Interim / Quarterly Report • Oct 29, 2021
Interim / Quarterly Report
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Roquefort Investments plc (LSE:ROQ), the London listed investment company established to acquire businesses focused on early-stage opportunities in the medical biotechnology sector, is pleased to present its interim results for the six-month period ended 30 June 2021.
I am pleased to present the interim financial statements to shareholders for the six months ending 30 June 2021.
During the period under review the Company was primarily concerned with listing on the standard segment of the London Stock Exchange, which was successfully achieved on 22 March 2021. The Company then turned its attention to identifying and screening suitable businesses focused on early-stage opportunities in the medical biotechnology sector.
Post period end, on 29 September 2021 we were delighted to announce that Roquefort Investments had entered into non-binding term sheet ("Term Sheet") with Provelmare Holding S.A. to acquire 100% of the total issued equity in Lyramid Limited ("Lyramid") for an initial consideration of £1 million payable 50% in cash and 50% in shares (the "Transaction"). Lyramid has the exclusive worldwide licence to commercialise up to 37 patents related to Midkinebased therapies for the treatment of COVID-19 patients, cancer, autoimmune disorders and chronic kidney disease ("Midkine-Based Therapies").
The Directors of Roquefort Investments consider the Transaction to represent a transformational, value enhancing transaction for shareholders, which is fully aligned with the Company's growth strategy. Lyramid's global patent portfolio for Midkine-Based Therapies provides a platform to develop first-in-class drugs for the treatment of severe inflammatory diseases, autoimmune disorders and cancer. The therapeutic potential of Midkine-Based Therapies has been validated during more than 10 years of research including collaborations with leading academic centres and clinicians resulting in over 900 scientific publications.
To fund the Transaction, Roquefort Investments will be seeking to carry out a placing of new ordinary shares to new and existing investors ("Placing") to raise funds of up to £3 million to finance the cash component of the consideration, pre-clinical drug development and working capital. As such, the Transaction is conditional, inter alia, on a successful Placing.
Should the Transaction complete, it would constitute a Reverse Take-Over ("RTO") under the Listing Rules and accordingly the Company would apply for the re-admission of its shares to the Official List and the Main Market of the London Stock Exchange. Where an RTO is contemplated but has not yet been completed, the FCA will normally suspend a company's listing pending the publication of a prospectus prepared in accordance with the prospectus regulation rules of the FCA and approved by the FCA, or an announcement that the Transaction is not proceeding.
Therefore, at the request of the Company, the FCA suspended the Company's listing on the standard segment of the Official List as of 29 September 2021. Trading on the Main Market of the London Stock Exchange has also been suspended as of 29 September 2021.
I look forward to reporting our progress on this potentially transformative transaction to you in the coming weeks and thank all shareholders for their continued support.
For the 6 months to 30 June 2021 the Company reported a net loss of £301,232, mostly relating to administrative expenses involved with the listing. The Company maintained a strong balance sheet position at 30 June 2021, most notably holding cash at period end of £880,445.
The following directors have held office during the period to 30 June 2021:
Mr Stephen West (Executive Chairman) Mr Mark Rollins (Non-Executive Director) Dr Michael Stein (Non-Executive Director) Mr Glenn Whiddon (Non-Executive Director) – resigned 20 October 2021
The UK Corporate Governance Code (September 2014) ("the Code"), as appended to the Listing Rules, sets out the Principles of Good Corporate Governance and Code Provisions which are applicable to listed companies incorporated in the United Kingdom. As a standard listed company, the Company is not subject to the Code, but the Board recognises the value of applying the principles of the Code where appropriate and proportionate and has endeavoured to do so where practicable.
