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Registered number: 10017462
Mavalon Therapeutics Limited
Financial statements
for the year ended 28 February 2018
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Mavalon Therapeutics Limited
Registered number: 10017462
Balance sheet
as at 28 February 2018
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 29 November 2018.
The notes on pages 3 to 13 form part of these financial statements.
Page 1
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Mavalon Therapeutics Limited
Statement of changes in equity
for the year ended 28 February 2018
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At 1 March 2017 (as previously stated)
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At 1 March 2017 (as restated)
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Shares issued during the year and additional share premium received
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Statement of changes in equity
for the year ended 28 February 2017
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Shares issued during the period
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At 28 February 2017 (as restated)
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The notes on pages 3 to 13 form part of these financial statements.
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Page 2
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Mavalon Therapeutics Limited
Notes to the financial statements
for the year ended 28 February 2018
Mavalon Therapeutics Limited ("the company") is a private company limited by shares and is incorporated in England with the registration number 10017462. The address of the registered office is 24 Chiswell Street, London, England, EC1Y 4YX.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 4).
The financial statements are rounded to the nearest pound.
The following principal accounting policies have been applied:
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Exemption from preparing consolidated financial statements
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The company, and the group headed by it, qualify as small as set out in section 383 of the Companies Act 2006 and the parent and group are considered eligible for the exemption to prepare consolidated accounts.
These financial statements are therefore the company’s separate financial statements, and present information about the company as an individual undertaking and not about its group.
The company is engaged in research and development activities and is reliant upon funding from its investors to meet its operational and working capital needs. The company's forecasts and projections, taking account of expected expenditure and future investment, show that the company should be able to continue these activities within the level of its available facilities.
Uncertainties exist regarding the availability of future investment, which is subject to approval from the company's investors. The directors expect a resolution to be achieved between 3 to 6 months from the date of approval of these financial statements. Nevertheless, after making enquiries and considering these uncertainties, the directors have a reasonable expectation that the company will have adequate resources to continue in operational existance for a period of at least 12 months from the date of approval of these financial statements.
Consequently the going concern basis has continued to be adopted in preparing these financial statements.
Page 3
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Mavalon Therapeutics Limited
Notes to the financial statements
for the year ended 28 February 2018
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The company's functional and presentational currency is pounds sterling.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the statement of comprehensive income within 'other operating income'.
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Page 4
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Mavalon Therapeutics Limited
Notes to the financial statements
for the year ended 28 February 2018
2.Accounting policies (continued)
Tax is recognised in the statement of comprehensive income, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Page 5
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Mavalon Therapeutics Limited
Notes to the financial statements
for the year ended 28 February 2018
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the statement of comprehensive income.
Investments in subsidiaries are measured at cost less accumulated impairment.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Page 6
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Mavalon Therapeutics Limited
Notes to the financial statements
for the year ended 28 February 2018
2.Accounting policies (continued)
The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in the case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the statement of comprehensive income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The auditor's report on the financial statements for the year ended 28 February 2018 was unqualified.
The audit report was signed on 29 November 2018 by Scott Miles FCCA (senior statutory auditor) on behalf of Kreston Reeves LLP.
Page 7
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Mavalon Therapeutics Limited
Notes to the financial statements
for the year ended 28 February 2018
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Judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of the financial statements requires the directors to make judgements, estimates and assumptions that can affect the amounts reported for assets and liabilities, and the results for the year. The nature of estimation is such though that actual outcomes could differ significantly from those estimates.
The following judgements have had the most significant impact on amounts recognised in the financial statements:
Going concern
In the judgement of the directors it is appropriate to prepare the financial statements in accordance with the going concern basis of accounting. See note 2.3 for further details.
Share-based payments
The company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The estimation of fair value requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield. See note 13 for further details.
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The average monthly number of employees, including directors, during the year was 2 (2017 - 2).
