TIDMPOLX
RNS Number : 8481L
Polarean Imaging PLC
18 May 2022
18 May 2022
Polarean Imaging Plc
("Polarean" or the "Company")
Final results for the year ended 31 December 2021
Notice of Annual General Meeting
Polarean Imaging plc (AIM: POLX), the medical--imaging
technology company with an investigational drug--device combination
product using hyperpolarised (129) xenon gas to enhance magnetic
resonance imaging (MRI) in pulmonary medicine announces its audited
final results for the year ended 31 December 2021.
In addition, Polarean confirms that the Annual Report and
Accounts for the year ended 31 December 2021, 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 2 p.m. BST / 9 a.m. EST on Wednesday 29
June 2022.
Highlights
- Raised GBP27 million (US$37.1 million) gross proceeds in an
oversubscribed financing in April 2021, 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
- Sale and installation of two new Polarean 9820 Xenon Polariser
systems to each of the University of Texas MD Anderson Cancer
Center and the University of British Columbia BC Children's
Hospital
- Appointment of Charles ("Chuck") Osborne, Chief Financial Officer, to the Board
- Publication of first peer-reviewed COVID-19 research using
hyperpolarised xenon MRI to observe longer-term lung damage after
COVID-19 infection by Professor Fergus Gleeson at the University of
Oxford
- Net cash of US$28.9 million as of 31 December 2021, which,
based on strategic decisions, could finance the company into
2024
Post-period end
- Successful re-submission of New Drug Application (NDA) to the
FDA following the Complete Response Letter (CRL) received in
October 2021, with an established user fee goal date of 30
September 2022
- Further new research system orders from McMaster University in
Ontario, Canada and Cincinnati Children's Medical Center
- Appointment of Frank Schulkes and Dan Brague to the Board as Non-Executive Directors
- Appointment of Ken West as Non-Executive Chairman, following the retirement of Jonathan Allis
- Research collaboration with Oxford University Hospitals NHS Trust for long-COVID
Richard Hullihen, CEO of Polarean, said: "In the first half of
2021 we completed our largest financing to date with an
oversubscribed GBP27 million gross proceeds placing, subscription
and open offer. We welcomed several significant new institutional
investors and continued to receive excellent support from our
existing strategic, institutional and retail investors.
"We spent much of the year gearing towards our anticipated FDA
approval, although the FDA confirmed in October that they were
unable to approve the NDA in its current form due to some technical
or manufacturing-related issues centred around the xenon
hyperpolariser system. We worked hard with consultants and
collaborators to thoroughly address the items raised and
successfully resubmitted our application post-period end, in March
2022. We now have an established user fee goal date of 30 September
2022 and will continue to focus our efforts on building our
commercial organisation to support a successful launch upon FDA
approval.
We continue to identify exciting opportunities in the areas of
COVID-19, cardiology and pulmonary vascular disease and these
prospects should expand the use of the Company's technology in the
future. Although the delay in FDA approval is disappointing, we are
using this time to continue to explore potential future
applications for our technology. On behalf of the Board and the
whole Polarean team, I would like to extend my thanks to our
shareholders for all their support and we look forward to a very
positive year ahead."
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 Via Walbrook PR
Officer
Ken West, Chairman
Stifel Nicolaus Europe Limited (NOMAD and
Sole Corporate Broker) +44 (0)20 7710 7600
Nicholas Moore / Samira Essebiyea / William
Palmer-Brown
(Healthcare Investment Banking)
Nick Adams / Fred Walsh (Corporate
Broking)
Walbrook PR Tel: +44 (0)20 7933 8780 or polarean@walbrookpr.com
Anna Dunphy / Phillip Marriage Mob: +44 (0)7879 741 001 / +44 (0)7867
984 082
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 membrane,
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. The Group
received a complete response letter on 5 October 2021. On 30 March
2022, the Company filed the resubmission of its NDA with the US FDA
and has received a PDUFA date of 30 September 2022.
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.
Chairman's Statement
I am pleased to report on a year of considerable progress for
Polarean particularly in light of the ongoing global challenges. We
have continued to build momentum in our strategy to advance our
powerful Xenon MRI lung imaging technology towards
commercialisation. The COVID pandemic, and the challenges that are
growing with long COVID, have further accentuated the urgent global
need for improved ways to diagnose and manage pulmonary disease.
Polarean is poised to offer a solution to the gaps that exist with
current diagnostic imaging to directly measure and visualise lung
function.
Our efforts in 2021 focused on preparation for
commercialisation, following the Company's October 2020 New Drug
Application ("NDA") submission to the United States Food & Drug
Administration ("FDA"). To fund these commercialisation efforts, in
April 2021, the Company completed an oversubscribed GBP27 million
placing, subscription and open offer. This financing round put the
Company into a strong financial position and brought in several new
top-tier investors into the Polarean shareholder base.
The market research and physician advisory boards that were
conducted in 2021 thoroughly advanced our understanding of the
unmet needs our technology seeks to address and highlighted the
market opportunities that exist in several clinical applications at
commercial launch. Through scientific engagement between our
medical affairs team and pulmonary disease thought-leaders
undertaken in 2021, it is clear that awareness, interest, and
enthusiasm is building for the potential of hyperpolarised xenon
MRI to improve the care of patients with pulmonary disease. The
interest in Polarean's technology is also growing amongst several
pharmaceutical companies that are seeking novel approaches to use
quantitative, functional lung imaging in the development of their
investigational drugs. Finally, Polarean has also been in close
contact with reimbursement entities in the US market, developing
pathways to ensure that reimbursement for the use of Polarean's
products is established, and at a level that acceptable to insurers
and providers
We were disappointed in early October 2021 to have received a
Complete Response Letter ("CRL") from the FDA in response to
Polarean's NDA submission. The Company worked diligently to
comprehensively respond to the questions raised in the CRL, which
were mostly technical and manufacturing related. The Company
resubmitted the NDA to the FDA on 30 March 2022 and on 20 April
2022, the Company announced that the FDA had accepted the
resubmission of the NDA and established a user fee goal date of 30
September 2022.
Our primary focus for the remainder of 2022 will be working with
the FDA to obtain final approval for our drug-device combination
product and continuing the planning and preparation for commercial
launch. We are also looking forward to generating new clinical data
evidence to support a strong value proposition and indication and
geographical expansion in subsequent regulatory filings over the
next several years.
On behalf of the Board, I thank the employees, stakeholders and
shareholders for their support, without which none of this would
have been possible.
Kenneth West
Non-Executive Chairman
17 May 2022
Chief Executive Officer's Statement
2021 - Year of Preparation and Response
We spent the first nine months of 2021 preparing for the launch
of our drug-device combination product in anticipation of receiving
FDA approval in the fourth quarter of 2021. On 5 October 2021, we
were surprised to receive a CRL from the FDA, indicating that they
were unable to approve the NDA in its current form. The CRL and
subsequent Type A meeting with the FDA provided the Company with
the list of issues that needed to be addressed to obtain approval.
The issues were mostly technical or manufacturing-related in nature
and centred around the xenon hyperpolariser system. The Company
worked with its consultants and collaborators to address the items
identified in the CRL. On 30 March 2022, the Company refiled the
NDA with the FDA. The resubmission addressed the items identified
in the CRL. On 20 April 2022, the Company announced that the FDA
had accepted the resubmission of the NDA and established a user fee
goal date of 30 September 2022, designating it Type 2.
