Registered number: 13138531
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023
GENFLOW BIOSCIENCES PLC
CONTENTS
Page
Company Information 2
Chairperson’s Report 3
Strategic Report 5
Operating Risks and Uncertainties 10
Directors’ Report 12
Statement of Directors’ Responsibilities 16
Corporate Governance Report 17
Audit Committee Report 23
Remuneration and Nomination Committee Report 24
Independent Auditor’s Report to the Members of Genflow Biosciences plc 27
Consolidated and Company Statement of Financial Position 32
Consolidated Statement of Comprehensive Income 33
Consolidated Statement of Changes in Shareholders’ Equity 34
Company Statement of Changes in Shareholders’ Equity 35
Consolidated and Company Statement of Cash flows 36
Notes to the Financial Statements 37
GENFLOW BIOSCIENCES PLC
COMPANY INFORMATION
2
Directors Tamara Joseph (Non-Executive Chairperson)
Eric Leire (Executive Director)
Peter King-Lewis (Non-Executive Director)
Guy-Charles Fanneau De La Horie (Non-Executive Director)
Yassine Bendiabdallah (Non-Executive Director)
Company Secretary Westend Corporate LLP
Registered Office 6 Heddon Street
London
W1B 4BT
Company Number 13138531
Bankers Wise Business
56 Shoreditch High Street
London
E1 6JJ
United Kingdom
ING Belgium N.V.
Avenue Marnixlaan
24 B-1000 Brussels
Belgium
Joint Brokers Clear Capital Markets Ltd
Broadgate Tower
12
th
Floor, Office 1213
20 Primrose Street
London
EC2A 2EW
Capital Plus Partners Limited
4
th
Floor
49 St James Street
London
SW1A 1JT
Statutory Auditors PKF Littlejohn LLP
15 Westferry Circus
Canary Wharf
London
E14 4HD
Solicitors Hill Dickinson LLP
The Broadgate Tower
20 Primrose Street
London
EC2A 2EW
GENFLOW BIOSCIENCES PLC
CHAIRPERSON’S STATEMENT
3
Dear Shareholders,
Introduction
I am pleased to present my statement as the Chairperson of Genflow Biosciences Plc (GENF) (the “Company”).
The Company is a preclinical biotechnology company focused on the development of innovative biological interventions
(namely gene therapies) which are aimed at tackling the effects of aging, potentially slowing or halting the aging process and
so reducing the incidence of age-related diseases and thereby increasing life span.
Over the past year, the Company has achieved numerous important milestones and I would like to sincerely thank our team
for its exceptional commitment to execution and delivery.
As mentioned in greater detail in the Strategic report on page 5, the Company’s subsidiary Genflow Biosciences SRL (together
the “Group”) is making great progress with its two principal longevity programs: NASH; now called MASH (Metabolic
Dysfunction-Associated Steatohepatitis), as well as its work on Werner Syndrome. Most notably in relation to our MASH
program, the Company had its first interaction with the Federal Agency for Medicines and Health Products (FAHMP) which
was successful. FAHMP concurred with Genflow’s proposal to commence Phase I/II clinical trials in MASH patients rather
than with healthy volunteers once we reach the clinical trial phase. We hope that this will provide a first signal of efficacy in
humans more speedily and, furthermore, we are hopeful that these trials will showcase the ability of longevity gene-therapy
in assisting patients with life-limiting illnesses.
In the same month, we were also able to report that that the Company’s shares had successfully commenced trading on the
OTCQB Venture Market in the United States. We continue to believe this move expands our reach to a larger investor base
and has the potential to enhance liquidity for our shares, making it easier for US investors to trade Company shares. Our
acceptance onto the OTCQB also aligned (and continues to do so) with our strategic emphasis on the US due to its significant
advancements and understanding in longevity and our ongoing collaborations with US-based institutions.
Another notable achievement this year, was the expansion our intellectual property portfolio through a provisional patent
application focusing on the ability to edit the SIRT6 gene, shown to play a key role in longevity and age-related diseases. If
granted the patent will represent a significant milestone in the field of gene editing, with potential implications for longevity
and other forms of gene therapy.
2024
In January 2024, we announced two exciting collaborations with other biotech companies: a sarcopenia project with Revatis
SA and an exosome-mRNA project with EXO Biologics. Both projects are backed by substantial non-diluting and non-
reimbursable research grants by the Government of Wallonia in Belgium totalling a combined €2.89m. The first payment of
€777,000 is due to be received imminently. The opportunity to collaborate with Revatis SA and EXO Biologics; plus the
granting of funding, will allow us to strengthen our cash runway, enabling us to continue executing on our research and
conduct additional development programs such as our sarcopenia program and therefore broaden our research pipeline and
expand the size of the Company’s therapeutic markets.
To strengthen the Company's financial position and increase our institutional investor base, the Company completed a placing
and subscription to raise £715,000 (before expenses) recently. We were privileged to have the participation of Premier Miton,
a well-known UK institution, in this fundraise.
In addition to this, Genflow Biosciences SRL also received €350,000 in April 2024 from the Wallonia Region representing the
second half of the first tranche of the grant.
We have ambitious goals for our MASH and Werner research programs in 2024, including key Investigational New Drug
(“IND”)-enabling development activities that will help define the pharmacological and toxicological properties of our lead drug
candidate, GF-1002, and its potential benefits for MASH patients. Additionally, we plan to start preliminary discussions with
the European Medicines Agency (EMA) on Mechanism of Action (MoA) data for the Orphan Drug Application (ODA) for our
second compound GF-3001, targeting Werner Syndrome. We also plan to initiate discussion with the FDA regarding our
MASH program.
Governance and the Board
Genflow was pleased to further strengthen its exceptional Scientific Advisory Board (SAB) with the appointment of Prof. Sven
Francque (University of Antwerp) and Prof. Dr Mary E. Rinella (University of Chicago) in May 2023.
Prof. Dr. Francque is currently Chairman of the Department of Gastroenterology and Hepatology of the University Hospital
Antwerp and Full Professor of Medicine at the Faculty of Medicine and Health Sciences of the University of Antwerp in
Belgium. He has a longstanding interest and expertise in non-alcoholic fatty liver disease and has conducted research
focusing on steatosis.
GENFLOW BIOSCIENCES PLC
CHAIRPERSON’S STATEMENT
4
Prof. Dr. Mary E. Rinella, is the Director of the Metabolic and Fatty Liver Disease Department at the University of Chicago.
She has investigated a broad range of topics within fatty liver disease, including the use of non-invasive measures to minimize
the use of liver biopsy and the study of new therapies to treat fatty liver disease.
In light of the ongoing progress being achieved by the Company, including its OTCQB listing and evolving focus on the US,
leadership of the board and SAB were transitioned to individuals who are based in the US and have strong ties with the US
markets and academic research institutions: I was appointed Chairperson of the Board and Vera Gorbunova PhD became
Chairperson of the SAB. Dr. Gorbunova's contributions to the field of longevity and her invaluable insights in this sector will
be instrumental in guiding the Company's scientific research.
These appointments to the SAB and leadership transitions are aimed at strengthening Genflow’s links with the U.S. market,
its investors and its research institutions, while continuing our commitment to the UK market, its investors and UK and
European research institutions.
Yassine Bendiabdallah, former Chair, remains a key member of our Board and continues to act as a Non-Executive Director,
and Dr Eric Verdin remains a key member of the SAB.
Forward look
I would like to extend my gratitude to the members of the Genflow board and wider team for their indispensable contributions
to the Company. Their diligent efforts have played a pivotal role in realising the achievements outlined in my report. The
Company eagerly anticipates collaborating on forthcoming projects with partners such as Revatis SA and EXO Biologics as
we continue to maintain a robust financial position, ensuring our readiness to pursue our objectives for the fiscal year 2024. I
look forward to providing further updates as developments materialise.
Tamara Joseph
Non-Executive Chairperson
GENFLOW BIOSCIENCES PLC
STRATEGIC REPORT
5
Introduction
We are a pre-clinical biotechnology company committed to using gene therapy technologies to develop drugs that potentially
halt, slow or reverse the aging process. Our products will aim at improving the health span (living healthier for longer) and
potentially, life expectancy. Our objective is to develop gene therapies that address the growing medical need to prevent and
delay age-related diseases by using adeno-associated viruses (“AAV”) vectors
1
to deliver copies of a SIRT6 gene variant
found in Centenarians.
Research and Development Update
The Company’s focus is the creation of innovative interventions in gene therapies that provide hope for halting, slowing or
even reversing the aging process. The Group seeks to streamline and accelerate pre-clinical, regulatory, clinical, and
production pathways.
Genflow continues with the research, development and safe implementation of its two longevity programs:
1. Metabolic Dysfunction-Associated Steatohepatitis (formerly known as Non-Alcoholic Steatohepatitis (“NASH”))
(“MASH”) where the Company is seeking to reverse aging fibrotic livers to normal functionality. MASH affects an
estimated 35 million people globally and is one of the leading causes of chronic liver disease and liver transplants;
and
2. Werner Syndrome where the Company is seeking to improve the life of patients with this accelerated aging disease.
The Company is seeking to ensure swift first-in-human trials.
We are pleased to report that our MASH program is advancing, underscoring our firm commitment to combatting this global
health issue. In collaboration with Dr. Manlio Vinciguerra, (a Genflow SAB member based at the University of Liverpool), we
are gaining a significantly deeper understanding of the biochemical changes that occur in the treatment of MASH using the
centenarian SIRT6. This research has led to us clearly identifying the workings of our lead drug candidate, GF-1002 and its
potential benefits for MASH patients.
Our studies demonstrate the absorption and distribution of the Company’s drug candidates in the human body. The data from
these studies, which is owned by the Company, formed a significant part of the presentation to the regulatory authorities in
June 2023 which resulted in a favorable response from the Federal Agency for Medicines and Health Products (FAHMP).
We were most pleased to receive written comments from the FAHMP of Belgium which recommended that the Company
commence clinical trials of its drug, GF-1002, with patients suffering from MASH, rather than in healthy volunteers. This
follows promising results from the Company's research in in-vitro human cells and in-vivo rodent studies. MASH clinical trials
are expected to begin in Q2 2025 following dialogue and subsequent agreement with the European Medicine Agency.
As a result of our findings thus far, we have accumulated important data and filed a new patent application for editing the
SIRT6 gene, linked to longevity and age-related diseases. If successful, this research could have significant positive
implications for the field of gene therapy and beyond. Based on this work, further IP opportunities are also being continually
explored.
Additionally, part of these results have been published in a peer controlled journal (reference: Human centenarian-associated
SIRT6 mutants modulate hepatocyte metabolism and collagen deposition in multilineage hepatic 3D spheroids - PubMed
(nih.gov)) with the Company’s CEO and members of its SAB listed as co-authors.
Simultaneously, we are making progress on gene therapy targeting Werner Syndrome, an accelerated aging disease. Here,
our vision is clear: to enhance the quality of life for affected patients and expedite the path towards swift and successful first-
in-human trials under orphan drug designation. Our lead compound GF-3001, is a topical delivery of SIRT6 to the fibroblasts
in the skin. The Company has already conducted a preliminary feasibility study for a clinical site in Northern Sardinia, Italy.
Note that all costs in relation to the Group’s research and development activity have been recognized as an expense in the
Consolidated Statement of Comprehensive Income due to the Group being in the research phase of its journey.
Strategic Development - Collaborative Research Agreements
Since incorporation, the Company has entered into several scientific collaborations with top-tier longevity research institutions
and, in early-2024, was pleased to announce it had entered into new collaborative research agreements with two prestigious
organisations in the biotechnology space.
The two new research programs are a part of a broader innovation partnership that the Walloon Government, dedicated to
Advanced Therapy Medicinal Products (ATMPs).
GENFLOW BIOSCIENCES PLC
STRATEGIC REPORT
6
Sarcopenia Research Program with Revatis SA
Genflow, together with Revatis SA, launched a 3-year sarcopenia research program, generously funded by a grant totalling
€1.34m. Sarcopenia, the progressive loss of muscle mass and function associated with aging, poses a significant health risk
and affects the quality of life for millions of elderly people worldwide.
mRNA Delivery Research with EXO Biologics
Genflow and EXO Biologics initiated a 3-year scientific program, supported by a grant of €1.55m. The project focuses on the
development of a novel mRNA delivery system using exosomes to encapsulate and transport Genflow's proprietary
centenarian SIRT6 gene. The Company plan to use these loaded exosomes for topical delivery to patients with Werner
Syndrome.
Outlook for 2024
Our key objectives for 2024 are:
• Continuing to identify suitable grant funding to support the Group’s project pipeline.
• Undertake key Investigational New Drug (IND)-enabling development activities that will help define the
pharmacological and toxicological properties of our lead drug candidate, GF-1002, and its potential benefits for
MASH patients.
• Select site and QMS framework for clinical readiness, expected by the end of 2025 for the MASH program.
• Commence preliminary discussions with the European Medicines Agency (EMA) on Mechanism of Action (MoA)
data for Orphan Drug Application (ODA) for our second compound GF-3001, targeting Werner Syndrome.
• Select Contract Development and Manufacturing Organization (CDMO) for advancing the GMP manufacturing of
the MASH clinical lot of lead drug candidate, GF-1002.
• Develop and implement project management, budgeting and governance for collaborative partners, in line with
clinical and pre-clinal activities that will enable IND applications.
• Move key patent applications under the Patent Cooperation Treaty (PCT) to the national phase, while further
expanding our development pipeline with new products and new indications.
Intellectual Property
Genflow BE holds an exclusive worldwide patent license along with the University of Rochester concerning the GF-1002
compound and its administration to treat humans and pets. The GF-1002 patent application principally relates to the cDNA of
the variant of the human sirtuin 6 gene found in Centenarians. This represents the broadest possible scope for a “gene patent
application” since it encompasses any use of the variant, including specifically, the Group’s product GF-1002, but also any
product that contains the variant for use in any application. Genflow's collaborative partners include: the University of
Rochester, The Trustees of Columbia University in the City of New York, and Albert Einstein College of Medicine, New York.
Genflow BE also holds a provisional patent application focussing on the ability to edit the SIRT6 gene. This gene has been
shown to play a role in longevity and age-related diseases. If granted, the patent will represent a significant breakthrough in
the field of gene editing, with potential implications for longevity and other forms of gene therapy.
Late in 2022, the Company filed a new patent application with the United States Patent and Trademark Office that relates to
methods of administration of variants of SIRT6, and the gene variant's therapeutic uses for the treatment of two disorders
involving the liver: Non-alcoholic fatty liver disease NAFLD, and MASH. The application was filed via Genflow Biosciences
SRL (“Genflow BE”).
Investment To Date
The Company has an agreement with the Wallonia region in Southern Belgium to receive a non-dilutive research grant award
of up to €3.375m. To date, the Company has accessed funding under tranche one of the grant which totals €767,000, of
which partial payment was received in the previous reporting period, and the balance received in April 2024. The Company
expects to apply for the second tranche of funding in 2024.
Additionally, the Company’s research with Revatis SA and EXO Biologics is backed by substantial non-diluting and non-
reimbursable research grants by the Government of Wallonia in Belgium, of which a combined total of €1.55m is receivable.
Funding for the two research programs, as part of the Wallonia Recovery Plan by the Walloon Government in Belgium, will
be disbursed annually to the Company, contingent upon Genflow and its collaborators achieving specific, activity-based
milestones.