The Directors are responsible for preparing the Unaudited Interim Condensed Financial Statements in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority ("DTR") and with International Accounting Standard 34 on Interim Reporting ("IAS 34"). The directors confirm that, to the best of their knowledge, this condensed interim report has been prepared in accordance with IAS 34 as adopted by the Eur opean Union. The interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
On behalf of the board
Stephen West Executive Chairman 29 October 2021
Enquiries
Roquefort Investments plc Stephen West (Chairman) +44 (0)20 3290 9339
Optiva Securities Limited (Broker) Christian Dennis +44 (0)20 3411 1881
For further information, please visit www.roquefortinvest.com and @roquefortinvest on Twitter.
| Unaudited | Unaudited | ||
|---|---|---|---|
| 6 Month | 17 Aug | ||
| Period ended 30 June 2021 |
to 31 Dec 2020 |
||
| £ | £ | ||
| Notes | |||
| Administrative expenses | (301,232) | (7,624) | |
| Operating loss | 6 | (301,232) | (7,624) |
| Finance income/(expense) | - | - | |
| Loss before taxation | (301,232) | (7,624) | |
| Income tax | 7 | - | - |
| Loss for the period from continuing operations |
(301,232) | (7,624) | |
| Total loss for the year attributable to equity holders of the Company |
(301,232) | (7,624) | |
| Other comprehensive loss | - | - | |
| Total comprehensive loss attributable to equity holders of the Company |
(301,232) | (7,624) | |
| Basic and diluted earnings per ordinary share (pence) |
8 | (1.79) | (0.08) |
The notes form an integral part of the Unaudited Condensed Interim Financial Statements
| Unaudited Period ended 30 June 2021 £ |
Unaudited Period ended 31 Dec 2020 £ |
||
|---|---|---|---|
| ASSETS | Notes | ||
| CURRENT ASSETS | |||
| Cash and cash equivalents | 880,445 | 114,933 | |
| Trade and other receivables | 9 | 13,241 | 1,443 |
| TOTAL ASSETS | 893,686 | 116,376 | |
| LIABILITIES | |||
| CURRENT LIABILITIES | |||
| Trade and other payables | 10 | 14,331 | - |
| TOTAL LIABILITIES | 14,331 | - | |
| NET ASSETS | 879,355 | 116,376 | |
| EQUITY | |||
| Share Capital | 11 | 313,000 | 124,000 |
| Share Premium | 11 | 800,000 | - |
| Share Based Payment Reserves | 12 | 74,911 | - |
| Retained Earnings | (308,856) | (7,624) | |
| TOTAL EQUITY | 879,355 | 116,376 |
The notes form an integral part of the Unaudited Condensed Interim Financial Statements
| Unaudited 6 Month Period ended 30 June 2021 |
Unaudited 17 Aug to 31 Dec 2020 |
|
|---|---|---|
| Cash flow from operating activities | £ | £ |
| Loss before income tax | (301,232) | (7,624) |
| Adjustments for: | ||
| Share based payment | 74,911 | - |
| Changes in working capital: | ||
| Increase in receivables | (11,798) | (1,443) |
| Increase in payables | 14,331 | - |
| Net cash used in operating activities | (232,788) | (9,067) |
| Cashflows from financing activities | ||
| Proceeds from issue of ordinary shares | 1,015,000 | 124,000 |
| Share issue costs | (25,700) | - |
| Net cash used in financing activities | 989,300 | 124,000 |
| Net increase in cash and cash equivalents | ||
| Net increase in cash held | 765,511 | 114,933 |
| Cash and cash equivalents at beginning of financial year | 114,933 | - |
| Cash and cash equivalents at end of financial year | 880,445 | 114,933 |
| Share | |||||
|---|---|---|---|---|---|
| Ordinary Share |
Share | Based Payment |
Retained | Total | |
| capital | Premium | Reserves | earnings | equity | |
| £ | £ | £ | £ | £ | |
| On Incorporation | |||||
| Loss for the period | - | - | - | (7,624) | (7,624) |
| Total comprehensive loss for the period | - | - | - | (7,624) | (7,624) |
| Transactions with owners | |||||
| Ordinary Shares issued on incorporation (17 | |||||
| August 2020) | 50,000 | - | - | - | 50,000 |
| Issue of ordinary shares (20 November 2020) | 74,000 | - | - | - | 74,000 |
| Total transactions with owners | 124,000 | - | - | (7,624) | 116,376 |
| Balance as at 31 December 2020 | 124,000 | - | - | (7,624) | 116,376 |
| At 1 Jan 2021 | |||||
| Loss for the Period | - | - | - | (301,232) | (301,232) |
| Total comprehensive loss for the period | - | - | - | (301,232) | (301,232) |
| Transactions with owners | |||||
| Ordinary shares issued (22 March 2021) | 200,000 | 800,000 | - | - | 1,000,000 |
| Director warrants issued (22 March 2021) | - | - | 6,833 | - | 6,833 |
| Broker seed warrants issued (22 March 2021) | - | - | 60,002 | - | 60,002 |
| Broker placing warrants issued (22 March 2021) |
- | - | 8,076 | - | 8,076 |
| Broker warrants exercised (19th April 2021) | 15,000 | - | - | - | 15,000 |
| Share issue costs | - | (25,700) | - | - | (25,700) |
| Total transactions with owners | 215,000 | 774,300 | 74,911 | (301,232) | 762,979 |
| As at 30 June 2021 | 339,000 | 774,300 | 74,911 | (308,856) | 879,355 |
The Company was incorporated on 17 August 2020 as a public company in England and Wales with company number 12819145 under the Companies Act.