The Opportunity
Pulmonary disease places a significant burden on the US and
global healthcare systems. In addition, the COVID-19 pandemic has
resulted in millions of additional patients who could potentially
benefit from improvements in the quantitative assessment of
pulmonary function via non-invasive imaging. The Company sees a
tremendous opportunity to bring our technology's quantitative,
reproducible, non- invasive method for diagnostic and therapeutic
guidance to medicine. Researchers around the world are receiving
grants to study long COVID patients using the Company's
technologies. Promising preliminary results are already emerging
and being published and we anticipate additional studies being
published over the next 12 months. Researchers are currently
conducting clinical trials and pharmaceutical company sponsored
investigations in multiple areas of pulmonary disease using our
technology. The Company continues to do market research and work
with key opinion leaders through its advisory board process to
refine and extend our understanding of current standards of care
and refine the development of the healthcare economic analyses of
our technology to support the adoption of hyperpolarised noble gas
imaging by healthcare providers. The business plan continues to
focus initially on addressing the high end of the US academic and
teaching hospital market segment, which comprises approximately the
top 1000 institutions nationally having coincident multiple Centres
of Excellence in Pulmonary Medicine and Radiology. The combined
addressable capital equipment market there for our products
approaches US$500 million in equipment sales alone, with the
consequent drug sales following, as laid out in recently published
research. We also see a parallel opportunity supporting the
pharmaceutical industry in improving the velocity and reducing the
scale and cost of their pulmonary drug clinical trials by providing
quantitative, reproducible image-based data.
Polarean continues to serve the medical imaging research market
by providing xenon polarisers to enable functional MRI of the
pulmonary system to institutions and researchers. This brings
dynamic, reproducible, three-dimensional, 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. We expanded our installed bases with two new polariser
installations during 2021, including one at high profile academic
research centre, MD Anderson.
Our Organisation
In anticipation of FDA approval, the Company has been involved
in preparing the organisation for commercialisation of our
products. The Company recently named Alexander Dusek as its Chief
Commercial Officer. Mr. Dusek brings an extensive background in
pharmaceutical industry commercialisation and is building our
commercial organisation to support a successful launch upon FDA
approval.
Our Operations
In 2021, the Company focused on working with its drug and system
contract manufacturing partners to ensure that they are prepared
for the launch of the Company's product. In addition, we made
planned advances in our quality systems and engineering
infrastructure as we move toward maturing in our new regulated
environment.
During the year, we completed installations of two model 9820
xenon polariser systems at BC Children's Hospital, Vancouver BC,
and at the University of Texas MD Anderson Cancer Center, to
support their pulmonary research programmes.
R&D
We continued to invest in our intellectual property portfolio
and future development of our technology. Intellectual property
continues to be developed in the areas of gas exchange and
pulmonary vascular disease. Our group has continued to push the
design of the polariser systems forward. We have also made key
advances in exciting new display and analysis software focused on
providing an intuitive, colour encoded three-dimensional display
for use across all stakeholders in the healthcare process focused
on providing care to pulmonary patients.
Financials
Sales for 2021 were below our original expectations, as we did
not receive FDA approval in the final quarter as anticipated in the
plan. We were able to adjust our spending plans following receipt
of the CRL from the FDA, which allowed us to finish 2021 with a
higher than anticipated cash balance of US$28.9 million. We
continued to sell our polariser systems into the research market
and completed two installations during 2021. The financing we
completed in the first half of 2021 has put the Company in a solid
financial position with the ability to fund the Company well into
2023.
Advisers
The Company appointed Stifel as joint broker in December 2020
and followed that up by appointing them as the Company's nominated
adviser and sole broker early in 2021. Stifel guided the Company
through an oversubscribed round of financing, securing important
new and larger funds participation in the first half of 2021 that
allowed the Company to prepare for the anticipated US launch of its
product.
2022 and Beyond
We spent the first quarter of 2022 finalising our NDA
resubmission focusing on execution of near-term objectives. We
announced on 20 April 2022 that the FDA had accepted the
resubmission of the NDA as a complete response and has established
a user fee goal date of 30 September 2022. In the meantime, we
continue to sell our systems to the research market, including the
recently announced order and installation from McMaster University
in Canada, and an order for an additional system at Cincinnati
Children's Hospital Medical Center.
We continue to identify exciting opportunities in the areas of
long COVID, cardiology and pulmonary vascular disease and these
prospects should expand the use of the Company's technology in the
future. We recently announced a research collaboration in long
COVID with Oxford University Hospitals NHS Trust, whereby we will
evaluate the underlying causes of persistent breathlessness in
patients with long COVID using our xenon polariser. We are
utilising the delay in obtaining FDA approval to work on the
commercialisation and launch programmes and explore initiation of
follow-on trials for potential future applications of our
technology. We have begun evaluation of geographic market
exploration and expansion, and the pursuit of early engagement with
respiratory drug developers as we develop scale sufficient to prove
our value proposition with regard to reducing the costs of their
drug development process.
Polarean has a dedicated team of employees, consultants and
advisers working to bring our much- needed technology to the
healthcare market.
Richard Hullihen
Chief Executive Officer
17 May 2022
Consolidated Statement of Comprehensive Income
2021 2020
Notes US$ US$
Revenue 4 1,185,427 1,056,766
Cost of sales (677,402) (346,300)
Gross profit 508,025 710,466
Administrative expenses (6,517,396) (5,049,246)
Depreciation 11 (177,349) (150,224)
Amortisation 12 (757,016) (734,058)
Selling and distribution expenses (5,557,829) (917,783)
Share-based payment expense 19 (1,814,882) (474,716)
Total administrative expenses (14,824,472) (7,326,027)
Operating loss 6 (14,316,447) (6,615,562)
Finance income 7 321,544 100,769
Finance expense 7 (21,101) (19,730)
Loss before tax (14,016,004) (6,534,523)
Taxation 10 - -
Loss for the year and total other comprehensive
expense (14,016,004) (6,534,523)
Loss per share
------------------------- -------- --------
Basic and diluted (US$) 9 (0.071) (0.044)
------------------------- -------- --------
The results reflected above relate to continuing activities.
There are no items of Other Comprehensive Income ("OCI") for the
year other than the loss above and therefore no separate statement
of other comprehensive income has been presented.
Consolidated Statement of Financial Position
Notes 2021 2020
US$ US$
ASSETS
Non-current assets
Property, plant and equipment 11 634,779 271,264
Intangible assets 12 2,193,843 2,810,694
Right-of-use assets 24 422,816 184,213
Trade and other receivables 14 5,539 5,539
3,256,977 3,271,710
-------------------------------- ------ ------------- -------------
Current assets
Inventories 15 1,426,810 977,924
Trade and other receivables 14 970,968 348,067
Cash and cash equivalents 16 28,874,908 6,282,665
-------------
31,272,686 7,608,656
-------------------------------- ------ ------------- -------------
TOTAL ASSETS 34,529,663 10,880,366
-------------------------------- ------ ------------- -------------
EQUITY AND LIABILITIES
Equity attributable to holders
of the parent
Share capital 17 101,642 78,200
Share premium 18 59,022,919 23,840,571
Group re-organisation reserve 18 7,813,337 7,813,337
Share-based payment reserve 19 3,660,332 1,845,450
Accumulated losses 18 (38,860,208) (24,844,204)
-------------------------------- ------ ------------- -------------
31,738,022 8,733,354
-------------------------------- ------ ------------- -------------
Non-current liabilities
Deferred income 21 145,747 219,954
Lease liability 24 358,837 91,609
Contingent consideration 20 316,000 316,000
820,584 627,563
-------------------------------- ------ ------------- -------------
Current liabilities
Trade and other payables 22 1,731,114 1,348,867
Lease liability 24 130,949 129,819
Deferred income 21 108,994 40,763
1,971,057 1,519,449
-------------------------------- ------ ------------- -------------
TOTAL EQUITY AND LIABILITIES 34,529,663 10,880,366
-------------------------------- ------ ------------- -------------
These Financial Statements were approved and authorised for
issue by the Board of Directors on 17 May 2022 and were signed on
its behalf by:
Kenneth West
Non-Executive Chairman
Company Statement of Financial Position
Notes 2021 2020
US$ US$
ASSETS
Non-current assets
Investment in subsidiary 13 58,180,314 24,735,727
58,180,314 24,735,727
-------------------------------- ------ ------------ ------------
Current assets
Trade and other receivables 14 22,410 61,304
Cash and cash equivalents 16 2,454,491 911,271
------------
2,476,901 972,575
-------------------------------- ------ ------------ ------------
TOTAL ASSETS 60,657,215 25,708,302
-------------------------------- ------ ------------ ------------
EQUITY AND LIABILITIES
Equity attributable to holders
of the parent
Share capital 17 101,642 78,200
Share premium 18 59,022,919 23,840,571
Merger reserve 18 4,322,527 4,322,527
Share-based payment reserve 19 3,355,301 1,540,419
Accumulated losses 18 (6,251,190) (4,122,345)
-------------------------------- ------ ------------ ------------
60,551,199 25,659,372
-------------------------------- ------ ------------ ------------
Current liabilities
Trade and other payables 22 106,016 48,930
106,016 48,930
-------------------------------- ------ ------------ ------------
TOTAL EQUITY AND LIABILITIES 60,657,215 25,708,302
-------------------------------- ------ ------------ ------------
For the year under review, the amount due from subsidiary
undertaking is regarded as net investment and is therefore
reclassified from trade and other receivable to investment in
subsidiary, and their respective comparatives were also
restated.