The Scientific Advisory Board (SAB)
GENFLOW BIOSCIENCES PLC
STRATEGIC REPORT
7
Genflow has established what the Directors believe is a strong scientific advisory board (“SAB”) experienced in the field of
longevity. The role of the SAB is to provide the Company with specific guidance on its research & development programmes.
Furthermore, the Company can benefit from constant external perspectives which the members of the SAB can bring to steer
its research & development strategies. Details of the SAB members are as follows:
Dr Vera Gorbunova
Dr Vera Gorbunova, PhD is the Co-Director of the Rochester Ageing Research Center, University of Rochester New York. Dr
Gorbunova is an endowed Professor of Biology at the University and a Co-Director of the Rochester Ageing Research Center.
Her research is focused on understanding the mechanisms of longevity and genome stability and on the studies of
exceptionally long-lived mammals. Her work has received awards from the Ellison Medical Foundation, the Glenn Foundation,
American Federation for Ageing Research, and from the National Institutes of Health. Her work was awarded the Cozzarelli
Prize from PNAS, the prize for research on ageing from ADPS/Alianz, (France), the Prince Hitachi Prize in Comparative
Oncology, (Japan), and the Davey prize from Wilmot Cancer Center.
Dr Eric Verdin
Dr Eric Verdin, M.D. has been Chief Executive Officer and President of Buck Institute For Age Research since 18 November
2016. Dr Verdin served as an Associate Director and Senior Investigator at the Gladstone Institute of Virology and Immunology
and a Professor of Medicine at the University of California. Dr Verdin's laboratory work focuses on the role of protein
acetylation in biological processes, particularly in modulating the immune response. Specifically, his laboratory studies histone
deacetylase enzymes (HDACs) that remove acetyl groups from histones and non-histone proteins.
Dr Matthew Hirschey
Dr Matthew Hirschey, PhD is an Assistant Professor in the Departments of Medicine (Division of Endocrinology, Metabolism
and Nutrition) and Pharmacology & Cancer Biology at Duke University Medical Center and a faculty member of the Sarah W.
Stedman Nutrition and Metabolism Center and the newly formed Duke Molecular Physiology Institute. His research focuses
on mitochondrial metabolism, with a particular interest in how cells use metabolites and chemical modifications to sense
metabolism. He, and his lab, study the regulation of this process by a family of enzymes called sirtuins, and how sirtuins
maintain energy homeostasis. His work has appeared in several leading journals, including Nature, Science, Cell Metabolism
and Molecular Cell. He has received several awards including an Innovator Award from the American Heart Association, a
New Scholar in Ageing Award from the Ellison Medical Foundation, and the Helmholtz Young Investigator in Diabetes (HeIDi)
Award. His work is supported by grants from the American Heart Association, the Mallinckrodt Foundation, Friedreich's Ataxia
Research Alliance, the Ellison Medical Foundation, and the National Institutes of Health.
Dr Manlio Vinciguerra
Dr Manlio Vinciguerra, PhD is a Principal Investigator at the International Clinical Research Center (ICRC), Brno, Czech
Republic. Previously he held a position of Senior Lecturer at the Institute for Liver and Digestive Health at University College
London (UCL), London, United Kingdom. He received his PhD in Internal Medicine (2004) and research training at the
University of Geneva, Switzerland, and at the European Molecular Biology Laboratory (EMBL), in Italy and in Germany (2005-
2011). He obtained a degree in Biomolecular Sciences from the University of Catania, Italy, in 1999. Dr. Vinciguerra unravelled
important cellular signalling and epigenetics mechanisms involved in metabolic and infectious processes, stress and ageing
in the heart and in the liver, such as PI3K/AKT/mTOR pathway and sirtuins, using a systems biology approach in cells and
rodent models. He is a member of Who's Who in Gerontology.
Professor Dr. Sven Francque
Professor Francque is a renowned expert in the field of NAFLD and its advanced form, nonalcoholic steatohepatitis now
known as Metabolism-Associated Steatohepatitis (MASH). He has a long-standing interest and expertise in NAFLD and
MASH, with research focusing on the vascular changes in steatosis and their contribution to disease progression. Genflow
stands to gain significant value from Professor Francque’s extensive knowledge of MASH, particularly in identifying new
targets and potential therapies for the disease. Moreover, Professor Francque’s expertise in clinical research and clinical trial
design will be invaluable in the development of clinical trial programs for the Company’s novel therapeutics. His membership
of the SAB will play a vital role in shaping and broadening the Company’s strategy and direction, and his vast experience will
be integral to achieving the Company’s goal of improving the lives of patients with MASH.
Dr. Mary E. Rinella, MD
Mary Rinella, MD, is a board-certified transplant hepatolgist at University of Chicago Medicine. Dr. Rinella is an expert in fatty
liver disease (steatotic liver disease). She has become an expert in the various types of fatty liver diseases during her 20-
year tenure, while also learning extensively about autoimmune and biliary liver diseases. Dr. Rinella has significant experience
treating these illnesses, utilizing remedies such as nutritional intervention, the use of medications, endoscopy and clinical
trials to deliver the most advanced treatment options. Dr. Rinella earned her medical degree at the University of Illinois School
of Medicine before completing her residency and fellowship at the University of Chicago and Northwestern University,
respectively. Her studies on the matters have led to over 150 articles published in prestigious journals such as Nature Reviews
Gastroenterology & Hepatology, Gastroenterology, Hepatology, Journal of the American Medical Association (JAMA), The
Lancet and more.
In order to align the objectives of the SAB members with that of the Group, a portion of the SAB member’s remuneration is in
the form of Ordinary Shares in the Company.
GENFLOW BIOSCIENCES PLC
STRATEGIC REPORT
8
Organisational Progress
Since incorporation, the Company has made significant progress in its commitment to best practice in Corporate Governance.
The Company is proud to uphold a good standard of corporate governance by putting in place:
• An effective board of directors that is collectively responsible for ensuring success in the long term, led by a
chairperson who is committed to continuous improvement
• A board that features a balance of competencies, experience, diversity, company knowledge and independence
• Directors that are able to dedicate sufficient time to their responsibilities, receive a great induction and have the
opportunity to regularly update their skillset
• Regular evaluation of the board performance as well as that of the individual directors and committees.
The Company’s Corporate Governance policy has been further detailed in the Corporate Governance Report on page 17.
Being a great place to work
Underlying our strategy is our dedication to ensuring we are able to attract and retain great talent by being, and remaining a
great place to work. As our business grows, we believe our success will require ideas that can only come from people
encouraged to be themselves at work, enabled to contribute to their full potential, and empowered to challenge conventional
thinking. For us that means being an inclusive and diverse workplace, attracting and retaining the best people. Genflow’s
current staff based is made up of Directors and contractors, however we plan to take on more employees as we grow, and
we are committed to implementing the aforementioned strategy from the start of our journey.
Diversity Statement
The Company’s culture allows and encourages every person to make a unique and positive contribution to the organisation
irrespective of their differences. The Company encourages contributions from all groups and actively seeks to maintain a
diverse board of Directors, which will in turn be reflected in its workforce when the Company begins to recruit.
Roles by gender
2023 2022
Female Male Female Male
Non-executive Directo
r
1 3 2 4
Executive Director - 1 - 1
In 2023, 20% of the board was made up of women. As the Company grows and develops it is eager to increase its gender
diversity by appointing more women to its Board, adding new perspectives and contributions. However, at present, the Board
and Company remains fairly small and only meets one out of two gender diversity targets set by the Listing Rules.
Roles by ethnicity
One fifth of the Company’s board is formed of individuals from ethic minority backgrounds, as defined by the Listing Rules.
Financial Overview
As at 31 December 2023, the Group had cash reserves of £683,974 (2022: £2,356,225) and is debt free.
Group administration expenses for the 2023 year totaled £1,798,559 (2022: £1,822,232) which consisted of professional,
legal and consulting fees of £215,971 (2022: £381,534) and PR and marketing costs of £106,819 (2022: £165,889).
Expenditure on research and development was £960,314 for the year (2022: £724,465), all of which has been recognised as
an expense due to the Group being in the research phase.
During the year ended 31 December 2023, the Company recognized grant income of £169,854 (2022: £487,293) relating to
tranche one of non-dilutive research grant award from the regional government of Wallonia in southern Belgium SPW
(“Wallonia Grant”). The ongoing agreement with the Walloon region allows Genflow BE to claim reimbursement in further
tranches of €767,253, up to the amount of €3.375 million.
Other Comprehensive Income was charged with a translation gain of £11,853 (2022: £75,158 loss) upon converting the
Subsidiary’s results for the year since acquisition to GBP.
GENFLOW BIOSCIENCES PLC
STRATEGIC REPORT
9
Key Performance Indicators (“KPIs”)
The Board monitors the activities and performance of the Group on a regular basis. The Board uses financial indicators based
on budget versus actual to assess the performance of the Group. The indicators set out below will be used by the Board to
assess performance.
The main financial KPI for the Group at this stage are the level of cash and cash equivalents. Non-financial KPIs are more
relevant at this stage, in line with the monitoring of progress of key milestones in the R&D phase. These below key KPIs allow
the Board to monitor costs and plan future research and development activities.
Due to the Group being in the early stages of research and development, it is yet to reach its key milestones such as
completing clinical trials. However, the Group continues to hit soft-milestones as its journey progresses.
Statement by the directors in performance of their statutory duties in accordance with s172(1) of the Companies Act
2006
The Director’s believe they have acted in the way most likely to promote the success of the Group for the benefit of its
members as a whole, as required by s172(1) of the Companies Act 2006. The requirements of s172 are for the Directors to:
• Consider the likely consequences of any decision in the long term;
• Act fairly between the members of the Company;
• Maintain a reputation for high standards of business conduct;
• Consider the interests of the Group’s employees;
• Foster the Group’s relationships with suppliers and others; and
• Consider the impact of the Group’s operations on the community and environment.
The application of the s172 requirements are demonstrated throughout this report and the financial statements as a whole,
with the following examples representing some of the key decisions made in 2023 and up to the date of the approval of these
financial statements:
• Entering into Collaboration Agreements with prestigious organisations to widen the Group’s ability to obtain valuable
research and to tap into the knowledge of other researchers.
• Exploring non-dilutive financing opportunities such as regional government grants to expedite areas of key research
and development without diluting the holding of existing shareholders.
• Expanding on the Company’s portfolio of intellectual property by filing new patent applications in order to protect the
Company’s research and development progress.
• Attending the annual AGM and prepared to answer any questions raised by shareholders.
• Presenting at conferences and published recordings on the Group’s research and development.
• Securing arrangements with SAB members who are experts in sub-sectors of the longevity field, to enhance the
skills and experience required for the Company as it progresses.
• Expanding organisational capability through appointing experienced Board members to govern and lead the
Company.
• Intending to limit the use of animal models to what is necessary by the regulatory authorities (FDA, EMA, MHRA)
and to that extent, the Company will seek to use alternatives, such as artificial organs built with human cell organoids,
in testing rather than using animal models. These organoids mimic the function of a natural organ, therefore they
deliver more relevant information on the potential safety and efficacy of the drug in humans. However, these
organoids do not reflect the interaction of the organ with other organs, therefore testing on animals cannot always
be avoided.
• Ensuring all experiments using animal models are put to an independent ethical committee for appropriate approval.
Principles 2 and 3 of the Corporate Governance Statement on page 17 provides further evidence for how Section 172(1) has
been applied to strategic issues, risks or opportunities across key stakeholder groups.
By order of the Board
Eric Leire
Chief Executive Officer
3 May 2024
2023 2022
Cash and cash equivalents £683,974 £2,356,225
Interaction with health authorities 1 -
Intellectual property held 4 2
In vivo data for targeted indication (Werner and MASH) 2 2
GENFLOW BIOSCIENCES PLC
OPERATING RISKS AND UNCERTAINTIES
10
Set out below are the key operating risks and uncertainties affecting the Group.
Research and development risk
The Group operates in the biotechnology development sectors and will carry out complex scientific research. If the research,
preclinical testing or clinical trials of any of its product candidates fail, meaning that these candidates will not be licensed or
marketed, this would result in a complete absence of revenue from these failed candidates. Additionally, any positive results
from trials carried out on animals may not necessarily transfer to humans. For example, the mouse model study for Werner
Syndrome cannot yet be seen to be fully reliable.
Mitigation: The Company will minimise this risk by broadening its drug candidate portfolio. Furthermore, the Company
establishing a culture of collaboration with other research organisations with complementary expertise. Translational projects
such as pre-clinical development of SIRT6-AAV require the integration of many scientific disciplines and breaking down of
the 'cultural' barriers that sometimes exist between the disciplines.
Timeline risk
Failure can occur at any stage of clinical development and, as a result, enforced delays to the clinical development plan could
hinder or prevent commercialisation of the Group's product candidates. Many markets where the Group intends to market its
future products, including the US, Europe and Asia, expect proposed new pharmaceutical products to pass stringent
standards. As a result, clinical trial design is extremely important, but costly and time-consuming, in order to satisfy national
government regulatory authorities, clinical investigators, hospital ethics committees, institutional review boards, customers
and distributors.
Mitigation: The Company intends to minimise this risk by retaining the skills and knowledge of the Scientific Advisory Board
and monitoring R&D progress against budget and millstones. The Company will also apply for Orphan Drug Designation
which provides a form of scientific advice, allowing sponsors to get answers to their questions on the types of studies needed
to demonstrate the medicine's quality, benefits and risks, and information on the significant benefit of the medicine.
Risks related to future funding requirements
The funds raised by the Company, plus the Wallonia Grant are intended to support the Group’s pre-clinical development
activities. Additional capital will have to be raised to support clinical trial activities through established and highly-regulated
pathways to assess safety, tolerability and efficacy of each of its products before applications can be made to individual
countries or markets. Furthermore, such clinical trials are typically expensive, complex and can take considerable time to
complete.
Whilst the Company believes that it has raised sufficient funds to enable it to undertake all work preparatory to large animal
studies over the next 18 months, the Company will need to raise further funds to complete the development and
commercialisation of its products and to proceed with any future product candidates.
Mitigation: The Company keeps close control over budgeted vs actual expenditure to minimise over spending and to track
progress against milestones. The Group will also seek to look at alternative funding such as grants. The Group also has
further fundraising at its disposal, however, it cannot be guaranteed that further funding from investors will be available when
required.
Risk related to dependence on key personnel
The Group is highly dependent on the expertise and experience of the Directors, senior management and the Scientific
Advisory Board and in particular Dr Eric Leire and Dr Vera Gorbunova. Recruiting and retaining qualified personnel (such as
Dr Eric Leire and Dr Vera Gorbunova), consultants and advisers with the relevant gene therapy expertise will be important to
its success.
Mitigation: The Company minimises this risk by bringing additional competencies within the management team, offering an
attractive remuneration package and including share-based compensation within the remuneration packages of Board
members and key personnel. Furthermore, the Company is entering into scientific collaborations with organisations in UK,
Europe and USA which allows the Company to utilise the experience of personnel within these organisations.
The Exclusive Licence Agreement risk
The success of the Group’s business is highly dependent upon the Exclusive Licence granted to Genflow BE by the University
of Rochester. Under the terms of the Exclusive Licence Agreement, Genflow BE is required to maintain high standards and
meet various development milestones and expenditure requirements.
If the Group fails to meet its obligations under the Exclusive Licence Agreement or if the Exclusive Licence is terminated for
any reason, it could have a material adverse effect on the business, results of operations, financial condition and prospects
of the Group.
