Half-year Report

Genflow Biosciences PLC

30 September 2024

 

PRESS RELEASE

30 September 2024

Genflow Biosciences Plc

("Genflow" or "the Company")

HALF YEAR RESULTS

Genflow (LSE: GENF) is pleased to announce its half year results for the six-month period ended 30 June 2024.

Chairman's Statement

It is with pleasure that I take this opportunity to update shareholders of Genflow Biosciences Plc ("Genflow" or the "Company") on the Company's performance during the first six months of 2024.

Over the six months to 30 June 2024, the Company has made strides in its principal longevity programs: MASH (Metabolic Dysfunction-Associated Steatohepatitis) and Werner Syndrome.

In June, we updated shareholders on the momentum created with respect to our pre-clinical programs in MASH, and the guidance expected to be received from the FDA in the future. This guidance, which we anticipate receiving in the future, is expected to come through the FDA's Initial Targeted Engagement for Regulatory Advice on CBER Products (INTERACT), as a result of the Company submitting a comprehensive briefing package conducted with our lead drug candidate, GF-1002, for the treatment of MASH. In the meantime, the FDA has encouraged Genflow to proceed with its plans to identify appropriate animal models through pilot proof-of-concept ("POC") studies. Specifically, we have established a functional 3-D organoids of liver using cells from Werner patients.  This organoid testing helps reduce the need for animal models in our scientific research. Organoids are miniature, lab-grown versions of human organs or tissues that mimic the structure and function of their real counterparts. By using these organoids, we can model human Werner Syndrome and better test response of our SIRT6 based gene therapy in a more human-relevant environment, rather than relying on unreliable animal models.

Additionally, we have initiated a feasibility study with a Contract Development Manufacturing Organization (CDMO), Exothera S.A, to assess the ability to produce its future MASH clinical lot in accordance with Good Manufacturing Practices (GMP). We are also in the process of selecting Contract Research Organizations (CROs) to conduct our upcoming dog clinical trial, aimed at studying our simplified Nake DNA version of our Centenarian SIRT6 drug candidate, GF-1004. We will provide updates in relation to our veterinary study in due course.

Over the period, we have also been working on two exciting collaborations supported by non-diluting and non-reimbursable research grants from the Government of Wallonia in Belgium, as follows; 

·      Sarcopenia research program with Revatis SA - focusing on the development of muscle progenitor cells which will be loaded with Genflow's proprietary SIRT6 for the prevention and treatment of sarcopenia, the age-related loss of muscle mass and function. Genflow aims to counteract the detrimental effects of aging on muscle tissue with our sarcopenia program, which holds potential for significantly improving the quality of life for older adults affected by muscle loss and weakness.

·      Exosome-mRNA project with EXO Biologics - which aims to deliver a therapeutic product composed of exosomes encapsulating an AAV or mRNA encoding SIRT6. The exosome therapy will be designed to target liver fibrosis (MASH) and Werner Syndrome, potentially leading to groundbreaking treatments for both diseases.

During the period, the Company has received grant funding of totalling €777,281 in respect of these projects, with further financial support committed in the first half of 2025.

In addition, Genflow Biosciences SRL, received €350,000 in April 2024, from the regional government of Wallonia - Belgium Service Public de Wallonie, representing the second tranche of this awarded grant recognised in the previous year, 2023.

Further strengthening the Company's financial position and increasing its institutional investor base, the Company completed a placing and subscription to which raised £715,000 (before expenses) during the period. We were privileged to have Premier Miton, a well-known UK institution, participate in this fundraise.

Financial Overview

As of 30 June 2024, the Group had cash reserves of £1,139,859 (31 December 2023: £683,974) which has been derived from equity fundraising of £663,600 (net of expenses) and the receipt of research and development grants of £664,219 (€777,281) and £299,145 (€350,000) The Company remains debt free.

Administration expenses for 30 June 2024 totalled £1,316,368 (30 June 2023: £815,477), which primarily consisted of research and development costs of £938,109 (30 June 2023: £415,157), legal and professional fees totalling £90,654 (30 June 2023: £103,366) and Directors' fees of £178,656 (30 June 2023: £178,783).

The significant jump in research and development costs for 2024 is in relation to the advancement of testing, which has transitioned to the in vivo stage, which is inherently more costly.

Other Comprehensive Income was charged with a translation gain of £8,652 upon converting the Subsidiary's results for the period to GBP.

Future

On behalf of the Board, I thank you for your continued support. Our commitment to pioneering therapeutic solutions for longevity has been strengthened by the support of our collaborative partners and promising feedback from the FDA during the six-months to 30 June 2024. This encouragement reinforces our commitment to developing effective therapeutic solutions for age-related diseases. We remain focused on our mission to improve healthspan, and I look forward to providing you with further updates as we progress through our work programs, including clinical dog trials.