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$2,128,845 (2020: US$908,895).
These financial statements were approved and authorised for
issue by the Board of Directors on 17 May 2022 and were signed on
its behalf by:
Kenneth West
Non-Executive Chairman
Consolidated Statement of Changes in Equity
Group
Share-based re-organisation Accumulated
Share capital Share premium payment reserve reserve losses Total equity
US$ US$ US$ US$ US$ US$
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
As at 1 January
2020 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 - - 414,716
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
As at 31
December 2020
(audited) 78,200 23,840,571 1,845,450 7,813,337 (24,844,204) 8,733,354
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
Comprehensive
income
Loss for the
year - - - - (14,016,004) (14,016,004)
Transactions
with owners
Issue of shares 23,442 37,284,454 - - - 37,307,896
Share issue
costs - (2,102,106) - - - (2,102,106)
Share-based
payment expense - - 1,814,882 - - 1,814,882
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
As at 31
December 2021 101,642 59,022,919 3,660,332 7,813,337 (38,860,208) 31,738,022
----------------- -------------- -------------- ---------------- ---------------- ---------------- -------------
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
2020 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
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
Comprehensive
income
Loss for the
year - - - - (2,128,845) (2,128,845)
Transactions
with owners
Issue of shares 23,442 37,284,454 - - - 37,307,896
Share issue
costs - (2,102,106) - - - (2,102,106)
Share-based
payment expense - - 1,814,882 - - 1,814,882
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
As at 31
December 2021 101,642 59,022,919 3,355,301 4,322,527 (6,251,190) 60,551,199
----------------- -------------- -------------- ---------------- --------------- ----------------- -------------
Consolidated Statement of Cash Flows
2020
2021 US$ US$
---------------------------------------------------- ------------- ------------
Cash flows from operating activities
Loss before tax (14,016,004) (6,534,522)
Adjustments for non-cash/non-operating items:
Depreciation of plant and equipment 177,349 150,224
Amortisation of intangible assets and right-of
use-assets 757,015 734,058
Loss on disposal of property, plant and equipment 590 -
Loss on remeasurement of right-of-use assets 11,660 -
Share-based payment expense 1,814,882 474,716
Finance expense 21,101 19,730
Finance income (321,544) (100,769)
Operating cash outflows before movements in
working capital (11,554,95) (5,256,563)
---------------------------------------------------- ------------- ------------
Increase in inventories (448,886) (423,093)
(Increase)/decrease in trade and other receivables (622,901) 288,096
Increase/(decrease) in trade and other payables 382,247 (424,714)
(Decrease)/increase in deferred income (5,976) 21,576
---------------------------------------------------- ------------- ------------
Net cash used in operations (12,250,467) (5,794,698)
---------------------------------------------------- ------------- ------------
Cash flows from investing activities
Purchase of plant and equipment (541,454) (65,531)
Net cash used in investing activities (541,454) (65,531)
---------------------------------------------------- ------------- ------------
Cash flows from financing activities
Issue of shares 37,307,896 10,725,797
Cost of issue (2,102,106) (522,714)
Interest paid on lease liabilities -(21,101) (19,730)
Interest received 321,544 100,769
Principal elements of lease payments (122,069) (103,097)
Net cash generated by financing activities 35,384,164 10,181,025
---------------------------------------------------- ------------- ------------
Net increase in cash and cash equivalents 22,592,243 4,320,796
---------------------------------------------------- ------------- ------------
Cash and cash equivalents at the beginning
of year 6,282,665 1,961,869
---------------------------------------------------- ------------- ------------
Cash and cash equivalents at end of year 28,874,908 6,282,665
---------------------------------------------------- ------------- ------------
Company Statement of Cash Flows
Year ended Year ended
31 December 31 December
2021 2020
US$ US$
------------------------------------------------- ------------- -------------
Cash flows from operating activities
Loss before tax (2,128,845) (908,895)
Adjustments for non-cash/non-operating items:
Share-based payment expense 1,814,882 474,716
Interest received (319,564) (100,358)
Operating cash outflows before movements
in working capital (633,527) (534,537)
------------------------------------------------- ------------- -------------
Increase in trade and other receivables 38,894 42,372
Increase/(decrease) in trade and other payables 57,086 (4,068)
------------------------------------------------- ------------- -------------
Net cash used by operations (537,547) (496,233)
------------------------------------------------- ------------- -------------
Cash flows from financing activities
Issue of shares 37,307,896 10,725,797
Cost of issue (2,102,106) (522,714)
Interest received 319,564 100,358
Loans to the Subsidiary (33,444,587) (8,952,702)
Net cash generated by financing activities 2,080,767 1,350,739
------------------------------------------------- ------------- -------------
Increase in cash and cash equivalents 1,543,220 848,506
------------------------------------------------- ------------- -------------
Cash and cash equivalents at the beginning
of period 911,271 56,765
------------------------------------------------- ------------- -------------
Cash and cash equivalents at end of period 2,454,491 911,271
------------------------------------------------- ------------- -------------
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:
-- Interest Rate Benchmark Reform (IBOR) reform Phase 2
(Amendments to IFRS 9, IAS 39 and IFRS 7); and
-- COVID-19-Related Rent Concessions beyond 30 June 2021 (Amendments to IFRS 16).
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).
The following amendments are effective for the period beginning
1 January 2023:
-- Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);
-- Definition of Accounting Estimates (Amendments to IAS 8); and
-- Deferred Tax Related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12).
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
UK adopted International Accounting Standards ("IFRS") and under
the historical cost convention. The financial statements are
presented in United States Dollars ("US$") except where otherwise
indicated.
The principal accounting policies adopted in the preparation of
the financial statements are set out below. The policies have been
consistently applied to all the years presented, unless otherwise
stated.
Going concern
The 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 2021 the Group recorded a loss after tax of US$14,016,004
(2020: loss of US$6,534,523) and a net cash outflow from operating
activities of US $12,250,467 (2020: US$5,794,698).
During the year, the Group raised approximately US$37.3 million
from the placement of new shares. At the reporting the Group's cash
balance was US$28.9 million (2020: US$6.3 million). 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 is 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.
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 2021. The measurement bases and principal accounting
policies of the Group are set out below.