The address of its registered office is Eccleston Yards, 25 Eccleston Place, London SW1W 9NF, United Kingdom.
The principal activity of the Company is to pursue opportunities to acquire biotechnology businesses that are focused on early stage opportunities in the medical biotechnology sector to include (but not limited to):
The Company listed on the London Stock Exchange ("LSE") on 22 March 2021.
IAS 8 requires that management shall use its judgement in developing and applying accounting policies that result in information which is relevant to the economic decision-making needs of users, that are reliable, free from bias, prudent, complete and represent faithfully the financial position, financial performance and cash flows of the entity.
The Condensed Interim Financial Statements have been prepared in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006 and the Companies Act 2006 applicable to companies reporting under IFRS. The Condensed Interim Financial Statements have been prepared in accordance with IAS 34 "Interim Financial Statements." The Condensed Interim Financial Statements do not include all disclosures that would otherwise be required in a complete set of financial statements but have been prepared in accordance with the existing accounting policies of the Company.
The Interim Financial Statements for the period ended 30 June 2021 are unaudited.
The Interim Financial Statements have been prepared using the measurement bases specified by IFRS for each type of asset, liability, income and expense.
The Interim Financial Statements do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.
The Interim Financial Statements are presented in £ unless otherwise stated, which is the Company's functional and presentational currency.
Comparative figures represent the period from incorporation to 31 December 2021, and so are not directly comparable.
The Directors have made an assessment of the Company's ability to continue as a going concern and are satisfied that the company has the adequate resources to continue in operational existence for the foreseeable future. The Company, therefore, continues to adopt the going concern basis in preparing its interim financial statements.
The same accounting policies, presentation and methods of computation have been followed in these Condensed Interim Financial Statements as were applied in the preparation of the Company's historic financial information for the year period ended 31 December 2020, as included in the Prospectus dated 27 April 2021, except for the impact of the adoption of the Standards and interpretations described below and new accounting policies adopted as a result of changes in the Company.
There were no new standards or interpretations adopted by the Company in the period.
Standards, amendments and interpretations that are not yet effective and have not been early adopted are as follows:
| Standard | Impact on initial application | Effective date |
|---|---|---|
| IFRS 3 | Reference to Conceptual Framework | 1 January 2022 |
| IAS 37 | Onerous contracts | 1 January 2022 |
| IAS 16 | Proceeds before intended use | 1 January 2022 |
| Annual improvements | 2018-2020 Cycle | 1 January 2022 |
| IFRS 17 | Insurance contracts | 1 January 2023 |
| IAS 8 | Accounting estimates | 1 January 2023 |
| IAS 1 | Classification of Liabilities as Current or Non-Current. 1 January 2023 |
In preparing the Condensed Interim Financial Statements, the Directors have to make judgments on how to apply the Company's accounting policies and make estimates about the future. Estimates and judgements are continuously evaluated based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may deviate from these estimates and assumptions.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below.
There were no employees of the Company in the period under review, other than the four directors.
