ordinary
shares upon the exercise of share warrants with an exercise price
of GBP0.15 each.
On 23 December 2020, the Company issued 1,318,800 new ordinary
shares upon the exercise of share options with an exercise price of
GBP0.15 each.
18. Reserves
Share premium
Share premium represents the excess of subscription amounts for
the issue of shares over nominal value of shares issued, less any
attributable share issue costs.
Group re-organisation reserve
The group re-organisation reserve arose on the transaction under
which the Group acquired the Subsidiary by way of a group
re-organisation.
Share based payment reserve
Cumulative fair value of options charged to the consolidated
income statement net of transfers to the profit or loss reserve on
exercised and cancelled/lapsed options.
Accumulated losses
Includes all current and prior year retained profits and
losses.
Merger reserve
The balance on the merger reserve represents the fair value of
the consideration given in excess of the nominal value of the
ordinary shares issued in an acquisition made by the issue of
shares where the transaction qualifies for merger relief under the
Companies Act 2006.
19. Share-based payments
Share options
The Company grants share options at its discretion to Directors,
management and employees. These are accounted for as equity settled
transactions. Should the options remain unexercised after a period
of ten years from the date of grant the options will expire unless
an extension is agreed to by the board. Options are exercisable at
a price equal to the Company's quoted market price on the date of
grant or an exercise price to be determined by the board.
Details of share options granted, exercised, lapsed and
outstanding at the year-end are as follows:
Number
of share
Weighted Weighted
average exercise average exercise
price (US$) options price (US$)
Number of
share options
2020 2020 2019 2019
-------------------------- -------------- ----------------- ----------- -----------------
Outstanding at beginning
of year 17,436,722 0.13 15,156,960 0.13
Granted during the year 900,000 0.99 2,610,750 0.25
Exercised during the
year (1,318,800) 0.19 - -
Forfeited/lapsed during
the year (133,600) 0.00 (734,588) 0.20
Outstanding at end of
the year 16,884,322 0.19 17,436,722 0.15
-------------------------- -------------- ----------------- ----------- -----------------
Exercisable at end of
the year 10,239,882 0.12 7,366,946 0.07
-------------------------- -------------- ----------------- ----------- -----------------
During the year ended 31 December 2020, 900,000 options were
granted (2019: 2,610,750), with an exercise price of 73 pence per
share. 25% of the options shall vest on 23 December 2021 with the
remaining 75% vesting in equal portions on the last day of each
calendar month over the period of 36 months, starting on 31
December 2021.
The options outstanding as at 31 December 2020 have an exercise
price in the range of US$0.0041 to US$0.99 (2019: US$0.0041 to
US$0.30 ).
The fair value of options granted during the year has been
calculated using the Black Scholes model which has given rise to
fair values per share of between US$0.4874 and US$0.4881. This is
based on risk-free rates of 0.25% and volatility of 78.89%
The Black Scholes calculations for the options resulted in a
charge of US$474,716 (2019: US$305,747) which has been expensed in
the year.
The weighted average remaining contractual life of the share
options is 6.47 years (2019: 7.26 years).
All share options are equity settled on exercise.
19. Share based payments continued
Share warrants
The Company grants share warrants at its discretion to
Directors, management, employees, advisors and lenders. These are
accounted for as equity settled transactions. Terms of warrants
very from agreement to agreement.
Details for the warrants granted, exercised, lapsed and
outstanding at the year-end are as follows:
Weighted
Weighted average
average exercise Number of exercise
price (US$) share warrants price (US$)
Number of
share warrants
2020 2020 2019 2019
-------------------------- ---------------- ------------------- ---------------- --------------
Outstanding at beginning
of year 4,824,703 0.09 7,023,539 0.09
Exercised during the
year (830,537) 0.13 (2,041,040) 0.07
Forfeited/lapsed during
the year - - (157,796) 0.20
Outstanding at end of
the year 3,994,166 0.09 4,824,703 0.09
-------------------------- ---------------- ------------------- ---------------- --------------
Exercisable at end of
the year 3,994,166 0.09 4,824,703 0.09
-------------------------- ---------------- ------------------- ---------------- --------------
The weighted average remaining contractual life of the share
warrants is 2.81 years (2019: 3.5 years).