On 30 May 2017 Polarean Merger-Sub, Inc., a Subsidiary of the
Subsidiary, completed a merger process under which it acquired
substantially all of the assets of m2m Imaging Corp ("m2m"), a
portfolio company of Amphion Innovations plc engaged in the
development of high-performance MRI RF coils for the global
research market, primarily in micro-imaging. By 2016 m2m had been
inactive for several years due to an inability to raise funds. At
the date of the merger the assets of m2m were its technology and
patents. The merger was affected by way of court sanction in the
process of which the Subsidiary acquired, through a special purpose
entity, Polarean Merger Sub, Inc. the assets of another special
purpose entity, m2m Merger Sub, Inc., with m2m Merger Sub, Inc.
being the surviving entity. After the reporting date, on 1
September 2017, m2m Merger Sub, Inc. was merged into the Subsidiary
with the Subsidiary being the surviving entity, the effect being
that m2m Merger Sub, Inc. was collapsed, and the Subsidiary had
acquired the m2m assets.
As part of the arrangements for the merger 576,430 shares in the
Subsidiary were issued to the former shareholders in m2m with the
intention that all parties would exchange their stock in Polarean,
Inc. for shares in the Group on a pro rata basis as soon as
practicable.
The Directors consider the merger between the Subsidiary and m2m
Acquisition, Inc. as a consequence of which the group acquired the
exclusive worldwide rights to m2m's technology and patents does not
meet the definition of an acquisition of a business as set out in
IFRS3 and has therefore been accounted for as the acquisition of an
asset or a group of assets that does not constitute a business.
IFRS 3 requires that in such cases the acquirer shall identify
and recognise the individual identifiable assets acquired
(including those assets that meet the definition of, and
recognition criteria for, intangible assets in IAS 38 Intangible
assets) and to allocate the cost of the individual identifiable
assets and liabilities on the basis of their relative fair values
at the date of purchase. Such a transaction or event does not give
rise to goodwill.
The fair value of the assets acquired under the merger
arrangement of US$4,999,996 represents the aggregate estimated
value of the financial obligations of the former m2m shareholders
which were converted into equity in m2m prior to the merger
agreement.
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 the goods are delivered to the
customer.
The second performance obligation is the sale of parts and
upgrades. The customer can benefit from the use of the parts and
upgrade when supplied and is not reliant on the Group to provide
the service, and therefore revenue from the sale of parts and
upgrades is recognised in full when the goods are delivered to the
customer.
The third performance obligation is the provision of preventive
maintenance service. Revenue from the provision of preventive
maintenance service is recognised over the period when the services
are rendered. A contract liability represents the obligation of the
Group to render services to a customer for which consideration has
been received (or the amount is due) from the customer.
Determining the transaction price
The transaction price is determined as the fair value of the
Group expects to receive over the course of the contract.
There are no incentives given to customers that would have a
material effect on the financial statements.
Allocate the transaction price to the performance obligations in
the contract
The allocation of the transaction price to the performance
obligations in the contract is non-complex for the Group. There is
a fixed unit price for each product or service sold. Therefore,
there is limited judgement involved in allocating the contract
price to each unit ordered.
Recognise revenue when or as the entity satisfies its
performance obligations
The overarching terms are consistent in each contract.
The sale of polarisers is seen as a distinct performance
obligation and revenue is recognised at a point in time, when title
of the goods transferred to the customer, as the customer can
benefit from the use of the polarisers when supplied.
The sale of parts and upgrades is seen as a distinct performance
obligation and revenue is recognised at a point in time, when
supplied to the customer, as the customer can benefit from the use
of the parts and upgrade when supplied.
The provision of service is seen as a distinct performance
obligation and revenue is recognised as the Group provides these
services for the duration of the contract, i.e. over time. Any
unexpired portion of a service contract or payment received in
advance in respect of service contracts either partially completed
or not started, are included in deferred income and released over
their remaining term.
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
administrative expenses 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 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
requires the directors to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities. Estimates and
judgements are continually evaluated and are based on historical
experience and other factors including expectations of future
events that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates.
The directors consider that the following judgements are likely
to have the most significant effect on the amounts recognised in
the financial statements.
Carrying value of intangible assets - Group
In determining whether there are indicators of impairment of the
Group's intangible assets, the directors take into consideration
various factors including the economic viability and expected
future financial performance of the asset and when it relates to
the intangible assets arising on a business combination, the
expected future performance of the business acquired.
Carrying value of investments in and amounts receivable from
subsidiaries - Company
In determining whether there are indicators of impairment of the
Company's investments in, and amounts receivable from, its
subsidiary undertakings, the directors take into consideration
various factors including the economic viability and expected
future financial performance of the business of the subsidiary
undertakings.
4. Segmental information
IFRS 8 requires operating segments to be identified on the basis
of internal reports about components of the Group that are
regularly reviewed by the chief operating decision maker (which
takes the form of the Board of Directors) as defined in IFRS 8, in
order to allocate resources to the segment and to assess its
performance.
The chief operating decision maker has determined that the Group
has one operating segment, the development and commercialisation of
gas polariser devices and ancillary instruments. Revenues are
reviewed based on the products and services provided: Polarisers,
Parts and Upgrades, Service and Other revenue.
The Group operates in Canada, Germany, the United Kingdom and
the United States of America. Revenue by origin of geographical
segment for all entities in the Group is as follows:
Revenue
2021 2020
US$ US$
-------------------------- ---------- ----------
Canada 529,824 85,728
Germany 6,750 -
United Kingdom 25,183 34,304
United States of America 623,670 936,734
-------------------------- ---------- ----------
Total 1,185,427 1,056,766
-------------------------- ---------- ----------
Non-current assets
2021 2020
US$ US$
-------------------------- ---------- ----------
United States of America 3,256,977 3,271,710
-------------------------- ---------- ----------
Total 3,256,977 3,271,710
-------------------------- ---------- ----------
Product and services revenue analysis
Revenue
2021 2020
US$ US$
-------------------- ---------- ----------
Polarisers 826,059 536,350
Parts and Upgrades 275,789 158,275
Service 83,579 61,991
Grants - 300,151
-------------------- ---------- ----------
Total 1,185,427 1,056,766
-------------------- ---------- ----------
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:
2021 2020
US$ US$
---------------------- --------- ---------
Wages and salaries 3,604,758 2,265,077
Healthcare benefits 220,476 142,942
Social Security costs 248,063 132,941
---------------------- --------- ---------
4,073,297 2,540,959
---------------------- --------- ---------
Average monthly number of people (including directors) employed
by activity:
2021 2020
No. No.
Senior management including directors 10 10
R&D and clinical trial 11 8
Administration 7 3
----------------------------------------------------- ------ -----
Total 28 21
----------------------------------------------------- ------ -----
Key management compensation:
The following table details the aggregate compensation paid to
key management personnel.
2021 2020
US$ US$
---------------------- ---------- ----------
Salaries and fees 1,394,235 1,242,468
Healthcare benefits 85,830 78,065
Social security costs 69,465 70,968
1,549,530 1,391,501
====================== ========== ==========
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
2021 2020
US$ US$
------------------------------------------------- ---------- --------
Depreciation
* Owned property, plant and equipment 177,349 150,224
Amortisation of right-of-use assets 140,164 117,206
Amortisation of intangible assets 616,851 616,852
Subtotal Amortisation 757,015 734,058
Research expenses 649,695 451,129
Auditors' remuneration (note 8) 55,664 49,000
Clinical trial costs (52,599) 427,155
Regulatory consulting costs 1,126,675 788,903
Legal and professional fees 494,688 298,850
Brand development and market research 2,091,921 348,510
Medical affairs and congress/symposia 916,238 23,625
7. Net finance expense
2021 2020
US$ US$
----------------------- -------- --------
Foreign exchange gain 318,957 100,358
Sundry income 2,587 411
------------------------ -------- --------
Total finance income 321,544 100,769
------------------------ -------- --------
Finance expense 21,101 19,730
------------------------ -------- --------
Total finance expense 21,101 19,730
------------------------ -------- --------
8. Auditor remuneration
2021 2020
US$ US$
----------------------------------------------- ------- -------
Auditors' remuneration
Fees payable to the Group's auditor
for audit of Parent Company and Consolidated
Financial Statements 55,664 49,000
------------------------------------------------ ------- -------
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:
2021 2020
US$ US$
----------------------------------------------- ----------------- ------------
Loss for the year attributable to shareholders
of the Group (US$) (14,016,004) (6,534,523)
Weighted average number of ordinary shares 196,961,274 149,985,929
----------------------------------------------- ----------------- ------------
Basic and diluted loss per share (0.071) (0.044)
----------------------------------------------- ----------------- ------------
For diluted loss per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
potential dilutive warrants, options and convertible loans over
ordinary shares. Potential ordinary shares resulting from the
exercise of warrants, options and the conversion of convertible
loans have an anti-dilutive effect due to the Group being in a loss
position. As a result, diluted loss per share is disclosed as the
same value as basic loss per share.