GENFLOW BIOSCIENCES PLC
OPERATING RISKS AND UNCERTAINTIES
11
Mitigation: The Company put in place a mitigation strategy upon entering into the License Agreement by designing a licensing
agreement that aligns the interests of all parties involved. Furthermore, the licensee’s obligations included in the agreement
are realistic and proportionate to meet with appropriate monitoring by the Board.
IP risk
There is no guarantee that the patent applications will result in granted patents or provide the appropriate level of protection.
The Exclusive Licence granted to Genflow BE pursuant to the Exclusive Licence Agreement is conditional upon the success
of the GF-1002 patent application. The commercial success of the Group is dependent, in part, on non-infringement of patents
by other third parties. An adverse judgment against the Group may give rise to significant liability in monetary damages, legal
fees and a requirement to cease manufacturing, marketing or selling products.
Mitigation: A constant monitoring of third parties’ activities by IP counsel will reduce this risk and enable the Group to quickly
react in case of infringement. Moreover, the Group has the right to file infringement complaints with the courts and to defend
its patent rights.
Risk related to the use of Adeno Associated Viruses
There is a risk that safety issues may arise when the Group’s products are tested. This risk is common to all new classes of
clinical treatment and, as with all other biotechnology product companies, there is a general risk that trials may not be
successful.
Mitigation: The Company minimises this risk by engineering its AAVs as safer non immunologic gene delivery vectors.
Furthermore, in parallel to the design of improved AAVs, the Company is also exploring other ‘back-up’ gene delivery methods
such as exosomes.
GENFLOW BIOSCIENCES PLC
DIRECTORS’ REPORT
12
The Directors present their Report, together with the Group financial statements and Independent Auditor’s Report, for the
year ended 31 December 2023.
Principal Activities and Business Review
The Company is a preclinical biotechnology company focused on the development of innovative biological interventions
(namely gene therapies) which are aimed at tackling the effects of aging, potentially slowing or halting the aging process and
so reducing the incidence of age-related diseases and thereby increasing health span.
A detailed review of the business of the Group during the year and an indication of likely future developments may be found
in the Chairperson’s Statement on page 3.
Principal risks and uncertainties are discussed on page 10.
Section 172 of The Companies Act has been considered in the Strategic Report on page 5. The Board is committed to
consideration of all stakeholders in their decision making and conduct of the Group’s business.
Results and Dividends
The loss of the Group for the year ended 31 December 2023 from continued operations amounts to £1,628,705 (2022:
£1,335,325).
The Directors do not recommend the payment of a dividend for the year.
Directors
The Directors who held office during the year and up to the date of signature of the financial statements were as follows:
Tamara Joseph
Eric Leire
Peter King-Lewis
Guy-Charles Fenneau De La Horie
Yassine Bendiabdallah
Directors’ Interests
The Directors who served during the year ended 31 December 2023 had the following beneficial interests in the shares of the
Company at year end:
Director
31 December 2022 31 December 2023 As at the date of this
report
Ordinary
Shares
Options
Ordinary
Shares
Options
Ordinary
Shares
Options
Eric Leire
(1)
120,414,999 - 120,414,999 - 124,414,999 -
Yassine Bendiabdallah 470,500 - 470,500 - 1,270,500 -
Peter King-Lewis 382,000 - 382,000 - 1,182,000 -
Guy-Charles Fenneau De La Horie 300,000 - 300,000 - 1,100,000 -
Tamara Joseph - - - - 800,000 -
(1) Eric’s wife, Ms J Pattison, holds 150,360 Ordinary Shares.
Substantial Shareholdings
The Company is aware that, as at 3 May 2024, other than the Directors, the interests of Shareholders holding three per cent
or more of the issued share capital of the Company were as shown in the table below:
Shareholder Shares held Percentage of
holdings
Eric Leire 120,414,999 35.5%
Premier Miton 32,000,000 9.2%
Adrian Beeston 17,475,000 5.0%
Jonathan Mark Swann 16,874,000 4.8%
Samantha Bauer 14,500,000 4.1%
Longevity Tech Fund 10,499,998 3.0%
Sarah Beeston 10,000,000 2.9%
GENFLOW BIOSCIENCES PLC
DIRECTORS’ REPORT
13
Political Contribution
The Group did not make any contributions to political parties during the year.
Corporate Responsibility
Environmental
As a development stage biotechnology business, the Group’s operations are at a relatively small scale. As such, the Group’s
environmental impact is relatively small when compared with larger businesses in the sector. Nevertheless, the Board
recognises its responsibility to protect the environment (particularly as the business scales up) and is fully committed to
conserving natural resources and striving for environmental sustainability, by ensuring that its facilities (and the facilities of
academic and contracted collaborators) are operated to optimise energy usage; minimise waste production; and protect
nature and people.
TCFD recommendations serve as a global foundation for effective climate-related disclosures and set out recommended
disclosures structured under four core elements of how companies operate:
o Governance – The organisation’s governance around climate-related risks and opportunities;
o Strategy – The actual and potential impacts of climate-related risks and opportunities for an organisation’s
businesses, strategy, and financial planning;
o Risk Management – The processes used by the organisation to identify, assess, and manage climate-
related risks; and
o Metrics and Targets – The metrics and targets used to assess and manage relevant climate-related risks
and opportunities.
These are supported by recommended disclosures that build on the framework with information intended to help investors
and others understand how reporting companies assess climate-related risks and opportunities.
The table below shows the Group’s current progress against the TCFD recommendations.
TCFD Pillar Recommended Disclosure Genflow Response
Governance
• The board’s oversight of
climate-related risks and
opportunities
• Management’s role in
assessing and managing
climate related risks and
opportunities
As a research stage biotechnology business, the
Group’s operations are at a relatively small scale
and so is its environmental impact.
The Board has oversight of climate-related matters
(which include risks and opportunities). The Board
is supported by the Audit Committee, which is
responsible for keeping under review the adequacy
and effectiveness of the Group’s internal control and
risk management systems, which consider climate-
related risks.
Strategy
• Climate-related risks and
opportunities identification
• Climate-related risks and
opportunities impacts
• Resilience of the
organisation’s strategy
Genflow is committed to a net zero and healthier
planet, and this is part of the Group’s strategic long-
term priorities.
The Board is committed to conserving natural
resources and striving for environmental
sustainability, by ensuring that its facilities (and the
facilities of academic and contracted collaborators)
are operated to optimise energy usage; minimise
waste production; and protect nature and people.
As Genflow progresses towards testing, ESG will be
at the heart of the Board and management’s vision
and strategy to enable climate-related risks and
opportunities to be identified and suitably
mitigated/actioned.
The information collected will allow the Board to
challenge the Group’s strategy to ensure it is as
resilient as possible.
GENFLOW BIOSCIENCES PLC
DIRECTORS’ REPORT
14
TCFD Pillar Recommended Disclosure Genflow Response
Risk Management
• Identifying and assessing
climate-related risks
• Managing climate-related
risks
• Integration into overall risk
management
Given the small scale of its current operations,
Genflow has the ability to embed climate-related
risk management systems into its overall internal
control systems from the start of its journey, thus
almost eliminating the occurrence of transition risk.
As operations scale up, the identification,
assessment and effective management of climate-
related risks and opportunities will be actively
discussed during Board and management
meetings.
Metrics and Targets
• Climate-related metrics
• Scope 1, Scope 2, and Scope
3 emissions.
• Climate-related targets
As the Group’s operations scale up, it will continue
to monitor its energy use and its status as a low
energy user. The Group will seek to collect,
structure, and effectively disclose related
performance data for the material, climate-related
risks and opportunities identified where relevant.
The Board will also look to adopt the Sustainability
Accounting Standards Board (SASB)
recommended disclosures once it is operating on a
larger scale.
Greenhouse gas emissions
The Company used less than 40,000kWh of energy in the United Kingdom during 2023 and therefore, does not report on
energy consumption and emissions under the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and
Carbon Report) Regulations 2018.
Social
The Board is committed to creating a positive, inclusive and welcoming work environment for its employees, workers, job
applicants and academic and business partners. The Group ensures that people receive equal treatment, regardless of
gender, gender-identity, age, disability, religion, belief, political views, sexual orientation, marital status, nationality or race,
physical or mental health.
The Directors believe that diversity is fundamental to the Group and to the success of developing innovative therapeutic
treatments. The Board is committed to creating a diverse environment, where the rights and differences of everyone, directly
or indirectly operating within the Group, are valued.
Health and safety
The Company operates a comprehensive health and safety programme which will seek to ensure the wellbeing and security
of its employees once it begins to recruit. The Board will at all times work to ensure that the Group complies with the highest
standards of ethical and safety standards. In addition, the Group uses hazardous, or potentially hazardous, chemical and
biological materials during its research and development programmes. These materials are necessary for the core research
activities undertaken by the Group. The Group is committed to ensuring that hazardous chemicals and biological materials
are acquired, stored, transferred, modified, handled, and disposed of in a way that minimises any potential adverse effects to
human health and to the environment. Their use is based on both an understanding of the hazards they present and on the
corresponding controls aimed at managing the risk of exposure. The Group complies with the local and national guidelines in
all matters of health and safety.
For scientific and regulatory reasons, animal studies remain a crucial part of the Group’s work to deliver safe and effective
therapies, which benefit animal and patients’ health and the wellbeing of our society. At present it is not possible, either due
to lack of suitable alternatives, or because animal studies are required by regulatory authorities, for the Group to eliminate
the need for animal studies in its work. The Group recognises the ethical responsibility to treat all animals respectfully, while
striving to minimise their pain or distress, and to avoid it completely when possible. To this end, the Group strictly complies
with all applicable international and local legislation and regulatory guidelines and, furthermore, is committed to following the
high standards of internationally recognised practices on the humane treatment of animals. The Group upholds and embraces
the “3Rs” of animal research, namely:
• the replacement of animals when possible and/or acceptable;
• the reduction of the numbers of experiments and of animals required by each experiment; and
• the minimisation of pain and distress, by means of refinement of animal studies procedures.
GENFLOW BIOSCIENCES PLC
DIRECTORS’ REPORT
15
Principal Risks and Uncertainties
The management of the business and the execution of the Group’s strategy are subject to a number of risks. Risks are
formally reviewed by the Board, and appropriate processes are put in place to monitor and mitigate them. The principal
business risks affecting the Group are set out on page 10.
Financial Risk Management
The Group’s operations expose it to a variety of financial risks that include the effect of changes in foreign currency exchange
rates, funding risk, credit risk, liquidity risk and interest rate risk. The Group has a risk management programme in place that
seeks to limit the adverse effects on the financial performance of the Group. The Group does not use derivative financial
instruments to manage foreign currency risk and, as such, no hedge accounting is applied.
Details of the Group’s financial risk management policies are set out in Note 3 to the financial statements.
Internal Controls
The Board recognises the importance of both financial and non-financial controls and has reviewed the Group’s control
environment and any related shortfalls during the year. Since the Group was established, the Directors are satisfied that,
given the current size and activities of the Group, adequate internal controls have been implemented. Whilst they are aware
that no system can provide absolute assurance against material misstatement or loss, in light of the current activity and
proposed future development of the Group, continuing reviews of internal controls will be undertaken to ensure that they are
adequate and effective.
Going Concern
Management has prepared a forecast covering 12 month post-year end and believe that current cash reserves will adequately
cover the working capital requirements of the Group, in addition to meeting research and development commitments. As
such, the Directors have a reasonable expectation that the Group has, and will have access, to adequate resources to
continue in operational existence for the foreseeable future and, therefore, continue to adopt the going concern basis in
preparing the Annual Report and financial statements. Further details on their assumptions and their conclusion thereon are
included in the statement on going concern in Note 2.4 of the financial statements.
Directors’ and Officers’ Indemnity Insurance
During the financial year, the Company maintained insurance cover for its Directors and Officers under a Directors’ and
Officers’ liability insurance policy. The Company has not provided any qualifying indemnity cover for the Directors.
Events after the reporting period
Events after the reporting year are set out in Note 20 to the financial statements.
Provision of Information to Auditor
So far as each of the Directors is aware at the time this report is approved:
• there is no relevant audit information of which the Company's auditor is unaware; and
• the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit
information and to establish that the auditor is aware of that information.
Auditor
PKF Littlejohn LLP has signified its willingness to continue in office as auditor.
This report was approved by the Board on 3 May 2024 and signed on its behalf.
Tamara Joseph
Non-Executive Chairperson
GENFLOW BIOSCIENCES PLC
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
16
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable
law and regulation.
Company law in the United Kingdom requires the Directors to prepare Group and Company financial statements for each
financial year which give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of
the Group for that year. Additionally, the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules require
the Directors to prepare the Group financial statements in accordance with UK-adopted international financial reporting
standards in accordance with the requirements of the Companies Act 2006; the Company financial statements are prepared
on the same basis.
In preparing the Group and Company financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed, subject to any material departures disclosed and
explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and
company will continue in business.
So far as each Director is aware, there is no relevant audit information of which the Company’s auditors are unaware, and
the Directors have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any
relevant audit information and to establish that the Company’s auditors are aware of that information.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable
them to ensure that the financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the Group and Company and for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The maintenance and integrity of the Company’s website is the responsibility of the Directors: the work carried out by the
auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any
changes that may have occurred to the financial statements since they were initially presented on the website.
Legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from
legislation in other jurisdictions.
GENFLOW BIOSCIENCES PLC
CORPORATE GOVERNANCE REPORT
17
The Group is not required to comply with the UK Code of Corporate Governance and has not voluntarily adopted it. However,
the Directors recognise the importance of sound corporate governance and the Board intends, to the extent it considers
appropriate in light of the Group’s size, stage of development and resources, to implement certain corporate governance
recommendations.
The Directors have responsibility for the overall corporate governance of the Group and recognise the need for the highest
standards of behaviour and accountability. As such, the Company follows the QCA Corporate Governance Code (“the Code”)
as its code of corporate governance. The Code is published by the Quoted Companies Alliance (“QCA”) and is available at
www.theqca.com.
Corporate Governance Report
The QCA Code sets out 10 principles that should be applied. These are listed below together with a short explanation of how
the Group and Company applies each of the principles:
Principle One
Business Model and Strategy
The Board has concluded that the highest medium and long term value can be delivered to its shareholders by the adoption
of a focussed strategy for the Group.
The Group’s strategy is to focus on the development of innovative biological interventions (namely gene therapies) which are
aimed at tackling the effects of aging, potentially slowing or halting the aging process and so reducing the incidence of age-
related diseases and thereby increasing health span. Further details on the Group strategy is set out in the Strategic Report
on page 5.
Principle Two
Understanding Shareholder Needs and Expectations
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders.
Shareholders are encouraged to attend the Company’s Annual General Meeting. Investors also have access to current
information on the Company though its website, www.genflowbio.com, and via communication with Directors, in particular,
Eric Leire, (Chief Executive Officer) who is responsible for shareholder liaison.
The Company’s annual report, Notice of Annual General Meetings (AGM) is sent to all shareholders and can be downloaded
from the Company’s website. Copies of the interim report and other investor presentations are available on the Company’s
website.
At the AGM, separate resolutions are proposed on each substantial issue. For each proposed resolution, proxy forms are
issued which provide voting shareholders with an opportunity to vote in advance of the AGM if they are unable to vote in
person. The Company’s registrars count the proxy votes which are properly recorded and the results of the AGM are
announced through regulatory news flow (“RNS”) . The Board is keen to ensure that the voting decisions of shareholders are
reviewed and monitored and that approvals sought at the Company’s AGM are, as much as possible, within the recommended
guidelines of the QCA Code.