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Page 8
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Mavalon Therapeutics Limited
Notes to the financial statements
for the year ended 28 February 2018
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At 1 March 2017 (as previously stated)
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At 1 March 2017 (as restated)
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At 1 March 2017 (as previously stated)
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At 1 March 2017 (as restated)
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At 28 February 2017 (as restated)
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During the year additional information was made available to the directors, which has given reason to restate their valuation of patents acquired during the prior period. The loss for the prior period has accordingly been increased by £15,143, to represent the additional amortisation on the valuation uplift.
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Page 9
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Mavalon Therapeutics Limited
Notes to the financial statements
for the year ended 28 February 2018
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Charge for the year on owned assets
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Page 10
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Mavalon Therapeutics Limited
Notes to the financial statements
for the year ended 28 February 2018
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Investments in subsidiary companies
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The following were subsidiary undertakings of the company:
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Mavalon Therapeutics France SAS
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The aggregate of the share capital and reserves as at 28 February 2018 and of the profit or loss for the year ended on that date for the subsidiary undertakings were as follows:
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Aggregate of share capital and reserves
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Mavalon Therapeutics France SAS
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Prepayments and accrued income
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Page 11
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Mavalon Therapeutics Limited
Notes to the financial statements
for the year ended 28 February 2018
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Creditors: Amounts falling due within one year
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Accruals and deferred income
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Allotted, called up and fully paid
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600,000 (2017 - 600,000) Ordinary shares of 0.01 each
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138,000 (2017 - 22,000) B Ordinary shares of 0.01 each
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1,200,000 (2017 - 1,200,000) Series A shares of 0.01 each
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i) On 29 June 2017, 100,000 B Ordinary shares with an aggregate nominal value of €1,000 were allotted and issued for a total consideration of €1,000 (£881).
ii) On 21 September 2017, 16,000 B Ordinary shares with an aggregate nominal value of €160 were allotted and issued for a total consideration of €160 (£141).
iii) In accordance with the terms of a subscription and shareholders' agreement, on 8 February 2018 the company received additional share premium of €154,786 (£137,173) in respect of 1,200,000 Series A shares that were issued in a previous period.
iv) Following the year end, 81,250 B Ordinary shares of €0.01 each have been re-designated as deferred shares of €0.01 each.
Share premium account
This reserve records the amount above the nominal value received for shares issued by the company. Share premium may only be utilised to write-off any expenses incurred or commissions paid on the issue of those shares, or to pay up new shares to be allotted to members as fully paid bonus shares.
Profit and loss account
This reserve comprises all current period retained profits and losses after deducting any distributions made to the company's shareholders.
Page 12
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Mavalon Therapeutics Limited
Notes to the financial statements
for the year ended 28 February 2018
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The company operates a share option scheme for consultants and directors who receive part of their remuneration in the form of share based payments.
During the prior period options were granted to 3 individuals to subscribe for a total of 122,000 B Ordinary shares in the company at an exercise price of €0.01 per share. The cost of these options was £NIL. As at 28 February 2017, 100,000 options remained outstanding. In the current year all outstanding options were exercised and no options were in issue as at 28 February 2018.
During the year no further options were issued, forfeited, expired or lapsed.
There were no performance related conditions attached to the options.
The share options have not been accounted for in accordance with the principals of FRS102 as the directors do not consider this to have a material impact on the financial statements.
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Related party transactions
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The company is exempt from disclosing related party transactions with other companies that are wholly owned within the group.
All other related party transactions during the current and prior periods, including key management personnel compensation, were made under normal market conditions.
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The company is a 61% subsidiary of Medicxi Ventures I L.P., a limited partnership registered in Jersey. The registered office of Medicxi Ventures I L.P. is 44 Esplanade, St. Helier, JE4 9WG, Jersey.
Medicxi Ventures I L.P. meets the definition of an Investment Entity in accordance with IFRS 10 and is not required to consolidate its investments, of which the company is a investment.
Page 13
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