10. Taxation
There were no charges to current corporate taxation due to the
losses incurred by the Group in the period.
Income taxes computed at the statutory federal income tax of 21
% (2020: 21%) and the state income tax of 2.50 % (2020: 2.50%) UK
corporation tax is calculated at 19% of the estimated assessable
profits for the year.
2021 2020
US$ US$
---------------------------------------------------- ------------- ------------
Loss on ordinary activities before tax (14,016,004) (6,534,523)
---------------------------------------------------- ------------- ------------
Loss on ordinary activities multiplied by
the rate of corporation tax in the US as
above (2,943,361) (1,372,250)
Effects of:
Adjustments for rate of tax in other jurisdictions 42,577 26,611
Unrelieved tax losses carried forward 2,900,784 1,345,639
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.
The Company has tax losses carried forward of US $33,391,842
(2020: $19,375,838). The unutilised tax losses have not been
recognised as a deferred tax asset due to uncertainty over the
timing of future profits and gains. In addition, there are
approximately $531,000 (2020: $227,000) of unrecognised deferred
tax assets in respect of the share-based payment.
11. Property, plant and equipment
Leasehold Furniture Computers
improvements and equipment and IT equipment Total
US$ US$ US$ US$
--------------------------
Cost
At 1 January 2020 2,695 433,950 26,665 463,310
Additions 10,963 14,252 40,316 65,531
Disposals (7,412) (7,708) (15,120)
At 31 December 2020 13,658 440,790 59,273 513,721
-------------------------- -------------- --------------- ------------------ ----------
Additions 17,050 464,585 59,819 541,454
Disposals - - (1,328) (1,328)
At 31 December 2021 30,708 905,375 117,764 1,053,847
-------------------------- -------------- --------------- ------------------ ----------
Accumulated depreciation
At 1 January 2020 1,977 82,109 23,266 107,352
Depreciation expense 4,091 138,314 7,820 150,225
Disposals (7,412) (7,708) (15,120)
At 31 December 2020 6,068 213,012 23,377 242,457
-------------------------- -------------- --------------- ------------------ ----------
Depreciation expense 7,934 146,656 22,759 177,349
Disposals - - (738) (738)
-------------------------- -------------- --------------- ------------------ ----------
At 31 December 2021 14,002 359,668 45,398 419,068
-------------------------- -------------- --------------- ------------------ ----------
Carrying amount
At 31 December 2020 7,590 227,778 35,896 271,264
-------------------------- -------------- --------------- ------------------ ----------
At 31 December 2021 16,706 545,707 72,366 634,779
-------------------------- -------------- --------------- ------------------ ----------
12. Intangible assets
Patents Total
US$ US$
-------------------------- ---------- ----------
Cost
At 1 January 2020 5,045,996 5,045,996
Additions - -
At 31 December 2020 5,045,996 5,045,996
-------------------------- ---------- ----------
Additions - -
-------------------------- ---------- ----------
At 31 December 2021 5,045,996 5,045,996
-------------------------- ---------- ----------
Accumulated amortisation
At 1 January 2020 1,618,450 1,618,450
Amortisation expense 616,852 616,852
At 31 December 2020 2,235,302 2,235,302
-------------------------- ---------- ----------
Amortisation expense 616,851 616,851
At 31 December 2021 2,852,153 2,852,153
-------------------------- ---------- ----------
Carrying amount
At 31 December 2020 2,810,694 2,810,694
-------------------------- ---------- ----------
At 31 December 2021 2,193,843 2,193,843
-------------------------- ---------- ----------
13. Investment in subsidiary undertaking
Investment Amount due
in subsidiary from subsidiary
undertaking undertaking Total
Company US$ US$ US$
--------------------- --------------- ----------------- -----------
Cost
At 31 December 2020 4,342,848 20,392,879 24,735,727
At 31 December 2021 4,342,848 53,837,466 58,180,314
--------------------- --------------- ----------------- -----------
Carrying amount
At 31 December 2020 4,342,848 20,392,879 24,735,727
At 31 December 2021 4,342,848 53,837,466 58,180,314
--------------------- --------------- ----------------- -----------
The investment in subsidiary undertaking is stated at cost less
provision for impairment. The amount due from subsidiary
undertaking are regarded as net investment which is subject to the
impairment assessment whenever events or changes in circumstance
indicate that the carrying value of the investment and the amount
due from subsidiary undertakings may not be recoverable. For the
year under review, there is no such indicator for impairment.
The net carrying amounts noted above relates to the Subsidiary.
The subsidiary undertaking during the year were as follows:
Interest
Country 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 2021 2020 2021 2020
after one year US$ US$ US$ US$
--------------------- ------ ------ ----- -----
Rental deposit 5,539 5,539 - -
---------------------- ------ ------ ----- -----
Group Company
Amounts falling due within 2021 2020 2021 2020
one year US$ US$ US$ US$
------------------------------ -------- -------- ------- -------
Trade receivables 119,096 185,473 - -
Other receivables - 51,184 - 51,184
Prepayments 851,872 111,410 22,410 10,120
970,968 348,067 22,410 61,304
------------------------------ -------- -------- ------- -------
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 $'000
----- ------ ------- ------ ------ ----------- ------ ---------
2021 73,500 - 45,097 499 119,096 - 119,096
2020 27,116 155,785 2,572 - 185,473 - 185,473
----- ------ ------- ------ ------ ----------- ------ ---------
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses (ECL) which uses a lifetime expected loss
allowance for all trade receivables. The ECL balance has been
determined based on historical data available to management in
addition to forward looking information utilising management
knowledge. The Company applies a similar approach to measuring ECL
for the amounts due from group undertakings.
Trade receivables are amounts due from customers for goods sold
or services performed in the ordinary course of business. They are
generally due for settlement within 30 days and therefore are all
classified as current. The majority of trade and other receivables
are non-interest bearing. Where the effect is material, trade and
other receivables are discounted using discount rates which reflect
the relevant costs of financing. The carrying amount of trade and
other receivables approximates fair value.
The group trade receivables include governments grants which
amounted to US$Nil (2020: US$42,735) in which there are no
unfulfilled conditions or contingencies attached to these grants as
of 31 December 2021.
15. Inventory
Group
2021 2020
US$ US$
Component parts 1,426,810 977,924
------------------ ---------- --------
During the year ended 31 December 2021, a total of $677,402 of
inventories was included in the statement of comprehensive income
as an expense (2020: $346,300).
16. Cash and cash equivalents
Group Company
2021 2020 2021 2020
US$ US$ US$ US$
Cash at bank and in hand 28,874,908 6,282,665 2,454,491 911,271
--------------------------- ----------- ---------- ---------- --------
17. Share capital
The issued share capital of the Company was as follows:
Allotted and called up
- Ordinary shares of 0.037p 2021 2021 2020 2020
each No. US$ No. US$
------------------------------ ------------ -------- ------------ -------
At beginning of period 163,212,935 78,200 114,438,600 55,776
Issue of shares upon warrant
exercise 928,089 474 830,538 386
Issue of shares to investors 44,932,142 22,881 46,624,997 21,386
Issue of shares upon option
exercise 176,800 87 1,318,800 652
------------------------------ ------------ -------- ------------ -------
At end of year 209,249,966 101,642 163,212,935 78,200
------------------------------ ------------ -------- ------------ -------
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.