20. Provision for contingent consideration
Group Company
2020 2019 2020 2019
US$ US$ US$ US$
Provision for contingent
consideration 316,000 316,000 - -
-------------------------- -------- ----------- -------- ----------
On 19 December 2011, the Subsidiary entered into an agreement
with a third party to purchase various assets, including patents,
trademarks, a license agreement and physical inventory. As
consideration for this transaction, the Subsidiary agreed to pay 5
per cent. of gross revenue on clinical sales of products that are
sold related to the patents purchased, for seven years from the
date of the commercial sale. As of 31 December 2020, the fair value
of this contingent consideration was US$316,000 (2019: US$316,000).
This liability is valued based on a probability weighted expected
return method using projected future cash flows. There were no
significant events in the year ended 31 December 2020 necessitating
revision of the probability weighted expected value of the
contingent consideration.
There was therefore no profit or loss arising on revaluation of
contingent consideration during the year ended 31 December 2020
(2019: nil).
21. Deferred income
Group Company
2020 2019 2020 2019
US$ US$ US$ US$
---------------------- -------- -------- ----- -----
Arising from service
contracts
Current 40,763 46,324 - -
Non-current 219,955 192,817 - -
---------------------- -------- -------- ----- -----
260,717 239,141 - -
---------------------- -------- -------- ----- -----
22. Trade and other payables
Group Company
2020 2019 2020 2019
US$ US$ US$ US$
----------------------------- ---------- ---------- ------- -------
Trade payables 388,030 660,249 4,930 14,681
Accruals and other payables 960,836 863,333 44,000 38,318
Royalties - 250,000 - -
----------------------------- ---------- ---------- ------- -------
1,348,867 1,773,582 48,930 52,999
----------------------------- ---------- ---------- ------- -------
Trade payables and accruals principally comprise amounts
outstanding for trade purchases and ongoing costs and are payable
within 1 year.
Royalties comprise a fixed payment of US$250,000 in relation to
an agreement entered into by the Subsidiary for the use of patents,
see note 24 - Royalty commitments.
The Directors consider the carrying value of all financial
liabilities to be equivalent to their fair value.
23. Changes in liabilities from financing activities
Group
1 January Non-cash 31 December
2019 Cash flows changes 2019
US$ US$ US$ US$
--------------------------------- --------- ---------- --------- -----------
Lease liability 191,361 (85,993) 16,001 121,369
--------------------------------- --------- ---------- --------- -----------
Total liabilities from financing
activities 191,361 (85,993) 16,001 121,369
--------------------------------- --------- ---------- --------- -----------
1 January Non-cash 31 December
2020 Cash flows changes 2020
US$ US$ US$ US$
--------------------------------- --------- ---------- --------- -----------
Lease liability 121,369 (122,827) 222,886 184,213
--------------------------------- --------- ---------- --------- -----------
Total liabilities from financing
activities 121,369 (122,827) 222,886 184,213
--------------------------------- --------- ---------- --------- -----------
24. Leases
Nature of leasing activities
The group leases properties in the jurisdiction in which it
operates with all lease payments fixed over the lease term.
2020 2019
US$ US$
------------------------- ----- -----
Number of active leases 2 2
-------------------------- ----- -----
The Group discounts the lease payments using its incremental
borrowing rate at the commencement date of the lease. The
weighted-average rate applied is 10%.