Shareholders are kept up to date via RNS on matters of a material substance and regulatory nature. Periodic updates are
provided to the market and any deviations to these updates are announced via RNS.
Non-deal roadshows may be arranged throughout the year to meet with existing shareholders and potential new stakeholders
to maintain, as much as possible, transparency and dialogue with the market. Additionally investor presentations can be found
on the Company’s website.
Principle Three
Considering wider stakeholder and social responsibilities
The Board recognises that the long term success of the Company is reliant upon the efforts of the management and
employees of the Company and its scientific advisory board, contractors, suppliers, regulators and other stakeholders. As the
Group grows and develops, the Board have plans to put in place a range of processes and systems to ensure that there is
close oversight and contact with its key resources and relationships. For example, all employees of the Company will
participate in structured Company-wide annual assessment processes which are designed to ensure that there is an open
and confidential dialogue with each person in the Company to help ensure successful two way communication with agreement
on goals, targets and aspirations of the employee and the Company. The Board recognises that these feedback processes
will help to ensure that the Company can respond to new issues and opportunities that arise to further the success of
employees and the Company. The Company has close ongoing relationships with a broad range of its stakeholders and
provides them with the opportunity to raise issues and provide feedback to the Company.
GENFLOW BIOSCIENCES PLC
CORPORATE GOVERNANCE REPORT
18
Principle Four
Risk Management
In addition to its other roles and responsibilities, the Audit Committee is responsible to the Board for ensuring that procedures
are in place and are being implemented effectively to identify, evaluate and manage the significant risks faced by the
Company. The risk assessment matrix below sets out those risks, and identifies their ownership and the controls that are in
place. This matrix is updated as changes arise in the nature of risks or the controls that are implemented to mitigate them.
The Audit Committee reviews the risk matrix and the effectiveness of scenario testing on a regular basis. The following
principal risks and controls to mitigate them, have been identified:
Activity Risk Impact Control(s)
Environmental Risk Negative environmental
impact of operations
The Group’s operations
are at a relatively small
scale. As such, the
Group’s environmental
impact is relatively small.
Ongoing monitoring to
ensure that its facilities and
the facilities of academic
and contracted
collaborators are operated
to optimise energy usage
minimise waste production
and protect nature and
people.
Research and
development Risk
The research, preclinical
testing or clinical trials of
any product candidates
could fail, meaning that
these candidates will not
be licensed or marketed.
This could result in a
complete absence of
revenue from these failed
candidates.
Ongoing monitoring of
results, assessment by
independent experts on
viability of studies and the
retention of the SAB
members.
Availability of licenses
Risk
Failure to meet
obligations under the
Exclusive Licence
Agreement could result
in its termination.
The Group would not
have any right to
commercialise GF-1002
which could have a
material adverse effect
on the business, result of
operations, financial
condition and prospects
of the Group.
Ongoing monitoring of the
Company’s obligations
under the Exclusive
Licence Agreement
including the payments of
amounts due and reporting
obligations.
Grant and infringement
of patents Risk
There is no guarantee
that the Patent
Applications will result in
granted patents. Also,
the Company may not be
able to monitor
infringement of its
patents by third parties,
allowing competitors to
increase their market
share.
The commercial success
of the Group is
dependent, in part, on
non-infringement of
patents by other third
parties.
Provide ongoing assistance
as may be required by the
applicants to the Patent
Application.
In addition to IP protection,
the Company also relies on
trade secrets to create
entry barriers to potential
competitors.
Dependence on key
personnel Risk
The Group is highly
dependent on the
expertise and experience
of the Directors, senior
management and the
Scientific Advisory
Board.
A loss of key personnel
could result in a loss of
knowledge and
personnel taking their
knowledge to
competitors.
Recruiting and retaining
and incentivising qualified
personnel, consultants and
advisers with the relevant
gene therapy expertise.
Strategic Risk Market downturn
Failure to deliver
commerciality
Change in macro-
economic conditions
Ongoing monitoring of
economic events and
markets
Active marketing and
experienced management
Financial Risk Misappropriation of funds
IT security
Fraudulent activity and
loss of funds
Loss of critical financial
data
Robust financial controls
and split of duties
Regular back up of data
online and locally.
GENFLOW BIOSCIENCES PLC
CORPORATE GOVERNANCE REPORT
19
Ability to raise further
capital
The Group may be
required to reduce the
scope of its development
Ongoing monitoring of
economic events and
markets.
Regulatory Risk
The Group will need to
obtain various approvals
from a number of
regulatory authorities in
order to market its future
products.
The Group’s activities will
be adversely affected by
regulatory factors such
as the suspension of
licences and changes to
regulatory requirements
that will govern any novel
gene therapy.
Proactive engagement with
Government at all levels.
The Directors have established procedures, as represented by this statement, for the purpose of providing a system of internal
control. An internal audit function is not considered necessary or practical due to the size of the Company and the close day
to day control exercised by the Executive Director. However, the Board will continue to monitor the need for an internal audit
function. The Board works closely with and has regular ongoing dialogue with the outsourced finance function and has
established appropriate reporting and control mechanisms to ensure the effectiveness of its control systems.
Principle Five
A Well-Functioning Board of Directors
As at the date hereof, the Board comprises, an Executive Director: Eric Leire, a Non-Executive Chairperson Tamara Jospeh
and three Non-Executive Directors Yassine Bendiabdallah, Peter King-Lewis and Guy-Charles Fanneau de la Horie.
Details of the current Directors are set out within Principle Six below. Executive and Non-Executive Directors are subject to
re-election at intervals as set out in the Company’s articles of association (Article 29.1). The service agreement and letters of
appointment of all Directors are available for inspection on reasonable notice at the Company’s registered office during normal
business hours.
The Board meets in-person at least once per year and has quarterly Board calls. During the year, the Company has
established an Audit Committee, the members of which are included in Principle Six below. A Remuneration Committee and
Nomination Committee was also established and seeks to follow the guiding principles laid out by the Quoted Company
Alliance (QCA). No Board member may influence decisions relating to their own specific remuneration.
Dr Bendiabdallah, Ms Joseph, Dr Fanneau De La Horie and Dr King-Lewis are considered to be Independent Directors and
as such the Company is in compliance with the requirement to have a minimum of two independent non-executive directors
on its Board. The Board notes that the expectation of the QCA Code is that the Chairperson will not have an executive capacity
and that the role of the Chairperson and Chief Executive Officer (“CEO”) are not held by the same person. The Board shall
review further appointments as scale and complexity grows.
The Company shall report annually on the number of Board and committee meetings held during the year and the attendance
record of individual Directors. To date in the current financial year, the Directors have a 100% record of attendance at such
meetings. Directors meet formally and informally both in person and by telephone. Formal board meetings held and attended
during the year are detailed below:
Meetings Attended
Meetings eligible to
attend
Eric Leire 4 4
Yassine Bendiabdallah 7 7
Peter King-Lewis
6 6
Guy-Charles Fanneau De La Horie
6 6
Tamara Joseph
5 5
Principle Six
Appropriate Skills and Experience of the Directors
The Board consists of five Directors and, in addition, the Company engages the services of Westend Corporate LLP to act as
the Company Secretary and to provide general financial and corporate assistance. The Company believes that the current
balance of skills in the Board as a whole, reflects a very broad range of commercial and professional skills across geographies
and industries and two of the Directors have experience in public markets.
GENFLOW BIOSCIENCES PLC
CORPORATE GOVERNANCE REPORT
20
The Board shall review annually the appropriateness and opportunity for continuing professional development whether formal
or informal.
Tamara Joseph, Non-Executive Chairperson
Tamara is a seasoned health care leader, having extensive experience in both early-stage and commercial biotech companies
in the US and other markets. Her expertise in the biotech sector includes public and private financings, M&A, global
expansions, and a Nasdaq uplisting. She has also supported Nasdaq financings of over $1B. Her experience, spanning over
25 years, includes acting as a member of the executive team (as Chief Legal Officer and General Counsel) at multiple US
publicly listed companies, as well as leading IT, Public and Government Affairs, and People & Culture teams.
Tamara served as Chief Legal Officer at Nasdaq-listed Spero Therapeutics Inc., a multi-asset, clinical-stage
biopharmaceutical company in Cambridge, Massachusetts, at Nasdaq-listed, Millendo Therapeutics Inc., to support its
transition to a publicly-traded company, and as General Counsel at Enzyvant Therapeutics Inc., a rare disease company
focused on regenerative medicine which is now a subdivision of Sumitomo Pharma. Previously, Tamara has served as an
adviser to the boards of five US publicly traded US biotechs, including Cubist Pharmaceuticals Inc. Tamara has a BA in
Economics from Duke University, a JD from the University of Michigan Law School, and LLM degrees from the College of
Europe in Belgium and the University of Paris. She began her legal career at the law firms of Morrison & Foerster and Fried
Frank, working in New York, Los Angeles, Brussels and Paris. She also serves as a non-executive board member for the
non-profit organizations of BINA Farm Center and Heluna Health, a $1B+ agency focused on improving population health.
Tamara Joseph is a member of the Audit Committee.
Dr Eric Leire, Chief Executive Officer
Dr Eric Leire, MD, MBA, brings to the Company a solid biotechnology expertise through his experience in the pharmaceutical
industry (Pfizer, Schering Plough and Pharmacia), biotechnology (CEO of several private and public biotech companies such
as APT Therapeutics and Paringenix), academia (Research Associate at the Harvard AIDS Institute) and Private Equity
(partner at Biofund Venture Capital). He is the inventor of several patents. He also serves on the board of several
biotechnology companies such as Pherecydes (ALPH.PA), Inhatarget, Immunethep andBSIM Therapeutics. Furthermore,
Eric has been CEO of several cell and gene therapy companies such as Enochian Biosciences (Nasdaq: ENOB) and DanDrit
Biotechnologies (OTC.QB: DDRT). He has also served as Non-Executive Director on the board of several cell and gene
therapy companies such as Genizon (Canada) and FIT Biotechnology (Finland). He holds an MD from Grenoble University
and an MBA from HEC, Paris and Kellogg, Northwestern University.
Dr Yassine Bendiabdallah, Non-Executive Director
Dr Yassine Bendiabdallah (MPharm, PhD, IP) is a Functional Medicine Healthy Ageing Specialist and an expert in Bio-
identical Hormone therapy (BHRT). His previous academic degree as an anti-cancer drug discovery scientist with Cancer
Research UK at University College London has earned him various distinctions and publications in peer-reviewed academic
journals. After a few years in academia, he embarked on an entrepreneurial journey and co-founded the Zen Healthcare
group of pharmacies and wellness clinics with multiple sites in London and worldwide partnerships. His current role is a clinical
director and clinician with interests including age reversal therapies, functional approaches to medicine and intravenous
micronutrient therapies. He also co-founded Pasithea Therapeutics, an innovative biotech company and mental health group
of clinics and was, until March 2023, Chief Operations Officer and head of UK Clinics. He is a director and board member of
a number of companies within the healthcare industry.
Dr Yassine Bendiabdallah is the chairman of the Audit Committee and Remuneration and Nomination Committee.
Dr Peter King-Lewis, Non-Executive Director
Dr Peter King-Lewis studied Medicine at St Bartholomew’s Hospital in London. Prior to that he served for ten years as a
Submarine Seaman Officer and Diver in The Royal Navy. Having completed Post Graduate Training in General Practice (St
Bartholomew’s, St Thomas’, The Chelsea and Westminster and The Priory Roehampton) he founded a Private General
Practice in Central London. Continuing his interest in Hyperbaric Medicine he was an HSE approved Medical Examiner of
Divers. He has a strong interest in Bioidentical Hormones and has practiced Acupuncture alongside more conventional
medicine. Dr King-Lewis also started and runs OfficeGP Ltd which provides Primary Care in the workplace for a variety of
companies. During the last 27 years he has also been the President of The Independent Doctors Federation and Hon Sec,
President and Trustee of the Chelsea Clinical Society.
Dr Peter King-Lewis is a member of the Remuneration and Nomination Committee.
Dr Guy-Charles Fanneau De La Horie, Non-Executive Director
Over the past 20 years, Guy-Charles has built, and led, biotech executive teams where he has acted as Chief Executive
Officer. During his tenures, he has successfully led IPOs and completed multiple fundraisings. Guy-Charles’ expertise in the
biotech field in both public and private companies encompasses launching and selling new drugs in untapped markets, with
successful early access programs. Specifically, Guy-Charles has served as Chief Executive Officer at three biotech
GENFLOW BIOSCIENCES PLC
CORPORATE GOVERNANCE REPORT
21
companies, including, until very recently, Euronext Growth traded, Pherecydes Pharma, a biotech company that develops
treatments against resistant bacterial infections; and Neovacs, a therapeutic vaccine company. Guy-Charles has also held
senior positions at Biogen, a Nasdaq listed global biotechnology company. Guy-Charles managed the IPO and associated
successful financing of Neovacs in 2010, and in 2021, led Pherecydes Pharma through an oversubscribed placing.
Dr Guy-Charles Fanneau De La Horie is a member of the Remuneration and Nomination Committee.
Principle Seven
Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
Internal evaluation of the Board, the Committees and individual Directors is to be undertaken on an annual basis in the form
of peer appraisal and discussions to determine the effectiveness and performance of the various governance components,
as well as the Directors’ continued independence.
The results and recommendations that come out of the appraisals for the Directors shall identify the key corporate and
financial targets that are relevant to each Director and their personal targets in terms of career development and training.
Progress against previous targets shall also be assessed where relevant.
Principle Eight
Corporate Culture
The Board recognises that its decisions regarding strategy and risk will impact the corporate culture of the Company as a
whole and that this will impact the performance of the Company. The Board is very aware that the tone and culture set by the
Board will greatly impact all aspects of the Company as a whole and the way that its scientific advisory board members,
research collaborators and employees behave. The corporate governance arrangements that the Board has adopted are
designed to ensure that the Company delivers long term value to its shareholders and that shareholders have the opportunity
to express their views and expectations for the Company in a manner that encourages open dialogue with the Board. A large
part of the Company’s activities are centred upon what needs to be an open and respectful dialogue with employees, clients
and other stakeholders.
Therefore, the importance of sound ethical values and behaviours is crucial to the ability of the Company to successfully
achieve its corporate objectives. The Directors believe that diversity is fundamental to the Group and to the success of
developing innovative therapeutic treatments. The Board is committed to creating a diverse environment, where the rights
and differences of everyone, directly or indirectly operating within the Group, are valued.
The Board places great importance on this aspect of corporate life and seeks to ensure that this flows through all that the
Company does. The Directors consider that at present the Company has an open culture facilitating comprehensive dialogue
and feedback and enabling positive and constructive challenge. The Company has adopted, with effect from the date of
Admission, a code for Directors’ and employees’ dealings in securities which is appropriate for a company whose securities
are traded and is in accordance with the requirements of the Market Abuse Regulation which came into effect in 2016.
Issues of bribery and corruption are taken seriously, The Company has a zero-tolerance approach to bribery and corruption
and has an anti-bribery and corruption policy in place to protect the Company, its employees and those third parties to which
the business engages with. The policy is provided to staff upon joining the business and training is provided to ensure that all
employees within the business are aware of the importance of preventing bribery and corruption. Each employment contract
specifies that the employee will comply with the policies. There are strong financial controls across the business to ensure on
going monitoring and early detection.