On 24 February 2021, the Company issued 61,563 new ordinary
shares upon the exercise of share warrants with an exercise price
of GBP0.15 each.
On 25 March 2021, the Company issued 358,713 new ordinary shares
upon the exercise of share warrants with an exercise price of
GBP0.00037 each.
On 31 March 2021, 7 April 2021 and 8 April 2021 the Company
issued a total of 44,932,142 new ordinary shares of GBP0.00037 each
in the capital of the Company at the issue price of 60 pence per
share in a Placing, Subscription and Open Offer for total proceeds
of GBP27 million (before expenses).
On 16 April 2021, the Company issued 467,733 new ordinary shares
upon the exercise of share warrants with an exercise price of
GBP0.00037 each.
On 17 May 2021, the Company issued 40,080 new ordinary shares
upon the exercise of share warrants with an exercise price of
GBP0.00037 each.
On 23 November 2021, the Company issued 66,800 new ordinary
shares upon the exercise of share options with an exercise price of
GBP0.025358 each.
On 9 December 2021, the Company issued 110,000 new ordinary
shares upon the exercise of share options with an exercise price of
GBP0.15 each.
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
2021 2021 2020 2020
-------------------------- -------------- ----------------- ----------- -----------------
Outstanding at beginning
of year 16,884,322 0.19 17,436,722 0.13
Granted during the year 8,580,000 1.11 900,000 0.99
Exercised during the
year (176,800) 0.14 (1,318,800) 0.19
Forfeited/lapsed during
the year (844,210) 1.01 (133,600) 0.00
Outstanding at end of
the year 24,443,312 0.50 16,884,322 0.19
-------------------------- -------------- ----------------- ----------- -----------------
Exercisable at end of
the year 13,055,517 0.14 10,239,882 0.12
-------------------------- -------------- ----------------- ----------- -----------------
On 23 December 2020, 900,000 options were granted, with an
exercise price of 73 pence per share. 25% of the options shall vest
on the one year anniversary of the employee's date of hire with the
remaining 75% vesting in equal portions over the 36 months
following the one year anniversary of the employee's date of
hire.
On 27 April 2021, 1,000,000 options were granted, with an
exercise price of 77 pence per share. 25% of the options shall vest
on the one-year anniversary of the employee's date of hire with the
remaining 75% vesting in equal portions over the 36 months
following the one year anniversary of the employee's date of
hire.
On 24 June 2021, 250,000 options were granted, with an exercise
price of 95 pence per share. 25% of the options shall vest on the
one-year anniversary of the employee's date of hire with the
remaining 75% vesting in equal portions over the 36 months
following the one year anniversary of the employee's date of
hire.
19. Share based payments continued
On 07 July 2021, 5,250,000 options were granted, with an
exercise price of 93 pence per share . 25% of the options shall
vest on the one-year anniversary of the employee's date of hire
with the remaining 75% vesting in equal portions over the 36 months
following the one year anniversary of the employee's date of
hire.
On 26 August 2021, 1,300,000 options were granted, with an
exercise price of 87 pence per share . 25% of the options shall
vest on one-year anniversary of the employee's date of hire with
the remaining 75% vesting in equal portions over the 36 months
following the one year anniversary of the employee's date of
hire.
On 08 September 2021, 430,000 options were granted, with an
exercise price of 89 pence per share. 25% of the options shall vest
on the one-year anniversary of the employee's date of hire with the
remaining 75% vesting in equal portions over the 36 months
following the one year anniversary of the employee's date of
hire.
On 21 October 2021, 150,000 options were granted, with an
exercise price of 63 pence per share . 25% of the options shall
vest on the one-year anniversary of the employee's date of hire
with the remaining 75% vesting in equal portions over the 36 months
following the one year anniversary of the employee's date of
hire.
On 14 December 2021, 200,000 options were granted, with an
exercise price of 57 pence per share . 25% of the options shall
vest on the one-year anniversary of the date of hire with the
remaining 75% vesting in equal portions over the 36 months
following the one year anniversary of the employee's date of
hire... The options outstanding as at 31 December 2021 have an
exercise price in the range of US$0.0041 to US$1.19 (2020:
US$0.0041 to US$0.99).
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$0.43 and US$0.60. This is based
on risk-free rates of between 0.60% and 1.20% and volatility of
between 57% and 80%.
The Black Scholes calculations for the options resulted in a
charge of US$1,814,882 (2020: US$474,716) which has been expensed
in the year. The weighted average remaining contractual life of the
share options is 6.85 years (2020: 6.47 years). The weighted
average share price at the date of exercise for all share options
exercised during the period was US$0.58 (2020: $0.73). All share
options are equity settled on exercise.
Share warrants
The Company grants share warrants at its discretion to
Directors, management, employees, advisors and lenders. These are
accounted for as equity settled transactions. Terms of warrants
vary from agreement to agreement.
Details for the warrants granted, exercised, lapsed and
outstanding at the year-end are as follows:
Weighted
Weighted average
average exercise Number of exercise
price (US$) share warrants price (US$)
Number of
share warrants
2021 2021 2020 2020
-------------------------- ---------------- ------------------- ---------------- --------------
Outstanding at beginning
of year 3,994,165 0.09 4,824,703 0.09
Exercised during the
year (928,089) 0.34 (830,538) 0.13
Forfeited/lapsed during
the year (11,947) 0.34 - -
Outstanding at end of
the year 3,054,129 0.01 3,994,165 0.09
-------------------------- ---------------- ------------------- ---------------- --------------
Exercisable at end of
the year 3,054,129 0.01 3,994,165 0.09
-------------------------- ---------------- ------------------- ---------------- --------------
The weighted average remaining contractual life of the share
warrants is 2.55 years (2020: 2.81 years). The weighted average
share price at the date of exercise for all share warrants
exercised during the period was US$0.68 (2020: $0.31).
20. Provision for contingent consideration
Group Company
2021 2020 2021 2020
US$ 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 2021, the fair value
of this contingent consideration was US$316,000 (2020: US$316,000).
This liability is valued based on a probability weighted expected
return method using projected future cash flows. There were no
significant events in the year ended 31 December 2021 necessitating
revision of the probability weighted expected value of the
contingent consideration.
There was therefore US$Nil profit or loss arising on revaluation
of contingent consideration during the year ended 31 December 2021
(2020: US$Nil).
21. Deferred income
Group Company
2021 2020 2021 2020
US$ US$ US$ US$
------------------------- -------- -------- ----- -----
Arising from service
contracts
Balance brought forward 260,717 239,141 - -
Movement for the year (5,976) 21,576 - -
------------------------- -------- -------- ----- -----
Balance carried forward 254,741 260,717 - -
------------------------- -------- -------- ----- -----
Current 108,994 40,763 - -
Non-current 145,747 219,954 - -
------------------------- -------- -------- ----- -----
Total 254,741 260,717 - -
------------------------- -------- -------- ----- -----
22. Trade and other payables
Group Company
2021 2020 2021 2020
US$ US$ US$ US$
----------------------------- ---------- ---------- -------- -------
Trade payables 405,953 388,030 40,887 4,930
Accruals and other payables 1,325,161 960,837 65,129 44,000
----------------------------- ---------- ---------- -------- -------
1,731,114 1,348,867 106,016 48,930
----------------------------- ---------- ---------- -------- -------
Trade payables and accruals principally comprise amounts
outstanding for trade purchases and ongoing costs and are payable
within 1 year.