Right-of-use assets
Land and
Buildings
US$
---------------------- -----------
At 1 January 2019 165,284
Additions -
Amortisation expense (67,021)
At 31 December 2019 98,263
----------------------- -----------
At 1 January 2020 98,263
Additions 203,156
Amortisation expense (117,206)
At 31 December 2020 184,213
----------------------- -----------
Lease Liabilities
Land and
Buildings
US$
--------------------- -----------
At 1 January 2019 191,361
Additions -
Interest expense 16,001
Lease payments (85,993)
--------------------- -----------
At 31 December 2019 121,369
--------------------- -----------
At 1 January 2020 121,369
Additions 203,156
Interest expense 19,730
Lease payments (122,827)
--------------------- -----------
At 31 December 2020 184,213
--------------------- -----------
Analysis of gross value of lease liabilities
Maturity of the lease liabilities is analysed as follows:
2020 2019
US$ US$
----------------------------------------- -------- --------
Within 1 year 129,819 70,914
Later than 1 year and less than 5 years 91,609 50,455
221,428 121,369
----------------------------------------- -------- --------
25. Commitments
Royalty commitments
The Subsidiary has entered into three agreements requiring
royalty payments. One agreement is conditional and requires a
payment of 5 per cent. of gross revenue on clinical sales during
the payment period beginning on the date a product is first
commercially sold, contingent on receiving FDA approval, and ending
seven years from that date. A separate agreement requires payments
of 0.25 per cent of net sales of machines, and 20 per cent of any
sublicensing income for a specific method of use of patent
beginning in 2016. Additionally, beginning five years after the
effective date of 1 February 2021, there are minimum yearly
royalties of US$5,000. The third agreement requires a fixed payment
of US$250,000 for use of patents.
26. Financial instruments
The Group has exposure to the following key risks related to
financial instruments:
i. Market risk
ii. Credit risk
iii. Liquidity risk
This note presents information about the Group's exposure to
each of the above risks, the Group's objectives, policies and
processes for measuring and managing risk, and the Group's
management of capital. Further quantitative disclosures are
included throughout these consolidated Financial Statements.
The Group uses financial instruments including cash, loans, as
well as trade receivables and payables that arise directly from
operations.
Due to the simple nature of these financial instruments, there
is no material difference between book and fair values, discounting
would not give a material difference to the results of the Group
and the Directors believe that there are no material sensitivities
that require additional disclosure.
(a) Credit risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Subsidiary. In order to minimise the risk, the Subsidiary
endeavours only to deal with companies which are demonstrably
creditworthy and this, together with the aggregate financial
exposure, is continuously monitored. The maximum exposure to credit
risk is the value of the outstanding amount.
The Directors do not consider that there is any concentration of
risk within either trade or other receivables. There are no
impairments to trade or other receivables in each of the years
presented.
The Company has made unsecured interest-free loans to its
Subsidiary that are repayable on demand and are expected to be
repaid in the future as the Subsidiary is revenue generative.
Categories of financial instruments
Group Company
Financial Assets measured 2020 2019 2020 2019
at amortised cost US$ US$ US$ US$
-------------------------------- ---------- ---------- ----------- -----------
Cash and cash equivalents 6,282,665 1,961,869 911,271 56,765
Loans and receivables
Trade and other receivables
- current 236,657 551,849 20,444,062 11,537,579
Trade and other receivables
- non-current 5,539 5,539 - -
-------------------------------- ---------- ---------- ----------- -----------
Financial Liabilities measured
at amortised cost
Trade and other payables 1,348,867 1,773,581 48,930 52,998
-------------------------------- ---------- ---------- ----------- -----------
26. Financial instruments continued
Capital risk management
The Group manages its capital to ensure that it will be able to
continue as a going concern while maximising returns to
shareholders through the optimisation of capital structure. The
Group is funded by equity. Equity comprises share capital, share
premium, share-based payment reserves, group re-org reserves and
accumulated losses and is presented in the statement of financial
position. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders or issue new shares.
The Group manages the capital structure and makes adjustments to
it in the light of changes to economic conditions and risks.
(b) Market risk
The interest rate profile of the Subsidiary's borrowings is
shown below:
Interest rate sensitivity analysis
As the interest rates on shareholders loans are fixed, interest
rate risk is considered to be very low.