Principle Nine
Maintenance of Governance Structures and Processes
Ultimate authority for all aspects of the Company’s activities rests with the Board, the respective responsibilities of the
Chairperson and Chief Executive Officer arising as a consequence of delegation by the Board. The Board has adopted
appropriate delegations of authority which set out matters which are reserved to the Board. The Chairperson is responsible
for the effectiveness of the Board, while management of the Company’s business and primary contact with shareholders has
been delegated by the Board to the Chief Executive Officer.
Audit Committee
The Audit Committee comprises Ms Joseph and Dr Bendiabdallah, who chairs this committee. This committee has primary
responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company is
properly measured and reported. It receives reports from the executive management and auditors relating to the interim and
annual accounts and the accounting and internal control systems in use throughout the Company. The Audit Committee shall
meet not less than twice in each financial year and it has unrestricted access to the Company’s auditors.
Remuneration and Nomination Committee
The Remuneration comprises Dr King-Lewis, Dr Fanneau De La Horie and Dr Bendiabdallah, who chairs this committee. The
Remuneration and Nomination Committee reviews: remuneration, including making recommendations to the Company and
the Board on the Company’s policy on executive remuneration, including setting the overarching principles, parameters and
GENFLOW BIOSCIENCES PLC
CORPORATE GOVERNANCE REPORT
22
governance framework of each of the Company’s Executive Directors and certain senior executives; and the composition and
make-up of the Board and any committees of the Board and evaluating the balance of skills, knowledge and experience and
the size, structure and composition of the Board and committees of the Board, retirements and appointments of additional
and replacement directors and committee members and will make appropriate recommendations to the Board on such
matters.
Non-Executive Directors
The Board has adopted guidelines for the appointment of Non-Executive Directors which have been in place and which have
been observed throughout the year. These provide for the orderly and constructive succession and rotation of the Chairperson
and Non-Executive Directors insofar as both the Chairperson and Non-Executive Directors will be appointed for an initial term
of three years and may, at the Board’s discretion believing it to be in the best interests of the Company, be appointed for
subsequent terms. The Chairperson may serve as a Non-Executive Director before commencing a first term as Chairperson.
In accordance with the Companies Act 2006, the Board complies with: a duty to act within their powers; a duty to promote the
success of the Company; a duty to exercise independent judgement; a duty to exercise reasonable care, skill and diligence;
a duty to avoid conflicts of interest; a duty not to accept benefits from third parties and a duty to declare any interest in a
proposed transaction or arrangement.
Principle Ten
Shareholder Communication
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders in
compliance with regulations applicable to companies whose shares trade on the Standard Segment of the London Stock
Exchange. All shareholders are encouraged to attend the Company’s Annual General Meeting where they will be given the
opportunity to interact with the Directors.
Copies of all Annual Reports, Notices of Meetings, Circulars sent to shareholders and Prospectus (in respect of the last 5
years) are included on the Company’s website www.genflowbio.com.
Tamara Joseph
Non-Executive Chairperson
3 May 2024
GENFLOW BIOSCIENCES PLC
AUDIT COMMITTEE REPORT
23
Dear Shareholders,
I am pleased to present the Group’s Audit Committee report for the year to 31 December 2023.
Meeting Attendance
The Audit Committee met once in 2023, with the Company’s auditors in attendance. Y Bendiabdallah chaired the meetings
and the Committee’s second board member T Joseph attended.
Composition of the Audit Committee
In line with the QCA, the Committee comprises two independent Non-Executive Directors, including the Chair. The members
of the Audit Committee are Y Bendiabdallah and T Joseph. All current members of the Audit Committee have held, or currently
hold, board-level positions in Biotech with international reach.
The Audit Committee’s membership, as a whole, has competence relevant to the sector in which the Group operates and is
able to function effectively with the appropriate degree of challenge.
Committee Duties
The Audit Committee is committed to:
• Monitoring the integrity of the financial statements and financial performance;
• Reviewing financial statements, significant financial returns to regulators and any financial information of a sensitive
nature;
• Reviewing and challenging internal financial controls and risk management systems including the review of matters
of a non-financial nature, including environmental matters;
• Reviewing and challenging accounting policies, accounting methods and adherence to accounting standards;
• Reviewing and making recommendation with regards to the external auditor, including appointment, independence,
objectivity, effectiveness, performance and remuneration;
• Consulting with the external auditor on the scope of their work and reviewing all major points arising from the audit;
• Ensuring full functionality of the whistleblowing policy.
External Auditor
The external auditor, PKF Littlejohn LLP (“PKF”), was reappointed after consideration by the audit committee and scrutiny of
their independence, objectivity and capabilities. The Audit Committee also received and reviewed a report from the external
auditor setting out to its satisfaction how its independence and objectivity is safeguarded when providing non-audit services.
The value of non-audit services provided by PKF in respect of the year ending 31 December 2023 amounted to £nil (2022:
£nil). During the year there were no circumstances where PKF was engaged to provide services prohibited by the FRC’s 2019
ethical standard or which might have led to a conflict of interest.
Financial Statements
The Audit Committee reviewed and agreed the external auditor’s strategy and approach in advance of their audit for the year
ended 31 December 2023, and reviewed reports on the outcome of the audit.
Going Concern and Viability
The Audit Committee reviews supporting papers from management to support the Going Concern statement set out in note
2.4 and the Directors report. This includes sensitivity analysis over key assumptions. Following this review, the Audit
Committee recommended to the Board the approval of both statements.
Internal Audit
The Group does not have a formal internal audit function due to the size of the Group and the low number of transactions
during the year. The Audit Committee considers this is appropriate given the close involvement of the executive director and
external accountant on a day-to-day basis. However, the need for an internal audit function will be kept under review by the
Audit Committee on behalf of the Board.
The Year Ahead
The Audit Committee is focused on maintaining a framework of internal control, the effectiveness of which will be regularly
reviewed by the Audit Committee in light of an ongoing assessment of significant risks facing the Company and the Group.
The Audit Committee is committed to assisting the Board in discharging its duties regarding the financial statements,
accounting policies and the maintenance of proper internal business, and operational and financial controls.
This report was approved by the Board on 3 May 2024.
Yassine Bendiabdallah
Chairman of the Audit Committee
GENFLOW BIOSCIENCES PLC
REMUNERATION AND NOMINATION COMMITTEE REPORT
24
Dear Shareholders,
I am pleased to present the Group’s Remuneration and Nomination Committee report for the year to 31 December 2023.
Committee Composition and Meeting Attendance
The Committee is made up of Independent, Non-Executive Directors and shall meet not less than twice in each financial
year. The Remuneration and Nomination Committee last met on 16 October 2023.
Committee Duties
The Remuneration Committee is responsible for:
• Determining and agreeing with the Board the framework or broad policy for the remuneration of the executive offices
and other senior managers;
• Take into account all factors which it deems necessary including the level of the Company’s remuneration relative to
other companies to ensure that members of the company are provided with appropriate incentives to encourage
enhanced performance and are, in a fair and reasonable manner, rewarded for their individual contributions to the
success of the Company; and
• Determining each year whether awards will be made, and if so, the overall amounts of such awards, the individual
awards to executive directors and other senior executives and the performance targets to be used.
Remuneration Policy
Due to the Group being in the early stages of its journey and the Board’s collective commitment to conserve cash, a bonus
and incentive awards scheme does not form part of the executive or non-executive remuneration package. This will be kept
under review by the Committee as the Group’s activity progresses.
Directors notice periods
The Executive Director is subject to a twelve month notice period and all non-executive Directors are subject to a three month
notice period.
Loss of office
None of the Directors contractually have claim to compensation for loss of office.
Base salary
The Committee’s objective is to provide a competitive base salary reflective of the skills and experience of the relevant
individual. These will be reviewed annually or on a significant change of responsibilities or change in market practice or a
change in the size or complexity of the business. The Remuneration Committee also takes into account external market data
and pay and employment conditions elsewhere in the Group and industry when considering increases to base salary levels.
There are no performance criteria associated with receiving this benefit.
Pension
Pensions are provided to aid recruitment and retention by allowing the Directors to make provision for long-term retirement
benefits. These are comparable with similar roles in similar companies. A Pension scheme has been set-up where by Directors
receive 3% per cent of their base salary. There is no performance criteria associated with receiving this benefit.
Non-Executive Directors
Non-Executive Directors each receive a market rate basic fee, subject to time commitment requirements, for holding the office
of Non-Executive Director which is set by the board as a whole.
Annual Report on directors’ remuneration
Executive Directors (audited)
The remuneration of the Executive Directors for the year ended 31 December 2023 and period ended 31 December 2022
was as shown in the table below:
31 December 2023
Directors’
fees
Bonus
Taxable
benefits
Pension
benefits
Options
issued
Total
£ £ £ £ £ £
Eric Leire
232,008 - - - - 232,008
232,008 - - - - 232,008
GENFLOW BIOSCIENCES PLC
REMUNERATION AND NOMINATION COMMITTEE REPORT
25
31 December 2022
Directors’
fees
Bonus
Taxable
benefits
Pension
benefits
Options
issued
Total
£ £ £ £ £ £
Eric Leire
235,432 - - - - 235,432
235,432 - - - - 235,432
The Company has presented an annual percentage change of nil% (2022: 63%) in the amount paid to the CEO.
Non-Executive Directors (audited)
The basic fee for the Non-Executive Directors for 2023 and 2022 was £30,000.
The remuneration of the Non-Executive Directors for the year ended 31 December 2023 and period ended 31 December
2022 was as shown in the table below:
31 December 2023
Directors’
fees
Bonus
Taxable
benefits
Pension
benefits
Options
issued
Total
£ £ £ £ £ £
Yassine Bendiabdallah
30,000 - - 713 - 30,713
Peter King-Lewis
30,000 - - 713 - 30,713
Guy-Charles Fanneau de La Horie
30,000 - - - - 30,000
Tamara Joseph
30,000 - - - - 30,000
120,000 - - 1,426 - 121,426
31 December 2022
Directors’
fees
Bonus
Taxable
benefits
Pension
benefits
Options
issued
Total
£ £ £ £ £ £
Yassine Bendiabdallah
28,810 - - 653 - 29,463
Peter King-Lewis
28,810 - - 653 - 29,463
Gabrielle Silve
r
13,810 - - 297 - 14,107
Andrew Scott
12,522 - - 179 - 12,701
Guy-Charles Fanneau de La Horie
15,000 - - - - 15,000
Tamara Joseph
15,000 - - - - 15,000
113,952 - - 1,782 - 115,734
Statement of Directors’ shareholding and share interests (audited)
The tables below set out the Directors’ interests (including those of their connected persons) in Genflow Biosciences Plc
shares as at 31 December 2023.
Executive Directors
Shares owned outright
Eric Leire
(1)
120,414,999
• Eric indirectly holds a further 150,360 Ordinary Shares by way of his wife’s shareholding.
There were no changes in the Executive Director’s interests between the year end and the date of this report.
GENFLOW BIOSCIENCES PLC
REMUNERATION AND NOMINATION COMMITTEE REPORT
26
Non-Executive Directors
As at the date of this report, Non-Executive Directors’ interests were as follows;
Shares owned outright
Yassine Bendiabdallah
470,500
Peter King-Lewis
382,000
Tamara Joseph
-
Guy-Charles Fanneau De La Horie
300,000
Group spend on pay
During the year, the Group’s administration expenses totalled £1,798,559 (2022: £1,822,232) of which 21.04% (2022: 19.8%)
represented remuneration paid to Directors of the Company.
Shareholder Voting at the Annual General Meeting
The Directors’ Remuneration Report for the period ended 31 December 2022 was approved by the shareholders at the
adjourned Annual General Meeting held on 8 June 2023.
The votes cast were as follows:
Number of votes % of votes cast
For 128,514,675 99.9%
Against 71,531 0.1%
Withheld - -
The year ahead
The Committee has been charged by the Board to ensure that the Group’s pay and benefits practices are competitive, able
to attract high calibre people and to ensure those people are suitably incentivised to perform and remain with the Group over
the long term. The Committee will continue to meet twice a year to ensure remuneration remains aligned with the Company’s
objectives and strategy.
The Committee and I are focused on ensuring that reward at the Company continues to be closely aligned with the delivery
of long-term shareholder value.
This report was approved by the Board on 3 May 2024.
Yassine Bendiabdallah
Chairman of the Remuneration Committee
GENFLOW BIOSCIENCES PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GENFLOW BIOSCIENCES PLC
27
Opinion
We have audited the financial statements of Genflow Biosciences Plc (the ‘parent company’) and its subsidiaries (the ‘group’)
for the year ended 31 December 2023 which comprise the Consolidated and Parent Company Statements of Financial
Position, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity, the
Parent Company Statement of Changes in Equity, the Consolidated and Parent Company Statements of Cash Flows and
notes to the financial statements, including significant accounting policies. The financial reporting framework that has been
applied in their preparation is applicable law and UK-adopted international accounting standards and as regards the parent
company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
• the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as
at 31 December 2023 and of the group’s loss for the year then ended;
• the group financial statements have been properly prepared in accordance with UK-adopted international accounting
standards;
• the parent company financial statements have been properly prepared in accordance with UK-adopted international
accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the group and parent company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as
applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the group’s and parent
company’s ability to continue to adopt the going concern basis of accounting included management’s assessment of going
concern and associated cashflow forecasts for a period of more than 12 months from the date of approval of the financial
statements. We reviewed management’s assessment and made enquiries of management to confirm key assumptions and
inputs used in the assessment. We evaluated the inputs to the cashflow forecast for reasonableness, including all grant
income receivable and the recent equity fundraise, which are expected to cover working capital for the going concern period.
We also performed sensitivity analysis to test the going concern model.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the group’s or parent company's ability to continue as a going concern
for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
At the planning stage, materiality is used to determine the financial statement areas that are included within the scope of our
audit and the extent of sample sizes during the audit. This is reviewed accordingly during fieldwork and completion dependent
on adjustments made during the audit.
The group was audited to a level of materiality for the financial statements as a whole of £79,900 (PY: £64,500), a benchmark
calculated using 5% of the loss before tax of the group (PY: 5% of the loss before tax). We consider the loss before tax to be
the most significant determinant of the group’s financial position and performance used by shareholders and investors for the
current period, with the significant balances in the period being the administrative expenditure and loss for the period.
The performance materiality applied at the group level was £56,000 (PY: £45,150) and we have reported misstatements
during our audit work above £3,995 (PY: £3,225), as well as differences below that threshold that, in our view, warranted
reporting on qualitative grounds. The group performance materiality was set by us at 70% of materiality (PY: 70% of
materiality). This was deemed reasonable due to the relatively low level of transactions and simple nature of these
transactions and also due to this being the third year we are performing the audit. Performance materiality was set to ensure
sufficient coverage of the key balances.
The materiality applied to the parent company was £72,000 (PY: £44,000) being 5% of the loss before tax (PY: 5% of loss
before tax). Loss before tax was deemed an appropriate benchmark for materiality calculation as it provides the best indication
GENFLOW BIOSCIENCES PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GENFLOW BIOSCIENCES PLC
28
of annual performance during the research phase and given no development assets are capitalised. Performance materiality
was £50,400 (PY: £30,800) and this was set by us at 70% of materiality (PY: 70% of materiality). This was deemed reasonable
due to the relatively low level of transactions and simple nature of these transactions and also due to this being the third year
we are performing the audit.