Directors remuneration for the period was as follows:
| Cash based remuneration 30 June 2021 £ |
Share based remuneration 30 June 2021 £ |
Total remuneration 30 June 2021 £ |
|
|---|---|---|---|
| Stephen West | 6,644 | - | 6,644 |
| Glenn Whiddon | 3,323 | - | 3,323 |
| Mark Rollins | 3,323 | - | 3,323 |
| Michael Stein | 3,323 | 24,941 | 28,264 |
| 16,613 | 24,941 | 41,554 |
Operating loss from continued operations:
| 30 June 2021 |
31 Dec 2020 |
|
|---|---|---|
| £ | £ | |
| Costs associated with the IPO | (182,053) | - |
| Director fees | (16,613) | - |
| Consulting and professional fees | (76,874) | (6,500) |
| Other expenditure | (25,692) | (1,124) |
| (301,232) | (7,264) |
| 30 June | 31 Dec | |
|---|---|---|
| 2021 | 2020 | |
| £ | £ | |
| Current tax | - | - |
| Deferred tax | - | - |
| Income tax expense | - | - |
Income tax can be reconciled to the loss in the statement of comprehensive income as follows:
| Period ended 30 Jun 2021 £ |
Period ended 31 Dec 2020 £ |
|
|---|---|---|
| Loss before taxation | (301,232) | (7,264) |
| Tax at the UK corporation tax rate of 19% | (57,234) | (1,449) |
| Tax losses on which no deferred tax asset has been recognised | 57,234 | 1,449 |
| - | - |
| Period Ended 30 Jun 2021 |
Period Ended 31 Dec 2020 |
|
|---|---|---|
| (unaudited) | (unaudited) | |
| Loss for the year from continuing operations – £ | (301,232) | (7,264) |
| Weighted number of ordinary shares in issue | 16,832,177 | 9,160,369 |
| Basic earnings per share from continuing operations – | ||
| pence | (1.79) | (0.08) |
| 30 June 2021 | 31 Dec 2020 | |
|---|---|---|
| £ | £ | |
| Prepayments | 6,607 | - |
| VAT receivable | 6,634 | 1,433 |
| 13,241 | 1,433 |
| 30 June 2021 £ |
31 Dec 2020 £ |
|
|---|---|---|
| Trade creditors | 5,259 | - |
| Accruals | 3,323 | - |
| Other payables | 5,750 | - |
| 14,331 | - |
| Ordinary Shares |
Share Capital |
Share Premium |
Total | |
|---|---|---|---|---|
| # | £ | £ | £ | |
| Issue of ordinary shares on incorporation1 | 5,000,000 | 50,000 | - | 50,000 |
| Issue of ordinary shares 2 | 7,400,000 | 74,000 | - | 74,000 |
| Issue of ordinary shares 3 | 20,000,000 | 200,000 | 800,000 | 1,000,000 |
| Exercise of broker warrants 4 | 1,500,000 | 15,000 | - | 15,000 |
| Share issue costs | - | - | (25,700) | (25,700) |
| At 30 June 2021 | 33,900,000 | 339,000 | 774,300 | 1,113,300 |
1On incorporation on 17 August 2020, the Company issued 5,000,000 ordinary shares of £0.01 at their nominal value of £0.01.
2On 20 November 2020, the Company issued 7,400,000 ordinary shares at their nominal value of £0.01.
3On admission to the Standard List of the LSE on 22 March 2021, 20,000,000 shares were issued at a placing price of £0.05.
4On 19 April 2021 1,500,000 brokers warrants were exercised at the exercise price if £0.01 resulting in the issue of 1,500,000 ordinary shares.
| Total | Total | |
|---|---|---|
| £ | £ | |
| Directors Warrants Issued 1 | 6,833 | - |
| Broker seed warrants Issued 2 | 60,002 | - |
| Broker placing warrants Issued 3 | 8,076 | - |
| At 30 June 2021 | 74,911 | - |
1On admission to LSE on 22 March 2021 750,000 directors' warrants were issued that entitle the warrant holder to subscribe for one Ordinary Share at £0.05 per ordinary share and a further 750,000 directors warrants were issued that entitle the warrant holder to subscribe for one ordinary share at £0.10 per ordinary share.
2On admission to LSE on 22 March 2021 1,500,000 brokers warrants were issued that entitle the warrant holder to subscribe for one Ordinary Share at £0.01 per ordinary share.