The Directors consider the carrying value of all financial
liabilities to be equivalent to their fair value.
23. Changes in liabilities from financing activities
Group
1 January Non-cash 31 December
2020 Cash flows changes 2020
US$ US$ US$ US$
--------------------------------- --------- ---------- --------- -----------
Lease liability 121,369 (122,827) 222,886 221,428
--------------------------------- --------- ---------- --------- -----------
Total liabilities from financing
activities 121,369 (122,827) 222,886 221,428
--------------------------------- --------- ---------- --------- -----------
1 January Non-cash 31 December
2021 Cash flows changes 2021
US$ US$ US$ US$
--------------------------------- --------- ---------- --------- -----------
Lease liability 221,428 (143,170) 411,528 489,786
--------------------------------- --------- ---------- --------- -----------
Total liabilities from financing
activities 221,428 (143,170) 411,528 489,786
--------------------------------- --------- ---------- --------- -----------
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.
2021 2020
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 2020 98,263
Additions 203,156
Amortisation expense (117,206)
At 31 December 2020 184,213
----------------------- -----------
At 1 January 2021 184,213
Additions 378,767
Amortisation expense (140,164)
At 31 December 2021 422,816
----------------------- -----------
24. Leases continued
Lease Liabilities
Land and
Buildings
US$
--------------------- -----------
At 1 January 2020 121,369
Additions 203,156
Interest expense 19,730
Lease payments (122,827)
--------------------- -----------
At 31 December 2020 221,428
--------------------- -----------
At 1 January 2021 221,428
Additions 390,427
Interest expense 21,101
Lease payments (143,170)
--------------------- -----------
At 31 December 2021 489,786
--------------------- -----------
Analysis of lease liabilities
Maturity of the lease liabilities is analysed as follows:
2021 2020
US$ US$
----------------------------------------- -------- --------
Within 1 year 130,949 129,819
Later than 1 year and less than 5 years 358,837 91,609
489,786 221,428
----------------------------------------- -------- --------
25. Commitments
Royalty commitments
The Subsidiary has entered into three agreements requiring
royalty payments. One agreement is conditional and requires a
payment of 5 per cent. of gross revenue on clinical sales during
the payment period beginning on the date a product is first
commercially sold, contingent on receiving FDA approval, and ending
seven years from that date. A separate agreement requires payments
of 0.25 per cent of net sales of machines, and 20 per cent of any
sublicensing income for a specific method of use of patent
beginning in 2016. Additionally, beginning five years after the
effective date of 1 February 2021, there are minimum yearly
royalties of US$5,000. The third agreement requires a fixed payment
of US$250,000 for use of patents.
26. Financial instruments
The Group has exposure to the following key risks related to
financial instruments:
i. Market risk
ii. Credit risk
iii. Liquidity risk
This note presents information about the Group's exposure to
each of the above risks, the Group's objectives, policies and
processes for measuring and managing risk, and the Group's
management of capital. Further quantitative disclosures are
included throughout these consolidated Financial Statements.
The Group uses financial instruments including cash, loans, as
well as trade receivables and payables that arise directly from
operations.
Due to the simple nature of these financial instruments, there
is no material difference between book and fair values, discounting
would not give a material difference to the results of the Group
and the Directors believe that there are no material sensitivities
that require additional disclosure.
(a) Credit risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Subsidiary. In order to minimise the risk, the Subsidiary
endeavours only to deal with companies which are demonstrably
creditworthy and this, together with the aggregate financial
exposure, is continuously monitored. The maximum exposure to credit
risk is the value of the outstanding amount. The Group considers
the banks and financial institutions have low credit risks.
Therefore, the Group is of the view that the loss allowance is
immaterial and hence no provision is required.
The Directors do not consider that there is any concentration of
risk within either trade or other receivables. There are no
impairments to trade or other receivables in each of the years
presented.
Categories of financial instruments
Group Company
Financial assets measured 2021 2020 2021 2020
at amortised cost US$ US$ US$ US$
-------------------------------- ----------- ---------- ---------- --------
Cash and cash equivalents 28,874,908 6,282,665 2,454,491 911,271
Loans and receivables
Trade and other receivables
- current 119,096 236,657 - 51,184
Trade and other receivables
- non-current 5,539 5,539 - -
-------------------------------- ----------- ---------- ---------- --------
Financial liabilities measured
at amortised cost
Trade and other payables 1,731,114 1,348,867 106,016 48,930
-------------------------------- ----------- ---------- ---------- --------
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.
26. Financial instruments continued
(b) Market risk
There is no interest risk exposure to the group or the company.
The Company made unsecured interest-free loans to its subsidiary
and are expected to be repaid in the future as the subsidiary is
revenue generative.
(c) Liquidity risk
A maturity analysis of the Group's financial liabilities is
shown below:
Contractual
Carrying undiscounted Less than One to Two to
amounts cashflow one year two years five years
US$ US$ US$ US$ US$
------------------- ---------- -------------- ---------- ------------ ------------
2021
Trade and other
payables 1,731,114 1,731,114 1,731,114 - -
Lease liabilities 489,786 539,145 154,710 158,135 226,300
2,220,900 2,270,259 1,885,824 158,135 226,300
------------------- ---------- -------------- ---------- ------------ ------------
2020
Trade and other
payables 1,348,867 1,348,867 1,348,867 - -
Lease liabilities 221,428 237,631 143,410 82,670 11,551
1,570,295 1,586,498 1,492,277 82,670 11,551
------------------- ---------- -------------- ---------- ------------ ------------
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
Between 1 January 2022 and 30 April 2022, the Company issued a
total of 3,190,024 new ordinary shares of GBP0.00037 each in the
capital of Company upon the exercise of share options.
Between 1 January 2022 and 4 May 2022, the Company granted
options over a total of 1,070,000 ordinary shares of GBP0.00037
each in the capital of Company to a new employee and two new
Directors. The options vest over a four-year period and have an
exercise price equal to the closing price on the date of grant.
On 13 April 2022 and 4 May 2022, the Company appointed Frank
Schulkes, Non-Executive Director and Daniel Brague, Non-Executive
Director to the Board of Directors, respectively.
On 4 May 2022, Jonathan Allis resigned as Non-Executive Director
from the Board of Directors.
On 4 May 2022, Kenneth West assumed the role of Non-Executive
Chairman of the Board of Directors.
Notice of the Annual General Meeting
POLAREAN IMAGING PLC
(Incorporated in England and Wales under the Companies Act 2006
with company number 10442853)
NOTICE OF ANNUAL GENERAL MEETING
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE
ATTENTION
If you are in any doubt as to what action you should take, you
are recommended to seek your own financial advice from your
stockbroker or other independent adviser authorised under the
Financial Services and Markets Act 2000.
If you have recently sold or transferred all of your shares in
Polarean Imaging plc, please forward this document, together with
the accompanying documents, as soon as possible either to the
purchaser or transferee or to the person who arranged the sale or
transfer so they can pass these documents to the person who now
holds the shares.
It is intended that the Annual General Meeting (the "AGM") of
Polarean Imaging plc (the "Company") will be held at the Company's
office at 2500 Meridian Parkway, Suite 175, Durham, NC 27713 USA at
2:00 p.m. BST (9:00 a.m. EST) on 29 June 2022. 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
2:00 p.m. BST (9:00 a.m. EST) on 29 June 2022 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 2021 and the Directors' of the Company
(the "Director(s)") and auditors' reports thereon.
2. To consider and approve the remuneration report as detailed
in the Company's annual report and accounts.
3. To re-appoint Crowe UK LLP as auditor of the Company (the
"Auditor") to hold office until the conclusion of the next general
meeting at which accounts are laid and to authorise the Directors
to fix the Auditor's remuneration.
4. To re-elect Richard Hullihen 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 Bastiaan Driehuys as a Director, who retires in
accordance with article 78 of the Articles, and who, being
eligible, offers himself for re-election.