No component auditors were used and both subsidiaries were audited by us. Genflow Biosciences SRL was assessed as a
significant component and was audited to a materiality of £47,000 (PY: £23,000) being 5% of the loss before tax (PY: 5% of
loss before tax), with performance materiality applied of £33,000 (PY: £16,100). We agreed with the audit committee that we
would report any individual audit difference in excess of £2,350 (PY: £1,150) for Genflow Biosciences SRL and differences
below this threshold that, in our review, warranted reporting on qualitative grounds.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
We looked at areas involving significant accounting estimates and judgements by the directors including the recoverability
and recognition of grant income and the carrying value of investments - parent company. We also addressed the risk of
management override of internal controls, including among other matters, consideration of whether there was evidence of
bias that represented a risk of material misstatement due to fraud. Procedures were then performed to address the risks
identified and for the most significant assessed risks of material misstatement, the procedures performed are outlined below
in the Key audit matters section of this report.
The audit of the parent company and its subsidiaries was performed in London by us, using a team with specific experience
of auditing publicly listed entities.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due
to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources
in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Key Audit Matter How our scope addressed this matter
Recoverability and recognition of grant income (Group
only - see Note 2.7 and 10 in the financial statements)
The Group received a non-dilutive research grant award of
up to €3.375m from the regional government of Wallonia in
southern Belgium SPW. The Grant contributes to the costs
of the pre-clinical research and development program.
There is a significant risk that the grant income recognised
is not yet earned by the group due to the conditions set out
in the grant not being met, and as such the recoverability
and recognition of grant income has been deemed a key
audit matter.
Our work in this area included:
• Documenting our understanding and performing a
walkthrough of the information system and key
controls relevant to research and development
expenditure and submission of grant claims;
• Evaluating the effectiveness of the design and
implementation of the key controls in respect of
grant income;
• Substantive testing of receipts relating to grant
income, including accrued income balances
recognised at the year-end;
• Reviewing the grant terms and conditions, together
with the grant claims, and ensuring compliance
with the terms therein;
• Confirming the treatment of grant income is in
accordance with IAS 20, Accounting for
Government Grants and Disclosure of
Government Assistance being the applicable
accounting standard; and
• Reviewing post year-end receipts to ensure
recoverability and completeness of income
recorded in the accounting period.
We are satisfied that grant income is recoverable and has
been recognised appropriately by management.
GENFLOW BIOSCIENCES PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GENFLOW BIOSCIENCES PLC
29
Carrying value of investment (Parent company - see
Note 9 in the financial statements)
Genflow Biosciences Plc is the ultimate parent company of
the group. The carrying value of investment in subsidiary
undertakings as at 31 December 2023 amounted to
£770,187 (2022: £1,058,266).
The value of the investment in subsidiaries is material in the
parent company financial statements. There is a significant
risk the carrying amount of the investment which is subject
to management’s estimation and judgement might not
reflect any possible impairment and as such this has been
deemed to be a key audit matter.
Our work in this area included:
• Considering the valuation of the investments in the
year and evaluating for any potential impairment
indicators;
• Obtaining management’s impairment review and
reviewing the reasonableness of key assumptions
and inputs;
• Assessing progress of the research and
development activities in the underlying
subsidiaries;
• Reviewing the reassignment of the loan in Genflow
Biosciences SRL from Genflow Biosciences Plc to
Genflow Biosciences Inc, including reviewing the
signed agreements and accounting treatment of
this in all the impacted entities; and
• Vouching the increase in the loan in Genflow
Biosciences Inc to bank statements.
Management’s assessment of the carrying value of
investments was concluded as reasonable.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our
auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion
on the group and parent company financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to
read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify
such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the
course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report
to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not
been received from branches not visited by us; or
• the parent company financial statements and the part of the directors’ remuneration report to be audited are not in
agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
GENFLOW BIOSCIENCES PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GENFLOW BIOSCIENCES PLC
30
Responsibilities of directors
As explained more fully in the statement of directors responsibilities, the directors are responsible for the preparation of the
group and parent company financial statements and for being satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing the group’s and
the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company
or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to
which our procedures are capable of detecting irregularities, including fraud is detailed below:
We obtained an understanding of the group and parent company and the sector in which they operate to identify laws and
regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our
understanding in this regard through detailed discussions with management about and potential instances of non-compliance
with laws and regulations both in the UK and in overseas subsidiaries. We also selected a specific audit team based on
experience with auditing entities within this industry of a similar size.
• We determined the principal laws and regulations relevant to the group and parent company in this regard to be
those arising from:
o Main Market Listing Rules;
o The Companies Act 2006;
o UK Employment law;
o The Prospectus Directive;
o Anti Bribery Legislation;
o Market Abuse Directive;
o Financial Services and Market Act;
o Disclosure and Transparency Rules;
o Belgium and US law and company reporting requirements; and
o Local tax and employment law.
• We designed our audit procedures to ensure the audit team considered whether there were any indications of non-
compliance by the group and parent company with those laws and regulations. These procedures included, but were
not limited to:
o Conducting inquiries of management and those charged with governance regarding potential instances of
non-compliance;
o Review of Board minutes and other correspondence from management;
o Review of regulatory news service announcements; and
o Review of legal and professional fees for evidence of any litigation or claims against the group.
These procedures were carried out for all entities within the group to ensure no instances of non-compliance within
the parent company or any of its subsidiaries.
• We also identified the potential risks of material misstatement of the financial statements due to fraud. We
considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management override of
controls, that a potential for management bias exists in relation to the recoverability and recognition of grant income
and the carrying value of investment - parent company. See key audit matters section above.
• As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing
audit procedures which included, but were not limited to: testing over all journals on a risk based approach to identify
any unusual transactions that could be indicative of fraud; reviewing accounting estimates for evidence of bias;
evaluating the business rationale of any significant transactions that are unusual or outside the normal course of
business; and reviewing transactions through the bank statements to identify potentially large or unusual transactions
that do not appear to be in line with our understanding of business operations.
In our audit procedures, we have considered matters of non-compliance with laws and regulations, including fraud at the
group and component levels. We have performed audit procedures on all material components within the Group.
GENFLOW BIOSCIENCES PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GENFLOW BIOSCIENCES PLC
31
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we
will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities.This description forms part of our auditor’s report.
Other matters which we are required to address
We were appointed by the Audit Committee on 21 January 2022 to audit the financial statements for the period ending 31
December 2021 and subsequent financial periods. Our total uninterrupted period of engagement is 3 years, covering the
periods ending 31 December 2021 to 31 December 2023.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent company and
we remain independent of the group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit committee.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone, other than the company and the company's members as a body, for our audit
work, for this report, or for the opinions we have formed.
David Thompson (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
3 May 2024
GENFLOW BIOSCIENCES PLC
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 December 2023
32
Group Company
Notes Year ended 31
December 2023
£
Year ended 31
December 2022
£
Year ended 31
December 2023
£
Year ended 31
December 2022
£
Non-Current Assets
Property, plant & equipment 3,394 2,351 - -
Investments
9 - - 770,187 1,058,266
Total non-current assets 3,394 2,351 770,187 1,058,266
Current Assets
Trade and other receivables
10 384,285 258,885 144,338 153,874
Cash and cash equivalents
11 683,974 2,356,225 247,539 1,639,776
Total current assets 1,068,259 2,615,110 391,877 1,793,650
Total Assets
Current Liabilities
Trade and other payables
12 345,738 250,988 117,014 71,515
Total Liabilities 345,738 250,988 117,014 71,515
Net Assets 725,915 2,366,473 1,045,050 2,780,401
Equity attributable to owners of
the Parent
Share capital 14
Share premium 14
Other reserves 15
Retained earnings
(3,772,225 ) (2,143,520 ) (3,233,602) (1,498,251)
Total Equity 725,915 2,366,473 1,045,050 2,780,401
The Company has taken advantage of the exemption under Section 408 of the Companies Act 2006 from presenting its own
profit and loss account. During the year ended 31 December 2023, the Company made a loss for the year of £1,735,351
(2022: £882,842).
The financial statements were approved and authorised for issue by the Board of Directors on 3 May 2024 and were signed
on its behalf by:
Eric Leire
Chief Executive Officer
The Notes from page 37 form part of these financial statements
GENFLOW BIOSCIENCES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 December 2023
33
Group
Continuing Operations
Notes Year ended 31 December
2023
£
Year ended 31 December
2022
£
Other operating income
Operating Profit 169,854 487,293
Administration expenses 6 (1,798,559 ) (1,822,236 )
Operating Loss (1,628,705 ) (1,334,943 )
Net finance costs - (382 )
Loss before Taxation (1,628,705 ) (1,335,325 )
Income tax 8 - -
Loss for the year from continuing operations (1,628,705 ) (1,335,325 )
Loss attributable to:
- owners of the Parent (1,628,705 ) (1,335,325 )
(1,628,705 ) (1,335,325 )
Other Comprehensive Income:
Items that may be subsequently reclassified to profit or
loss
Exchange differences on translating foreign operations
(11,853 )
Total Comprehensive Income (1,640,558 ) (1,260,167 )
Attributable to:
- owners of the Parent (1,640,558 ) (1,260,167 )
Total Comprehensive Income from continuing operations (1,640,558 ) (1,260,167 )
Earnings per share (pence) from continuing operations
attributable to owners of the Parent – Basic & Diluted
16 (0.557 ) (0.457 )
The Notes from page 37 form part of these financial statements.
GENFLOW BIOSCIENCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the year ended 31 December 2023
34
Attributable to Equity Shareholders- Group
Share
capital
£
Share
premium
£
Other
reserves
£
Retained
losses
£
Total equity
£
As at 1 January 2022 73,371 633,765 156,183 (808,195 ) 55,124
Loss for the period - - - (1,335,325 ) (1,335,325 )
Other comprehensive income
Exchange differences on translating foreign
operations
Total comprehensive income for the period - - 75,158 (1,335,325 ) (1,260,167 )
Transactions with owners
Issue of ordinary shares 14 14,381 3,820,539 - - 3,834,920
Cost of capital – share issue costs 14 - (263,404 ) - - (263,404 )
Total transactions with owners 14,381 3,557,135 - - 3,571,516
As at 31 December 2022 87,752 4,190,900 231,341 (2,143,520 ) 2,366,473
As at 1 January 2023 87,752 4,190,900 231,341 (2,143,520 ) 2,366,473
Loss for the period - - - (1,628,705 ) (1,628,705 )
Other comprehensive income
Exchange differences on translating foreign
operations
Total comprehensive income for the period
(11,853 ) (1,628,705 ) (1,640,558 )
As at 31 December 2023 87,752 4,190,900 219,488 (3,772,225 ) 725,915
The Notes from page 37 form part of these financial statements.
GENFLOW BIOSCIENCES PLC
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the year ended 31 December 2023
35
Attributable to Equity Shareholders- Company
Share capital
£
Share premium
£
Retained losses
£
Total equity
£
As at 18 January 2022 73,371 633,765 (615,409) 91,727
Loss for the period - - (882,842) (882,842)
Other comprehensive income
- - - -
Total comprehensive income for the period - - (882,842) (882,842)
Transactions with owners
Issue of ordinary shares 14 14,381 3,820,539 - 3,834,920
Cost of Capital – share issue costs 14 - (263,404) - (263,404)
Total transactions with owners
14,381 3,557,135 - 3,571,516
As at 31 December 2022
87,752 4,190,900 (1,498,251) 2,780,401
As at 1 January 2023 87,752 4,190,900 (1,498,251) 2,780,401
Loss for the period - - (1,735,351) (1,735,351)
Other comprehensive income
-
-
-
-
Total comprehensive income for the period - - (1,735,351) (1,735,351)
As at 31 December 2023 87,752 4,190,900 (3,233,602) 1,045,050
The Notes from page 37 form part of these financial statements.
GENFLOW BIOSCIENCES PLC
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS
For the year ended 31 December 2023
36
Group Company
Notes Year ended 31
December 2023
Year ended 31
December 2022
Year ended 31
December 2023
Year ended 31
December 2022
Cash flows from operating activities
Loss after taxation
(1,628,705 ) (1,335,325 ) (1,735,351) (882,842)
Adjustments for:
Depreciation & amortisation
Forgiveness of loan - - 1,116,367 -
Share based payments
Increase in trade and other receivables 10 (131,014 ) (206,339 ) 12 (102,371)
Increase/(decrease) in trade and other
payables
12 103,228 29,561 55,023 (137,108)
Foreign exchange - 71,120 - -
Net cash used in operating activities
(1,655,457 ) (1,368,324 ) (563,949) (1,050,321)
Cash flows from investing activities
Purchase of property, plant & equipment
(2,439 ) (2,480 ) - -
Cash paid for acquisitions
Loans granted to subsidiaries
Net cash used in investing activities
(2,439 ) (2,480 ) (828,288) (975,985)
Cash flows from financing activities
Proceeds from issue of shares
14 - 3,762,920 - 3,762,920
Share issue costs
14 - (263,404 ) - (263,404)
Net cash generated from financing
activities
Net (decrease)/increase in cash and cash
equivalents
(1,657,896 ) 2,128,183 (1,392,237) 1,473,210
Cash and cash equivalents at beginning
of year
FX on cash (14,355 ) 4,038 - -
Cash and cash equivalents at end of year 11 683,974 2,356,225 247,539 1,639,776
Non-cash investing and financing
activities
Consultancy fees settle in shares
(72,000 )
-
(72,000)
The Notes from page 37 form part of these financial statements.
GENFLOW BIOSCIENCES PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
37
ACCOUNTING POLICIES
1. General Information
The principal activity of Genflow Biosciences Plc (“the Company”) and its subsidiaries (together “the Group”) is the research
and development of gene therapy targeting the upstream biology of aging.
The Company is incorporated and domiciled in the United Kingdom
commenced trading on this date.
The address of its registered office is 6 Heddon Street, London, W1B 4BT .
2. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies
have been consistently applied to all the periods presented, unless otherwise stated.
2.1 Basis of Preparation of Financial Statements
The financial statements of the Company are prepared in accordance with Part 15 of the Companies Act 2006, which applies
to companies generally.
The Group financial statements have been prepared in accordance with UK-adopted international accounting standards and
the Companies Act 2006. The Group financial statements have been prepared under the historical cost convention.
The financial statements are presented in UK Pounds Sterling rounded to the nearest pound.
The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the Group’s Accounting Policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in Note 4.
2.2 Changes in accounting policy and disclosures
(a) New and amended standards mandatory for the first time for the financial periods beginning on or after 1 January 2023
The International Accounting Standards Board (IASB) issued various amendments and revisions to International Financial
Reporting Standards and IFRIC interpretations. The amendments and revisions were applicable for the year ended 31
December 2023 but did not result in any material changes to the financial statements of the Group or Company.
b) New standards, amendments and interpretations in issue but not yet effective or not yet endorsed and not early adopted
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 16 (Amendments) | Property, plant, and equipment | 1 January 2024 |
| IAS 1 (Amendments) | Classification of Liabilities as Current or Non-Current. | 1 January 2024 |
| IFRS S1* | Disclosure of Sustainability-related Financial | |
| Information | ||
| 1 January 2024 | ||
| IFRS S2* | Climate-related Disclosures | 1 January 2024 |
*
IFRS S1/S2 are subject to local regulation.
The Group is evaluating the impact of the new and amended standards above which are not expected to have a material
impact on future Group financial statements.