(c) Liquidity risk
A maturity analysis of the Group's liabilities is shown
below:
2020 2019
US$ US$
------------------------------- ---------- ----------
Less than one year 1,519,449 1,890,820
One to two years 91,609 50,455
Two to five years 219,955 192,817
-------------------------------- ---------- ----------
Total including interest cash
flows 1,831,012 2,134,092
Less: interest cash flows - -
------------------------------- ---------- ----------
Total principal cash flows 1,831,012 2,134,092
-------------------------------- ---------- ----------
Derivatives
The Group and Company have no derivative financial
instruments.
27. Contingent liabilities
The Directors are not aware of any material contingent
liabilities, except for the contingent consideration detailed in
note 20.
28. Related party transactions
Remuneration of the key management personnel has been disclosed
in Note 5.
29. Events after the reporting period
On 22 February 2021, The Company appointed Charles Osborne,
Chief Financial Officer, to the Board of Directors.
On 24 February 2021, the Company issued 61,563 new ordinary
shares of GBP0.00037 each in the capital of the Company at the
exercise price of 15 pence per share, following the exercise of
warrants.
On 25 March 2021, the Company issued 358,713 new ordinary shares
of GBP0.00037 each in the capital of the Company at the exercise
price of 15 pence per share, following the exercise of
warrants.
On 31 March 2021, 7 April 2021 and 8 April 2021 the Company
issued a total of 44,932,142 new ordinary shares of GBP0.00037 each
in the capital of the Company at the issue price of 60 pence per
share in a Placing, Subscription and Open Offer for total proceeds
of GBP27 million (before expenses).
On 16 April 2021, the Company issued 467,733 new ordinary shares
of GBP0.00037 each in the capital of the Company at the exercise
price of 15 pence per share, following the exercise of
warrants.
On 27 April 2021, the Company granted options over a total of
1,000,000 ordinary shares of GBP0.00037 each in the capital of the
Company to new employees. The options vest over four years and have
an exercise price of 77 pence per share.
On 17 May 2021, the Company issued 40,080 new ordinary shares of
GBP0.00037 each in the capital of the Company at the exercise price
of 15 pence per share, following the exercise of warrants.
Notice of the Annual General Meeting
POLAREAN IMAGING PLC
(Incorporated in England and Wales under the Companies Act 2006
with company number 10442853)
NOTICE OF ANNUAL GENERAL MEETING
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE
ATTENTION
If you are in any doubt as to what action you should take, you
are recommended to seek your own financial advice from your
stockbroker or other independent adviser authorised under the
Financial Services and Markets Act 2000.
If you have recently sold or transferred all of your shares in
Polarean Imaging plc, please forward this document, together with
the accompanying documents, as soon as possible either to the
purchaser or transferee or to the person who arranged the sale or
transfer so they can pass these documents to the person who now
holds the shares.
It is intended that the Annual General Meeting (the "AGM") of
Polarean Imaging plc will be held at the Company's office at 2500
Meridian Parkway, Suite 175, Durham, NC 27713 USA at 2:00 pm BST on
Tuesday 13 July 2021. However, it is possible that there may be
government restrictions imposed as a result of the COVID-19
pandemic at that time and therefore the arrangements for the AGM
may be subject to change, possibly at short notice.
In light of this, we strongly encourage you to vote on all
resolutions by completing an online proxy form in advance of the
meeting, appointing the Chair of the meeting as your proxy, whether
or not you are ultimately able to attend in person. Details of how
to do this are set out below. Please note that if you appoint a
person other than the Chair of the meeting as your proxy, in the
event that measures are put in place by the US government which
prevent attendance at the meeting, your proxy may not be able to
attend the AGM and, if this is the case, your votes will not be
counted.
NOTICE IS HEREBY GIVEN that the annual general meeting of
Polarean Imaging plc (the "Company") will be held at the Company's
office at 2500 Meridian Parkway, Suite 175, Durham, NC 27713 USA at
2:00pm BST on Tuesday 13 July 2021 for the purpose of considering
and, if thought fit, transacting the following business:
ORDINARY BUSINESS
To consider and, if thought fit, pass the following resolutions
which will be proposed as ordinary resolutions:
1. To receive and consider the Company's audited accounts for
the year ended 31 December 2020 and the Directors' of the Company
("Director(s)") and auditors' reports thereon.