6. To re-elect Frank Schulkes as a Director, who retires in
accordance with article 83 of the Articles, and who, being
eligible, offers himself for re-election.
7. To re-elect Daniel Brague as a Director, who retires in
accordance with article 83 of the Articles, and who, being
eligible, offers himself for re-election.
8. To generally and unconditionally authorise the Directors for
the purpose of section 551 of the Companies Act 2006 (the "Act"),
in substitution for all existing authorities to the extent unused,
to exercise all the powers of the Company to allot or grant rights
to subscribe for or to convert any security into shares in the
Company up to an aggregate number of 31,865,998 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:
9. Subject to the passing of resolution 8 above, to empower the
Directors, pursuant to the general authority conferred on them and
section 570 of the Act, to allot equity securities (within the
meaning of section 560 of the Act) for cash as if section 561 of
the Act did not apply to any such allotment, provided that this
power shall be limited to the allotment of equity securities:
9.1. 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
9.2. wholly for cash (otherwise than pursuant to paragraph 7.1
above) up to an aggregate number of 31,865,998 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
17 May 2022 W1Q 8DH
NOTES
A shareholder entitled to attend and vote at the meeting
convened by this notice is entitled to appoint one or more proxies
to exercise all or any of their rights to attend, speak and vote on
their behalf at the AGM. A proxy need not be a shareholder.
(1) Arrangements for the meeting - COVID-19 outbreak
The continuing coronavirus (COVID-19) pandemic has previously
led to the imposition of severe restrictions on public gatherings.
Although it appears as at the date of this Notice that these will
not apply on the date of the AGM, 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 2:00 p.m. BST on 27 June
2022;
-- 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
2:00 p.m. BST on 24 June 2022. 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;
and
-- 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 AGM. Please carefully read the
instructions on how to complete the form of proxy. For a proxy to
be effective, the instrument appointing a proxy together with the
power of attorney or such other authority (if any) under which it
is signed or a notarised certified copy of the same must be
deposited with the Company's registrars, Share Registrars Limited
of 3 The Millennium Centre, Crosby Way, Farnham, Surrey, GU9 7XX,
United Kingdom (the "Registrars") or by e-mail to
voting@shareregistrars.uk.com, by 2:00 p.m. BST on 27 June 2022,
or, if the AGM is adjourned, 48 hours before the time fixed for the
adjourned meeting (excluding any part of a day that is not a
business day). The completion and return of a form of proxy does
not preclude a shareholder from subsequently attending and voting
at the AGM in person if he or she so wishes. If a shareholder has
appointed a proxy and attends the AGM in person, such proxy
appointment will automatically be terminated.
(3) Pursuant to Regulation 41 of Uncertificated Securities
Regulations 2001, the Company specifies that only those
shareholders on the register of members at 2:00 p.m. BST on 27 June
2022 or, if the meeting is adjourned, 48 hours before the time of
the adjourned meeting (excluding any part of a day that is not a
business day), shall be entitled to attend or vote at the AGM in
respect of the number of ordinary shares of GBP0.00037 each (the
"Ordinary Shares") registered in their name at that time. Changes
to the register of members after that time shall be disregarded in
determining the rights of any person to attend or vote at the
AGM.
(4) Any Shareholder may insert the full name of a proxy or the
full names of two alternative proxies of the Shareholder's choice
in the space provided with or without deleting 'the Chairman of the
meeting.' A proxy need not be a Shareholder but must attend the
meeting to represent the relevant Shareholder. The person whose
name appears first on the Form of Proxy and has not been deleted
will be entitled to act as proxy to the exclusion of those whose
names follow. If this proxy form is signed and returned with no
name inserted in the space provided for that purpose, the Chairman
of the meeting will be deemed to be the appointed proxy. Where a
Shareholder appoints as his/her proxy someone other than the
Chairman, the relevant Shareholder is responsible for ensuring that
the proxy attends the meeting and is aware of the Shareholder's
voting intentions. Any alteration, deletion or correction made in
the Form of Proxy must be initialled by the signatory/ies.
(5) A shareholder may appoint more than one proxy provided that
each proxy is appointed to exercise the rights attached to a
different Ordinary Share or Ordinary Shares held by that
shareholder. A shareholder may not appoint more than one proxy to
exercise rights attached to any one Ordinary Share. If a
shareholder wishes to appoint more than one proxy, they should
contact the Registrars on 01252 821390, +44 1252 821390 from
overseas. Lines are open from 9.00 a.m. to 5.30 p.m. Monday to
Friday, excluding public holidays. Alternatively, you may write to
the Registrars at Share Registrars Limited, 3 The Millennium
Centre, Crosby Way, Farnham, Surrey, GU9 7XX, United Kingdom for
additional proxy forms and for assistance.
(6) Any corporation which is a shareholder can appoint one or
more corporate representatives who may exercise on its behalf all
of its powers as a shareholder provided that they do not do so in
relation to the same Ordinary Share.
(7) As at the close of business on the date immediately
preceding this notice, the Company's issued share capital comprised
212,439,990 Ordinary Shares. Each Ordinary Share carries the right
to vote at the AGM and, therefore, the total number of voting
rights in the Company as at close of business on the date
immediately preceding this notice is 212,439,990.
(8) A shareholder's instructions to the proxy must be indicated
in the appropriate space provided. To abstain from voting on a
resolution, select the relevant 'Vote withheld' box. A vote
withheld is not a vote in law, which means that the vote will not
be counted in the calculation of votes for or against the
resolution. If no voting indication is given, your proxy will vote
or abstain from voting at his or her discretion. Your proxy will
vote (or abstain from voting) as he or she thinks fit in relation
to any other matter which is put before the meeting.
(9) This form of proxy must be signed by the appointor, or his
attorney duly authorised in writing. The power of attorney or other
authority (if any) under which the form of proxy is signed, or a
notarised certified copy of the power or authority, must be
received by the Registrars with the form of proxy. If the appointor
is a corporation, the form of proxy should be signed on its behalf
by an attorney or duly authorised officer or executed as a deed or
executed under common seal. In the case of joint holders, the
signature of any one of them will suffice, but the names of all
joint holders should be stated.
(10) CREST members who wish to appoint a proxy or proxies
through the CREST Electronic Proxy Appointment Service may do so
for the AGM to be held at 2:00 p.m. BST on 29 June 2022 and any
adjournment(s) thereof by following the procedures described in the
CREST manual. All messages relating to the appointment of a proxy
or an instruction to a previously appointed proxy, which are to be
transmitted through CREST, must be received by the Registrars (ID
7RA36) no later than 2:00 p.m. BST on 27 June 2022, or, if the AGM
is adjourned, 48 hours before the time fixed for the adjourned
meeting (excluding any part of a day that is not a business
day).
(11) In order to revoke a proxy instruction, you will need to
inform the Company by sending a signed hard copy notice clearly
stating your intention to revoke your proxy appointment to the
Registrars. In the case of a shareholder which is a company, the
revocation notice must be executed in accordance with note 12
below. Any power of attorney or any other authority under which the
revocation notice is signed (or a duly certified copy of such power
or authority) must be included with the revocation notice and must
be received by the Registrars not less than 48 hours (excluding any
part of a day that is not a business day) before the time fixed for
the holding of the AGM or any adjourned meeting (or in the case of
a poll before the time appointed for taking the poll) at which the
proxy is to attend, speak and to vote. If you attempt to revoke
your proxy appointment but the revocation is received after the
time specified then, subject to the paragraph directly below, your
proxy appointment will remain valid.
(12) A corporation's form of proxy must be executed under either
its common seal, if any, or under the hand of a duly authorised
officer or attorney, in each case as required under the laws of its
relevant jurisdiction.
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END
FR SFLFMWEESEII
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May 18, 2022 02:00 ET (06:00 GMT)
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