GENFLOW BIOSCIENCES PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
38
2.3 Basis of Consolidation
The Group financial statements consolidate the financial statements of Genflow Biosciences Plc and the financial statements
of all of its subsidiary undertakings made up to 31 December 2023.
Subsidiaries are entities over which the Group has control. The Group controls an entity when the Group is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power
over the entity. Where an entity does not have returns, the Group’s power over the investee is assessed as to whether control
is held. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated
from the date that control ceases.
The Group applies merger accounting to account for the acquisition of subsidiaries under common control. The consideration
transferred for the acquisition of a subsidiary is equal to the assets transferred without any restatement to fair value, the
liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The difference that arises
on consolidation is deducted from, or added to, reserves.
Acquisition-related costs are expensed as incurred unless they result from the issuance of shares, in which case they are
offset against the premium on those shares within equity.
Investments in subsidiaries are accounted for at cost less impairment.
Inter-company transactions, balances, income and expenses on transactions between group companies are eliminated.
Profits and losses resulting from intercompany transactions that are recognised in assets are also eliminated.
Where considered appropriate, adjustments are made to the financial information of subsidiaries to bring the accounting
policies used into line with those used by other members of the Group. All intercompany transactions and balances between
Group enterprises are eliminated on consolidation.
2.4 Going Concern
The Group’s business activities, together with the factors likely to affect its future development, performance and position, are
set out in the Chairman’s Report from page 3. In addition, Note 3 to the financial statements includes the Group’s objectives,
policies and processes for managing its capital; its financial risk management objectives; and details of its exposure to credit
and liquidity risk.
Although the Group’s assets are not generating revenue streams, an operating loss has been reported and an operating loss
is expected in the 12 months to 31 December 2024, the Directors believe that the Group will have sufficient funds to meet its
immediate working capital requirements over the next 12 months from the date of approval of these financial statements. As
at 31 December 2023, the Group has cash resources of £683,974 and completed a placing of £715,000 (before expenses)
in April 2024. The Group also received the second half of the initial grant reimbursement from the Wallonia Region, totalling
€340,000 in April, in addition to securing further grant funding of €1.55m, of which €777,273 is due to be received imminently.
Management plan to use these funds to meet the working capital requirements of the Group and to further its research and
development activities. Management has prepared forecast covering 18 month post-year end and believe that current cash
reserves will adequately cover the working capital requirements of the Group in addition to meeting research and development
commitments.
As such, the Directors have a reasonable expectation that the Group has and will have future access to adequate resources
to continue in operational existence for the foreseeable future and, therefore, continue to adopt the going concern basis in
preparing the Annual Report and financial statements.
2.5 Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-
maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Board of Directors that makes strategic decisions.
Segment results, include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
GENFLOW BIOSCIENCES PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
39
2.6 Foreign Currencies
(a) Functional and presentation currency
Items included in the financial statements of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (the ‘functional currency’). The functional currency of the Company is Sterling, the
functional currency of the US subsidiary is US Dollars and the functional currency of the Belgian subsidiary is Euros. The
financial statements are presented in Pounds Sterling, rounded to the nearest pound.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
the transactions or valuation where such items are re-measured. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the Income Statement.
(c) Group companies
The results and financial position of all the Group’s entities (none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency as
follows:
• assets and liabilities for each statement of financial position presented are translated at the closing rate at the date
of that statement of financial position;
• income and expenses for each statement of comprehensive income presented are translated at average exchange
rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the dates of the transactions); and
• all resulting exchange differences are recognised in other comprehensive income where material.
On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of monetary
items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future,
are taken to other comprehensive income. When a foreign operation is sold, such exchange differences are recognised in the
income statement as part of the gain or loss on sale.
2.7 Grant income recognition
Grant income is recognised within other operating income. Grants are recognised as due to the Group when there is
reasonable assurance that:
• the Group will comply with the conditions attached to the payments; and
• the grants or contributions will be received.
Amounts recognised as due to the Group are credited to the Statement of Comprehensive Income if the conditions attaching
to the grant have been met. Monies advanced as grants for which conditions have not been satisfied are carried in the
Balance Sheet as a creditor. Where the conditions to the grant have been met but the grant income is yet to be received, a
debtor will be recognised equal to the submission made, accruing evenly over the period in which the submission relates.
2.8 Research and development
Expenditure on research activities undertaken with the prospect of gaining new scientific or technical knowledge and
understanding is recognised in the income statement as an expense as incurred. Development costs that are directly
attributable to the design and testing of identifiable and unique products controlled by the Group are recognised as intangible
assets where the following criteria are met:
o It is technically feasible to complete the asset so that it will be available for use;
o Management intends to complete the asset and use or sell it;
o There is an ability to use or sell the asset;
o It can be demonstrated how the asset will generate probable future economic benefits;
o Adequate technical, financial and other resources to complete the development and to use or sell the asset are
available; and
o The expenditure attributable to the asset during its development can be reliably measured.
Directly attributable costs that are capitalised as part of the asset include the product development employee costs and an
appropriate portion of relevant overheads. Other development expenditures that do not meet these criteria are recognised as
an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a
subsequent period.
GENFLOW BIOSCIENCES PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
40
2.9 Financial Assets
(a) Classification
The Group classifies its financial assets in the following categories: at amortised cost including trade receivables and other
financial assets at amortised cost, at fair value through other comprehensive income and at fair value through profit or loss,
loans and receivables, and available-for-sale. The classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial assets at initial recognition.
(b) Recognition and measurement
Amortised cost
Trade and other receivables are recognised initially at the amount of consideration that is unconditional, unless they contain
significant financing components, in which case they are recognised at fair value. The group holds the trade and other
receivables with the objective of collecting the contractual cash flows, and so it measures them subsequently at amortised
cost using the effective interest method.
The group classifies its financial assets as at amortised cost only if both of the following criteria are met:
• the asset is held within a business model whose objective is to collect the contractual cash flows; and
• the contractual terms give rise to cash flows that are solely payments of principle and interest.
(c) Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and
all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The
expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to
the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk
since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next
12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective
of the timing of the default (a lifetime ECL).
For trade receivables (not subject to provisional pricing) and other receivables due in less than 12 months, the Group applies
the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group does not track changes in credit
risk, but instead, recognises a loss allowance based on the financial asset’s lifetime ECL at each reporting date.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases,
the Group may also consider a financial asset to be in default when internal or external information indicates that the Group
is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by
the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows
and usually occurs when past due for more than one year and not subject to enforcement activity.
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit impaired. A financial
asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the
financial asset have occurred.
(d) Derecognition
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and
the sum of the consideration received and receivable is recognised in profit or loss. This is the same treatment for a financial
asset measured at fair value through profit and loss.
2.10 Financial Liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial
liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable
transaction costs. The Group’s financial liabilities include trade and other payables.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
GENFLOW BIOSCIENCES PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
41
Trade and other payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are
presented as non-current liabilities.
Trade payables are recognised initially at fair value, and subsequently measured at amortised cost using the effective
interest method.
Derecognition
A financial liability is derecognised when the associated obligation is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the
original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit
or loss and other comprehensive income.
2.11 Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and in hand and are subject to an insignificant risk of changes in value.
2.12 Taxation
Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive
income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity,
respectively.
Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined
using tax rates (and laws) that have been enacted, or substantially enacted, by the end of the reporting year and are expected
to apply when the related deferred income tax asset is realised, or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries,
associates and joint arrangements only to the extent that it is probable the temporary difference will reverse in the future and
there is sufficient taxable profit available against which the temporary difference can be utilised.
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 tax 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.
There has been no tax credit or expense for the period relating to current or deferred tax.
2.13 Share Capital and reserves
Ordinary shares are classified as equity.
Share Premium – the reserve for shares issued above the nominal value. This also includes the cost of share issues that
occurred.
Retained Earnings – the retained earnings reserve includes all current and prior periods retained profit and losses.
Other Reserves – consists of the following;
- Merger Reserve – represents the difference between the value of shares issued by the Company in exchange for
the value of shares acquired in respect of the acquisition of subsidiaries.
- Foreign Currency Translation Reserve - represents the translation differences arising from translating the financial
statement items from functional currency to presentational currency.
2.14 Earnings per share
Basic earnings per share is calculated by dividing:
GENFLOW BIOSCIENCES PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
42
- the profit attributable to owners of the company, excluding any costs of servicing equity other than ordinary shares;
- by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year and excluding treasury shares (note 14).
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
- the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares;
and
- the weighted average number of additional ordinary shares that would have been outstanding, assuming the
conversion of all dilutive potential ordinary shares.
2.15 Operating Leases
Leases of assets under which the short-term exemption under IFRS 16 has been taken and which a significant amount of the
risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Operating lease
payments are charged to the income statement on a straight-line basis over the period of the respective leases. During the
year the Group has one lease agreement in place on a one-month rolling basis, which is exempt from disclosure under IFRS
16.
3. Financial Risk Management
3.1 Financial Risk Factors
The Group’s activities expose it to a variety of financial risks being market risk (including, interest rate risk and currency risk),
credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the Group’s financial performance.
Market Risk
(a) Foreign currency risks
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily
with respect to the Euro against the UK pound. Foreign exchange risk arises from future commercial transactions, recognised
assets and liabilities and net investments in foreign operations. The Parent Company sends funds to the operating subsidiary
to fund research and development and is at risk of being exposed to unfavourable exchange rates. The Company mitigates
this risk by buying Euros when exchange rates are favourable and holding them in a designated foreign currency account.
The Company only issues loan funding to the subsidiary in Euros. The Group negotiates all material contracts for activities in
relation to its subsidiary in Euros. The Directors will continue to assess the effect of movements in exchange rates on the
Group’s financial operations and initiate suitable risk management measures where necessary.
An analysis of the Group’s net monetary assets by functional currency of the underlying companies at the year-end is
as follows:
| Currency | Total | |||
| GBP | ||||
| 2022 | ||||
| EUR | ||||
| 2022 | ||||
| USD | ||||
| 2022 | ||||
| 2022 | ||||
| Currency of net monetary assets | ||||
£ | ||||
| £ | ||||
| £ | £ | |||
| Pound Sterling | ||||
| 1,623,713 | ||||
| - | ||||
| - | ||||
| 1,623,713 | ||||
| Euro | ||||
| 4,059 | ||||
| 716,449 | ||||
| - | ||||
| 720,508 | ||||
| US Dolla | ||||
r | ||||
| 1,992 | - | - | 1,992 | |
| Australian Dollar | ||||
| 10,012 | - | - | 10,012 | |
| At 31 December 2022 | ||||
| 1,639,776 | 716,449 | - | 2,356,225 |
GENFLOW BIOSCIENCES PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
43
| Currency | Total | |||
| GBP | ||||
| 2023 | ||||
| EU | ||||
R | ||||
| 2023 | ||||
| USD | ||||
| 2023 | ||||
| 2023 | ||||
| Currency of net monetary assets | ||||
| £ | ||||
£ | ||||
| £ | £ | |||
| Pound Sterling | ||||
| 244,487 | - | |||
| - | ||||
| 244,487 | ||||
| Euro | ||||
| 370 | 436,435 | |||
| - | ||||
| 436,805 | ||||
| US Dollar | ||||
| 2,682 | - | - | 2,682 | |
| Australian Dollar | ||||
| - | - | - | - | |
| At 31 December 2023 | ||||
| 247,539 | 436,435 | - | 683,974 |
The table above indicates that the Company’s primary exposure is to exchange rate movements between UK Pound
Sterling and the Euro. The table below shows the impact of changes in exchange rates on the result and financial
position of the Company.
| 2023 | ||
| £ | ||
| 2022 | ||
| £ | ||
| Pound Sterling 10% weakening against Euro | (43,681) | (72,051) |
| Pound Sterling 10% strengthening against Euro | 43,681 | 72,051 |
| Pound Sterling 20% weakening against Euro | (87,361) | (144,102) |
| Pound Sterling 20% strengthening against Euro | 87,361 | 144,102 |
(b) Interest rate risk
As the Group has no borrowings, it is not exposed to interest rate risk on financial liabilities. The Group’s interest rate risk
arises from its cash held on short-term deposit, which is not significant.
Credit Risk
Credit risk arises from cash and cash equivalents as well as outstanding receivables. The Group does not currently generate
sales and any receivable balances are granted after careful assessment by Management to ensure there is a high chance of
recoverability. Management does not expect any losses from non-performance of these receivables.
The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk.
Liquidity Risk
The Group’s continued future operations depend on the ability to raise sufficient working capital through the issue of equity
share capital or debt. The Directors are reasonably confident that adequate funding will be forthcoming with which to finance
operations. Controls over expenditure are carefully managed. See note 2.4 for further details on going concern and liquidity.
3.2 Capital Risk Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, in order
to provide returns for shareholders and to enable the Group to continue its research and development activities. The Group
has no debt at 31 December 2023 and defines capital based on the total equity of the Company. The Group monitors its level
of cash resources available against future planned operational activities and the Company may issue new shares in order to
raise further funds from time to time.
GENFLOW BIOSCIENCES PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
44
4. Critical Accounting Estimates and Judgements
The preparation of the Group financial statements in conformity with IFRSs requires Management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amount of expenses during the year. Actual results may vary from the
estimates used to produce these financial statements.
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.
The significant items subject to such estimates and assumptions are as follows;
Research and development
IAS 38 Intangible Assets requires management to differentiate between research and the development phase of R&D
activities and their related costs. In accordance with IAS 38, an intangible asset arising from development shall be recognised
if, and only, if, an entity can demonstrate certain criteria. The Board continually monitor its activities against the prescribed
criteria to determine the point in which the Group would enter the development phase of its activities. The entity is currently
in the phases of formulation, design and evaluation of its product and therefore management are confident that the entity is
in the research phase. As a result, any expenditure arising from R&D activities are expensed in the Statement of
Comprehensive Income.
Intercompany loans
In the prior year management assessed the recovery profile of the Parent Company loans granted to subsidiaries and noted
the research and development timetable would mean that repayment of the amounts loaned would not commence in the short
to medium term and accordingly the loans were considered to not be repayable and have been classified as an investment
in subsidiary. Management performed an assessment over whether the investment in Genflow US of £684,860 and loans to
Genflow BE of £85,326 were impaired. The determination of the assumptions is subjective and requires the exercise of
considerable judgement about the outcome of research and development activity, probability of technical and regulatory
success, amount and timing of projected future cash flow or changes in market conditions. Any changes in key assumptions
could materially affect whether an impairment exists. Several factors such as Genflow BE receiving positive feedback from
regulatory agencies and successful patent applications give management comfort that no impairment indicators exist.
Impairment of receivables
Included in other receivables is an amount of £303,791 (2022: £92,535) as at 31 December 2023 in respect of grant income.
As at 31 December 2023, the Directors were confident that the amount will be recovered in full and therefore did not
recognised any impairment to the carrying value of this amount. The full amount was received in April 2024.