2. To consider and approve the remuneration report as detailed
in the Company's annual report and accounts.
3. To re-appoint Crowe UK LLP as auditor of the Company (the
"Auditors") to hold office until the conclusion of the next general
meeting at which accounts are laid and to authorise the Directors
to fix the Auditor's remuneration.
4. To re-elect Charles Osborne as a Director, who retires in
accordance with article 78 of the Articles, and who, being
eligible, offers himself for re-election.
5. To re-elect Kenneth West as a Director, who retires in
accordance with article 78 of the Articles, and who, being
eligible, offers himself for re-election.
6. To generally and unconditionally authorise the Directors for
the purpose of section 551 of the Companies Act 2006 (the "Act"),
in substitution for all existing authorities to the extent unused,
to exercise all the powers of the Company to allot or grant rights
to subscribe for or to convert any security into shares in the
Company up to an aggregate number of 31,360,974 ordinary shares of
GBP0.00037 each ("Ordinary Shares") (being 15 per cent. of the
total number of Ordinary Shares in issue as at the date of this
notice) provided that this authority shall expire on the earlier of
15 months after the date of passing of this resolution or the
conclusion of the annual general meeting of the Company next
following the passing of this resolution, save that the Company
may, before such expiry, make an offer or agreement which would or
might require shares or equity securities, as the case may be, to
be allotted or such rights granted after such expiry and the
Directors may allot shares or equity securities or grant such
rights, as the case may be, in pursuance of such offer or agreement
notwithstanding that the authority conferred by this resolution has
expired.
SPECIAL BUSINESS
To consider and, if thought fit, pass the following resolution
as a special resolution:
7. Subject to the passing of resolution 6 above, to empower the
Directors, pursuant to the general authority conferred on them and
section 570 of the Act, to allot equity securities (within the
meaning of section 560 of the Act) for cash as if section 561 of
the Act did not apply to any such allotment, provided that this
power shall be limited to the allotment of equity securities:
7.1. made in connection with an offer of securities, open for
acceptance for a fixed period, to holders of Ordinary Shares of the
Company on the register on a fixed record date in proportion (as
nearly as may be) to their then holdings of such Ordinary Shares
(but subject to such exclusions or other arrangements as the
Directors may deem necessary or expedient to deal with any legal or
practical problems under the laws or requirements of any recognised
regulatory body or any stock exchange in any overseas territory or
in connection with fractional entitlements); and/or
7.2. wholly for cash (otherwise than pursuant to paragraph 7.1
above) up to an aggregate number of 31,360,974 Ordinary Shares.
This authority shall expire on the earlier of 15 months after
the date of passing of this resolution and the conclusion of the
annual general meeting of the Company next following the passing of
this resolution but the Company may, before such expiry, make an
offer or agreement which would or might require shares or equity
securities, as the case may be, to be allotted or such rights
granted after such expiry and the Directors may allot shares or
equity securities or grant such rights, as the case may be, in
pursuance of such an offer or agreement notwithstanding that the
power conferred by this resolution has expired.
By Order of the Board
Registered Office:
Stephen Austin 27-28 Eastcastle Street
Company Secretary London
2 June 2021 W1Q 8DH
NOTES
A shareholder entitled to attend and vote at the meeting
convened by this notice is entitled to appoint one or more proxies
to exercise all or any of their rights to attend, speak and vote on
their behalf at the annual general meeting. A proxy need not be a
shareholder.
(1) Arrangements for the meeting - COVID-19 outbreak
The continuing coronavirus (COVID-19) pandemic has previously
led to the imposition of severe restrictions on public gatherings.
Although it appears that these will likely no longer apply as at 13
July 2021, this remains subject to change. In the event that the
AGM venue is closed on the date of the AGM, physical attendance in
person at the AGM will not be possible, in which case the meeting
will take place with the minimum necessary quorum of two
shareholders which will be facilitated by the Company in line with
the Government's social distancing advice as at that time.