3On admission to LSE on 22 March 2021, 480,000 Broker Placing Warrants were issued that entitle the warrant holder to subscribe for one ordinary share at the placing price of £0.05 per ordinary share.
The fair value of the services received in return for the share options granted are measured by reference to the fair value of the share options granted. The estimate of the fair value of the share options granted is measured based on the Black-Scholes valuations model. Measurement inputs and assumptions are as follows:
| Director | Director | Broker | ||
|---|---|---|---|---|
| Warrants - | Warrants - | Broker Seed | Placing | |
| £0.05 | £0.10 | Warrants | Warrants | |
| Weighted average share price | £0.05 | £0.05 | £0.05 | £0.05 |
| Exercise price | £0.05 | £0.10 | £0.01 | £0.50 |
| Weighted average contractual life (years) | 5.00 | 5.00 | 0.08 | 3.00 |
| Expected volatility | 50% | 50% | 50% | 50% |
| Expected dividend growth rate | Nil | Nil | Nil | Nil |
| Risk-free interest rate | 0.15% | 0.15% | 0.15% | 0.15% |
| Number of Warrants | Exercise Price | Expiry date | |
|---|---|---|---|
| On incorporation | - | - | - |
| Issued on 25 November 2020 1 | 5,000,000 | £0.10 | 21 March 2026 |
| Issued on 25 November 2020 1 | 7,000,000 | £0.10 | 21 March 2026 |
| Issued on 17 March 2021 | 1,500,000 | £0.01 | 20 April 2021 |
| Issued on 17 March 2021 | 480,000 | £0.05 | 21 March 2024 |
| Issued on 17 March 2021 1 | 750,000 | £0.05 | 21 March 2026 |
| Issued on 17 March 2021 1 | 750,000 | £0.10 | 21 March 2026 |
| Issued on 17 March 2021 | 10,000,000 | £0.10 | 21 March 2023 |
| Exercised on 19 April 2021 | (1,500,000) | £0.01 | 20 April 2021 |
| At 30 June 2021 | 23,980,000 | £0.097 |
1The warrants vest on 21 March 2022, being 12 months from date of admission.
The weighted average time to expiry of the warrants as at 30 June 2021 is 3.43 years.
On incorporation, the Company issued 2,500,000 Ordinary Shares of £0.01 at £0.01 per Ordinary Share for cash consideration of £25,000 to Stephen West, a Director and 2,500,000 Ordinary Shares of £0.01 at £0.01 per Ordinary Share for cash consideration of £25,000 to Glenn Whiddon, a Director.
On 20 November 2020, the Company issued 500,000 Ordinary Shares of £0.01 at £0.01 per Ordinary Share for cash consideration of £5,000 to Cresthaven Investments Pty Ltd ATF The Bellini Trust (an entity associated with Stephen West, a Director), 3,500,000 Ordinary Shares of £0.01 at £0.01 per Ordinary Share for cash consideration of £35,000 to 6466 Investments Pty Ltd (an entity associated with Glenn Whiddon, a Director) and 3,000,000 Ordinary Shares of £0.01 at £0.01 per Ordinary Share for cash consideration of £30,000 to Mark Rollins, a Director.
All of these shares are paid up.
On 18 August 2021, the Company raised £150,000 before expenses through the issue of 3,000,000 new ordinary shares to certain strategic investors at a price of £0.05 per ordinary share. As part of the placing, the Company also issued 1,500,000 warrants to subscribe for new ordinary shares at a price of £0.10 per share, expiring on 22 March 2023.
On 29 September 2021, the Company entered into a non-binding term sheet with Provelmare Holding S.A. ("Provelmare") pursuant to which the Company will acquire 100% of the total issued equity in Lyramid Limited ("Lyramid") for an initial consideration of £1 million payable 50% in cash and 50% in shares.
Other than the above, there has been no significant change in either the financial performance or the financial position of the Company since 30 June 2021.
As at 30 June 2021, there was no ultimate controlling party of the Company.
The Company Financial Information presented above does not constitute statutory accounts for the period under review.
The Condensed Interim Financial Statements were approved by the Board of Directors on 29 October 2021.
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