5. Segmental Information
As at 31 December 2023, the Group operates in two geographical areas, the UK and Belgium. The Parent Company operates
in one geographical area, the UK. Activities in the UK are mainly administrative in nature whilst activities in Belgium relate to
research and development. The US entity is dormant. The reports used by the chief operating decision maker are based on
these geographical segments.
| 2023 | Belgium | ||
| £ | |||
| UK | |||
| £ | |||
| Total | |||
| £ | |||
| Other operating income | 169,854 | - | 169,854 |
| Administrative expenses | (1,084,700) | (713,859) | (1,798,559) |
| Loss from operations per reportable segment | (914,845) | (713,860) | (1,628,705) |
| Reportable segment assets | 771,258 | 297,001 | 1,068,259 |
| Reportable segment liabilities | 228,724 | 117,014 | 345,738 |
GENFLOW BIOSCIENCES PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
45
| 2022 | Belgium | ||
| £ | |||
| UK | |||
| £ | |||
| Total | |||
| £ | |||
| Other operating income | 487,293 | - | 487,293 |
| Administrative expenses | (887,130) | (935,106) | (1,822,236) |
| Other losses | - | - | - |
| Loss from operations per reportable segment | (399,837) | (935,106) | (1,334,943) |
| Reportable segment assets | 821,460 | 1,793,650 | 2,615,110 |
| Reportable segment liabilities | 179,473 | 71,515 | 250,988 |
6. Expenses by Nature
| Group | ||
| 31 December | ||
| 2023 | ||
| £ | ||
| 31 December | ||
| 2022 | ||
| £ | ||
| Directors’ fees | 362,312 | 349,384 |
| Directors’ pensions | 1,093 | 1,782 |
| Directors’ social security contributions | 14,945 | 9,329 |
| Fees payable to the Company’s auditors for the audit of the Parent Company and | ||
| group financial statements | ||
| 53,285 | 41,790 | |
| Professional, legal and consulting fees | 215,971 | 381,534 |
| PR and marketing | 106,819 | 165,889 |
| Accounting related services | 7,839 | 7,245 |
| Insurance | 22,476 | 33,423 |
| Office and administrative expenses | 18,897 | 4,496 |
| IT and software services | 5,828 | 2,249 |
| Travel and entertainment | 23,830 | 14,193 |
| Research and development costs | 960,314 | 724,465 |
| Share based payments | - | 72,000 |
| Other expenses | 3,916 | 14,327 |
| Depreciation | 1,034 | 130 |
| Total administrative expenses | 1,798,559 | 1,822,236 |
7. Employees
The average monthly number of employees, including Directors, during the year was 5 (2022: 5). There were no employees
during the year other than the Directors. See the Remuneration and Nomination Committee Report on page 24 for details of
remuneration paid to Directors serving during the year.
GENFLOW BIOSCIENCES PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
46
8. Taxation
| Group | Company | |||
| Tax recognised in profit or loss | 2023 | |||
| £ | ||||
| 2022 | ||||
| £ | ||||
| 2023 | ||||
| £ | ||||
| 2022 | ||||
| £ | ||||
| Current tax | - | - | - | - |
| Deferred tax | - | - | - | - |
| Total tax charge in the Statement Of | ||||
| Comprehensive Income | ||||
| - | - | - | - |
The tax on the Group’s loss differs from the theoretical amount that would arise using the weighted average tax rate
applicable to the losses of the consolidated entities as follows:
| Group | 2023 | |
| £ | ||
| 2022 | ||
| £ | ||
| Loss before tax | (1,628,705) | (1,335,325) |
| Tax at the weighted average rate of 23.5% (Company: 19%) | (382,746) | (272,405) |
| Expenditure not deductible for tax purposes | ||
| 40,754 | 25,343 | |
| Net tax effect of losses carried forward on which no deferred tax asset is | ||
| recognised | ||
| 341,992 | 247,062 | |
| Income tax for the year | - | - |
The weighted average applicable tax rate of 23.5% used is a combination of the 23.5% standard rate of corporation tax in the
UK (UK corporation tax changed from 19% to 25% in the period), 21% US corporation tax and 25% Belgian corporation tax.
The Group has accumulated tax losses of approximately £3,521,598 (2022: £2,066,314) and the Company had accumulated
tax losses of approximately £1,951,009 (2022: £1,384,255) available to carry forward against future taxable profits. A deferred
tax asset has not been recognised because of uncertainty over future taxable profits against which the losses may be utilized.
9. Investment in Subsidiary Undertakings
| Company | ||
| 2023 | ||
| £ | ||
| 2022 | ||
| £ | ||
| Shares in subsidiary undertakings | ||
| At beginning of the period | 1,058,266 | 68,131 |
| Additions to investments | - | - |
| Additions to loans | 763,346 | - |
| Loan reassignment | (1,116,367) | - |
| Loans receivable | 64,942 | 990,135 |
| At period end | ||
| 770,187 | 1,058,266 |
GENFLOW BIOSCIENCES PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
47
During the year, £143,428 (2022: £990,135) was loaned by the Company to Genflow Biosciences Srl and £Nil (2022: £Nil)
was repaid. During the year, £1,116,367 owing from Genflow Biosciences Srl was reassigned to Genflow Biosciences Inc in
return for cash consideration of £1. £64,942 was owing to the Company by Genflow Biosciences Srl at the year end.
Also during the year, £684,860 was loaned by the Company to Genflow Biosciences Inc.
The additions and resignment to the loans owing to the Company by Genflow Biosciences Inc at the year-end is in respect of
working capital and is not expected to be repaid. As such, it forms part of the amount invested into Genflow Biosciences Inc
by the Company.
Investments in Group undertakings are stated at cost less impairment.
Details of subsidiaries at 31 December 2023 are as follows:
| Name of subsidiary | |||||
| Country of | |||||
| incorporation | |||||
| Share capital | |||||
| held by Group | |||||
| Share capital | |||||
| held by | |||||
| Company | |||||
| Principal | |||||
| activities | |||||
| Registered office address | |||||
| Genflow | |||||
| Biosciences Inc. | |||||
| United | |||||
| States | |||||
| £20,383 | 100% | Dormant | |||
| Harvard Square, One | |||||
| Miffin Place #400, Cambr | |||||
| idge, MA 02138 | |||||
| Genflow | |||||
| Biosciences SRL | |||||
| Belgium | £684,183 | 100% | |||
| Research and | |||||
| development | |||||
| Rue Auguste Piccard 48 | |||||
| 6041 Gosselies |
10. Trade and Other Receivables
| Group | Company | |||
| 2023 | ||||
| £ | ||||
| 2022 | ||||
| £ | ||||
| 2023 | ||||
| £ | ||||
| 2022 | ||||
| £ | ||||
| VAT receivable | 36,278 | 32,612 | 6,337 | 15,861 |
| Prepayments | 41,041 | 131,414 | 41,041 | 38,879 |
| Other receivables | 306,966 | 94,859 | 96,960 | 99,134 |
| 384,285 | 258,885 | 144,338 | 153,874 |
Included in other receivables is £303,791 due from the Wallonia Region of Southern Belgium in respect of an R&D grant
awarded to Genflow Biosciences SRL. The balance was received in full post year end.
The Company is entitled to claim up to 70% of qualifying expenditure which has been spent on R&D activities. To date, the
Company has received £332,527. Grant income of £169,854 (2022 - £487,293) has been recognised within the Consolidated
Statement of Other Comprehensive Income.
Trade and other receivables are all due within one year. The fair value of all receivables is the same as their carrying values
stated above. These assets, excluding prepayments, are the only form of financial asset within the Group, together with cash
and cash equivalents. There are no trade receivables therefore an ageing analysis has not been provided.
The carrying amounts of the Group‘s trade and other receivables are denominated in the following currencies:
| Group | Company | |||
| 2023 | ||||
| £ | ||||
| 2022 | ||||
| £ | ||||
| 2023 | ||||
| £ | ||||
| 2022 | ||||
| £ | ||||
| UK Pounds | 49,462 | 153,874 | 144,338 | 153,874 |
| Euros | 333,881 | 103,949 | - | - |
| US Dollars | 942 | 1,062 | - | - |
| Current receivables | ||||
| 384,285 | 258,885 | 144,338 | 153,874 |
GENFLOW BIOSCIENCES PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
48
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above.
The Group does not hold any collateral as security. All trade and other receivables are considered fully recoverable and
performing.
11. Cash and Cash Equivalents
| Group | Company | |||
| 2023 | ||||
| £ | ||||
| 2022 | ||||
| £ | ||||
| 2023 | ||||
| £ | ||||
| 2022 | ||||
| £ | ||||
| Cash at bank and in hand | 683,974 | 2,356,225 | 247,539 | 1,639.776 |
The Group’s cash is held with facilities with an A credit rating
.
The carrying amounts of the Group and Company’s cash and cash equivalents are denominated in the following currencies:
| Group | Company | |||
| 2023 | ||||
| £ | ||||
| 2022 | ||||
| £ | ||||
| 2023 | ||||
| £ | ||||
| 2022 | ||||
| £ | ||||
| UK Pounds | 244,487 | 1,623,713 | 246,744 | 1,623,713 |
| Euros | 436,805 | 720,508 | 370 | 4,059 |
| US Dollars | 2,682 | 1,992 | 425 | 1,992 |
| Australian Dollars | - | 10,012 | - | 10,012 |
| Cash at bank and in hand | ||||
| 683,974 | 2,356,225 | 247,539 | 1,639,776 |
12. Trade and Other Payables
| Group | Company | |||
| 2023 | ||||
| £ | ||||
| 2022 | ||||
| £ | ||||
| 2023 | ||||
| £ | ||||
| 2022 | ||||
| £ | ||||
| Trade payables | 254,695 | 83,590 | 52,480 | 2,053 |
| Other payables | ||||
| 31,029 | 8,799 | 9,717 | 4,217 | |
| Accrued expenses | ||||
| 60,014 | 158,599 | 54,817 | 65,245 | |
| 345,738 | 250,988 | 117,014 | 71,515 |
All trade and other payables are due for payment within twelve months of the year end. Trade payables are settled within
normal commercial terms, usually between 30-60 days.
The carrying amounts of the Group and Company’s trade and other payables are denominated in the following currencies:
| Group | Company | |||
| 2023 | ||||
| £ | ||||
| 2022 | ||||
| £ | ||||
| 2023 | ||||
| £ | ||||
| 2022 | ||||
| £ | ||||
| UK Pounds | 117,014 | 69,270 | 117,014 | 71,515 |
| Euros | 228,724 | 144,053 | - | - |
| Current payables | ||||
| 345,738 | 213,323 | 117,014 | 71,515 |
GENFLOW BIOSCIENCES PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
49
13. Financial Instruments by Category
| 31 December 2023 | 31 December 2022 | |||
| Group | ||||
| Assets per Statement of Financial Position | ||||
| At amortised | ||||
| cost | Total | |||
| At amortised | ||||
| cost | Total | |||
| Trade and other receivables (excluding | ||||
| prepayments) | ||||
| 343,244 | 371,981 | 127,471 | 127,471 | |
| Cash and cash equivalents | ||||
| 683,974 | 683,974 | 2,356,225 | 2,356,225 | |
| Total | ||||
| 1,027,218 | 1,055,955 | 2,483,696 | 2,483,696 | |
| Liabilities per Statement of Financial Position | ||||
| Trade and other payables | 345,738 | 345,738 | ||
| 250,988 | 250,988 | |||
| Total | 345,738 | 345,738 | ||
| 250,988 | 250,988 |
| 31 December 2023 | 31 December 2022 | |||
| Company | ||||
| Assets per Statement of Financial Position | ||||
| At amortised | ||||
| cost | ||||
| Total | ||||
| At amortised | ||||
| cost | ||||
| Total | ||||
| Trade and other receivables (excluding | ||||
| prepayments) | ||||
| 103,297 | 103,297 | 114,995 | 114,995 | |
| Cash and cash equivalents | ||||
| 247,539 | 247,539 | 1,639,776 | 1,639,776 | |
| Total | ||||
| 350,836 | 350,836 | 1,754,771 | 1,754,771 | |
| Liabilities per Statement of Financial Position | ||||
| Trade and other payables | 117,014 | 117,014 | ||
| 71,515 | 71,515 | |||
| Total | 117,014 | 117,014 | ||
| 71,515 | 71,515 |
GENFLOW BIOSCIENCES PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
50
14. Share Capital and Share Premium
Issued share capital
| Company | ||||
| Number of | ||||
| shares | ||||
| Ordinary | ||||
| shares | ||||
| £ | ||||
| Share | ||||
| premium | ||||
| £ | ||||
| Total | ||||
| £ | ||||
| At 1 January 2022 | 244,570,118 | 73,371 | 633,765 | 707,136 |
| Issue of new shares – 17 January 2022 | 47,036,500 | 14,111 | 3,748,809 | 3,762,920 |
| Issue of new shares – 17 January 2022 | 900,000 | 270 | 71,730 | 72,000 |
| Cost of Capital – 15 February 2022 | - | - | (263,404) | (263,404) |
| At 31 December 2022 | 292,506,618 | 87,752 | 4,190,900 | 4,278,652 |
| At 1 January 2023 | 292,506,618 | 87,752 | 4,190,900 | 4,278,652 |
| At 31 December 2023 | 292,506,618 | 87,752 | 4,190,900 | 4,278,652 |
15. Other reserves
| Group | |||
| Foreign currency | |||
| translation differences | |||
| Merger reserve | |||
| Total | |||
| £ | £ | £ | |
| At 31 December 2021 | (14,065) | 170,248 | 156,183 |
| Currency translation differences | 75,158 | - | 75,158 |
| Acquisition of subsidiaries | - | - | - |
| As at 31 December 2022 | |||
| 61,093 | 170,248 | 231,341 | |
| Currency translation differences | (11,853) | - | (11,853) |
| Acquisition of subsidiaries | - | - | - |
| As at 31 December 2023 | 49,240 | 170,248 | 219,488 |
16. Earnings per Share
The calculation of the total basic loss per share of 0.557 pence (2022: 0.457 pence) is based on the loss attributable to equity
owners of the group of £1,628,705 (2022: £1,335,325) and on the weighted average number of ordinary shares of 292,506,618
(2022: 292,506,618) in issue during the year.
In accordance with IAS 33, basic and diluted earnings per share are identical as the effect of the exercise of share options or
warrants would be to decrease the loss per share.
17. Commitments
During the period, Genflow Biosciences Srl entered into various collaboration agreements which contain commitments and
milestone payments, as follows;
- Organips: Amounts payable of €75.000 in relation to the study of cent SIRT9 in liver organoids (MASH and Werner).
- IVEX Labs; Amounts have been payable under the contact in place with IVEX Labs in connection with the study of
cloning mouse Sirt6 and human SIRT6 (both wild-type and centenarian variants) into AAV2 (“Task1”). A final
payment of €50,000 is payable on completion of the research, receipt of reports for Tasks 1-2, a final report and
other deliverables due.
- CSZBio; €10,240 payable per month over two years from June 2021.
GENFLOW BIOSCIENCES PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
51
18. Related Party Transactions
Group
During the year, £143,427 (2022: £990,135) was loaned by the Company to Genflow Biosciences Srl and £Nil (2022: £Nil)
was repaid. During the year, £1,116,367 owing from Genflow Biosciences Srl was reassigned to Genflow Biosciences Inc in
return for cash consideration of £1. At the period end, £64,944 is owing from Genflow Biosciences Srl.
Also during the year, £684,860 was loaned by the Company to Genflow Biosciences Inc.
Company
During the period, the Company charged Genflow Biosciences Srl management fees totalling £94,876 in respect of
administration costs and salaries.
19. Ultimate Controlling Party
The Directors believe there to be no ultimate controlling party.
20. Events after the Reporting Date
On 18 January 2024, the Group was awarded two non-diluting and non-reimbursable research grants by the Government of
Wallonia in Belgium which will total €1.55m.
On 4 April 2024, the Company raised £715,000 (before expenses) by way of a placing and subscription of 57,200,000 new
Ordinary Shares of 1.25 pence each.