On this basis, to safeguard Shareholders' and employees' health
and to make the meeting as safe and as efficient as possible, the
Board:
-- Encourages Shareholders to submit their votes by proxy as
early as possible, and Shareholders should appoint the Chairman of
the meeting as their proxy. If a Shareholder appoints someone else
as their proxy, that proxy may not be able to attend the AGM in
person or cast the Shareholder's vote. All proxy appointments
should be received by no later than 2:00pm BST on 9 July 2021.
-- Strongly recommends CREST members to vote electronically
through the CREST electronic proxy appointment service as your vote
will automatically be counted. In addition, the Company has also
decided that Forms of Proxy can also be submitted by Shareholders
electronically (even outside CREST) by emailing a scanned copy of
the signed personalised Form of Proxy to
voting@shareregistrars.uk.com. Please contact Share Registrars
Limited contact number on +44 (0) 1252 821390 for any further
guidance. Dealing with paper proxies requires physical interaction
such as post sorting and delivery, evaluation and manual input.
Given the current situation, any task that requires a physical
presence may be subject to disruption and sending a paper proxy is
no guarantee of having your vote counted.
-- Proposes that voting at the meeting will be conducted by
means of a poll on all resolutions, with each Shareholder having
one vote for each share held, thereby allowing all those proxy
votes submitted and received prior to the meeting to be
counted.
-- Encourages you to submit any question that you would like to
be answered at the meeting by sending it, together with your name
as shown on the Company's register of members and the number of
shares held, to the following email address:
polarean@walbrookpr.com so that it is received by no later than 12
noon BST on 9 July 2021. Please insert "AGM - Shareholder
Questions" in the subject header box of your email. The Company
will endeavour to respond to all questions received from
Shareholders at the AGM or within seven days following the AGM.
-- Will continue to closely monitor the COVID-19 situation in
the lead up to the meeting and make further updates about the
meeting on the Company's website at
https://www.polarean-ir.com/content/news/corporate-news as
necessary. Please ensure that you regularly check this page for
updates.
(2) To appoint a proxy, shareholders should use the form of
proxy enclosed with this notice of annual general meeting. Please
carefully read the instructions on how to complete the form of
proxy. For a proxy to be effective, the instrument appointing a
proxy together with the power of attorney or such other authority
(if any) under which it is signed or a notarised certified copy of
the same must be deposited with the Company's registrars, Share
Registrars Limited of The Courtyard, 17 West Street, Farnham,
Surrey, GU9 7DR, United Kingdom (the "Registrars") or by e-mail to
voting@shareregistrars.uk.com , by 2:00pm BST on 9 July 2021, or,
if the annual general meeting is adjourned, 48 hours before the
time fixed for the adjourned meeting (excluding any part of a day
that is not a business day). The completion and return of a form of
proxy does not preclude a shareholder from subsequently attending
and voting at the annual general meeting in person if he or she so
wishes. If a shareholder has appointed a proxy and attends the
annual general meeting in person, such proxy appointment will
automatically be terminated.
(3) Pursuant to Regulation 41 of Uncertificated Securities
Regulations 2001, the Company specifies that only those
shareholders on the register of members at 2:00pm BST on 9 July
2021 or, if the meeting is adjourned, 48 hours before the time of
the adjourned meeting (excluding any part of a day that is not a
business day), shall be entitled to attend or vote at the annual
general meeting in respect of the number of ordinary shares of
GBP0.00037 each (the "Ordinary Shares") registered in their name at
that time. Changes to the register of members after that time shall
be disregarded in determining the rights of any person to attend or
vote at the annual general meeting.
(4) Any Shareholder may insert the full name of a proxy or the
full names of two alternative proxies of the Shareholder's choice
in the space provided with or without deleting 'the Chairman of the
meeting.' A proxy need not be a Shareholder but must attend the
meeting to represent the relevant Shareholder. The person whose
name appears first on the Form of Proxy and has not been deleted
will be entitled to act as proxy to the exclusion of those whose
names follow. If this proxy form is signed and returned with no
name inserted in the space provided for that purpose, the Chairman
of the meeting will be deemed to be the appointed proxy. Where a
Shareholder appoints as his/her proxy someone other than the
Chairman, the relevant Shareholder is responsible for ensuring that
the proxy attends the meeting and is aware of the Shareholder's
voting intentions. Any alteration, deletion or correction made in
the Form of Proxy must be initialled by the signatory/ies.
(5) A shareholder may appoint more than one proxy provided that
each proxy is appointed to exercise the rights attached to a
different Ordinary Share or Ordinary Shares held by that
shareholder. A shareholder may not appoint more than one proxy to
exercise rights attached to any one Ordinary Share. If a
shareholder wishes to appoint more than one proxy, they should
contact the Registrars on 01252 821390, +44 1252 821390 from
overseas. Lines are open from 9.00 a.m. to 5.30 p.m. Monday to
Friday, excluding public holidays. Alternatively, you may write to
the Registrars at Share Registrars Limited, The Courtyard, 17 West
Street, Farnham, Surrey, GU9 7DR, United Kingdom for additional
proxy forms and for assistance.
(6) Any corporation which is a shareholder can appoint one or
more corporate representatives who may exercise on its behalf all
of its powers as a shareholder provided that they do not do so in
relation to the same Ordinary Share.
(7) As at the close of business on the date immediately
preceding this notice, the Company's issued share capital comprised
209,073,166 Ordinary Shares. Each Ordinary Share carries the right
to vote at the Annual General Meeting and, therefore, the total
number of voting rights in the Company as at close of business on
the date immediately preceding this notice is 209,073,166.
(8) A shareholder's instructions to the proxy must be indicated
in the appropriate space provided. To abstain from voting on a
resolution, select the relevant 'Vote withheld' box. A vote
withheld is not a vote in law, which means that the vote will not
be counted in the calculation of votes for or against the
resolution. If no voting indication is given, your proxy will vote
or abstain from voting at his or her discretion. Your proxy will
vote (or abstain from voting) as he or she thinks fit in relation
to any other matter which is put before the meeting.
(9) This form of proxy must be signed by the appointor or his
attorney duly authorised in writing. The power of attorney or other
authority (if any) under which the form of proxy is signed, or a
notarised certified copy of the power or authority, must be
received by the Registrars with the form of proxy. If the appointor
is a corporation, the form of proxy should be signed on its behalf
by an attorney or duly authorised officer or executed as a deed or
executed under common seal. In the case of joint holders, the
signature of any one of them will suffice, but the names of all
joint holders should be stated.
(10) CREST members who wish to appoint a proxy or proxies
through the CREST Electronic Proxy Appointment Service may do so
for the Annual General Meeting to be held at 2:00pm BST on 13 July
2021 and any adjournment(s) thereof by following the procedures
described in the CREST manual. All messages relating to the
appointment of a proxy or an instruction to a previously appointed
proxy, which are to be transmitted through CREST, must be received
by the Registrars (ID 7RA36) no later than 2:00pm BST on 9 July
2021, or, if the annual general meeting is adjourned, 48 hours
before the time fixed for the adjourned meeting (excluding any part
of a day that is not a business day).
(11) In order to revoke a proxy instruction, you will need to
inform the Company by sending a signed hard copy notice clearly
stating your intention to revoke your proxy appointment to the
Registrars. In the case of a shareholder which is a company, the
revocation notice must be executed in accordance with note 12
below. Any power of attorney or any other authority under which the
revocation notice is signed (or a duly certified copy of such power
or authority) must be included with the revocation notice and must
be received by the Registrars not less than 48 hours (excluding any
part of a day that is not a business day) before the time fixed for
the holding of the annual general meeting or any adjourned meeting
(or in the case of a poll before the time appointed for taking the
poll) at which the proxy is to attend, speak and to vote. If you
attempt to revoke your proxy appointment but the revocation is
received after the time specified then, subject to the paragraph
directly below, your proxy appointment will remain valid.
(12) A corporation's form of proxy must be executed under either
its common seal, if any, or under the hand of a duly authorised
officer or attorney, in each case as required under the laws of its
relevant jurisdiction.
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END
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