Tamara Joseph

Chairman

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 June 2024

	Note	Unaudited 6 Months ended 30 June 2024	Audited 12 Months ended 31 December 2023	Unaudited 6 Months ended 30 June 2023
Non-current assets
Property, plant & equipment		3,456	3,394	3,991
Total non-current assets		3,456	3,394	3,991
Current assets
Trade and other receivables	6	207,791	384,285	400,891
Cash and cash equivalents		1,139,859	683,974	1,507,437
Total current assets		1,347,650	1,068,259	1,908,328
Total assets		1,351,106	1,071,653	1,912,319
Current liabilities
Trade and other payables	7	492,761	345,738	194,134
Total current liabilities		492,761	345,738	194,134
Total liabilities		492,761	345,738	194,134
Net Assets		858,345	725,915	1,718,185
Equity
Share capital	8	104,912	87,752	87,752
Share premium	8	4,837,340	4,190,900	4,190,900
Other reserves	9	212,577	219,488	204,592
Retained earnings		(4,296,484)	(3,772,225)	(2,765,059)
Total equity		858,345	725,915	1,718,185

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2024

						Notes		Unaudited 6 Months ended 30 June 2024			Audited 12 Months ended 31 December 2023		Unaudited 6 Months ended 30 June 2023
Other operating income								792,109			169,854		194,068
Administrative expenses						4		(1,316,368)			(1,798,559)		(815,477)
Operating loss								(524,259)			(1,628,705)		(621,409)
Finance costs								-			-		(130)
Loss before tax								(524,259)			(1,628,705)		(621,539)
Tax expense								-			-		-
Loss for the period / year attributable to owners of the parent								(524,259)			(1,628,705)		(621,539)
Other Comprehensive loss:
Items that could be reclassified to profit or loss
Exchange differences on translation of foreign operations								(8,652)			(11,853)		(26,749)
Total comprehensive loss for the period / year attributable to owners of the parent								(532,911)			(1,640,558)		(648,288)
Loss per share (pence) from continuing operations attributable to owners of the Parent - Basic & Diluted						5		(0.165)			(0.557)		(0.210)

                  CONSOLIDATED STATEMENT OF CASH FLOWS

                  FOR THE SIX MONTHS ENDED 30 JUNE 2024

			Unaudited 6 Months ended 30 June 2024		Audited 12 Months ended 31 December 2023	Unaudited 6 months ended 30 June 2023
Cash flows used in operating activities:
Loss after taxation			(524,259)		(1,628,705)	(621,539)
Adjustments for:
Depreciation & amortisation			605		1,034	413
Share based payments			1,741		-	-
Decrease/(increase) in trade and other receivables			168,964		(131,014)	(142,229)
Increase/(decrease) in trade and other payables			154,185		103,228	(107,585)
Foreign exchange			-		-	26,749
Net cash outflow from operating activities			(198,764)		(1,655,457)	(844,191)
Cash flow used in investing activities:
Purchase of property, plant & equipment			(743)		(2,439)	(4,528)
Net cash used in investing activities			(743)		(2,439)	(4,528)
Cash flow from financing activities:
Proceeds from issue of shares			715,000		-	-
Cost of share issue			(51,400)		-	-
Net cash generated from financing activities			663,600		-	-
Net increase/(decrease) in cash and cash equivalents			464,093		(1,657,896)	(848,719)
Cash and cash equivalents at beginning of period / year			683,974		2,356,225	2,356,225
FX on cash			(8,208)		(14,355)	(69)
Cash and cash equivalents at end of period			1,139,859		683,974	1,507,437

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2024

	Share capital	Share premium	Other reserves	Retained earnings/loss	Total
Unaudited- 30 June 2024
At 1 January 2024	87,752	4,190,900	219,488	(3,772,225)	725,915
Loss of the period	-	-	-	(524,259)	(524,259)
Exchange differences on translation of foreign operations	-	-	(8,652)	-	(8,652)
Total comprehensive loss for the period	-	-	(8,652)	(524,259)	(532,911)
Transactions with owners
Issue of share capital	17,160	697,840	-	-	715,000
Costs of issue	-	(51,400)	-	-	(51,400)
Share based payments	-	-	1,741	-	1,741
Total Transactions with owners	17,160	646,440	1,741	-	665,341
At 30 June 2024 (unaudited)	104,912	4,837,340	212,577	(4,296,484)	858,345
Unaudited- 30 June 2023
At 1 January 2023	87,752	4,190,900	231,341	(2,143,520)	2,366,473
Loss of the period	-	-	-	(621,539)	(621,539)
Exchange differences on translation of foreign operations	-	-	(26,749)	-	(26,749)
Total comprehensive loss for the period	-	-	(26,749)	(621,539)	(648,288)
Total Transactions with owners	-	-	-	-	-
At 30 June 2023 (unaudited)	87,752	4,190,900	204,592	(2,765,059)	1,718,185
Audited- 31 December 2023
At 1 January 2023	87,752	4,190,900	231,341	(2,143,520)	2,366,473
Loss for the year	-	-	-	(1,628,705)	(1,628,705)
Exchange differences on translation of foreign operations	-	-	(11,853)	-	(11,853)
Total comprehensive loss for the period	-	-	(11,853)	(1,628,705)	(1,640,558)
Total Transactions with owners	-	-	-	-	-
At 31 December 2023 (audited)	87,752	4,190,900	219,488	(3,772,225)	725,915

1.             Reporting Entity 

Genflow Biosciences Plc (the "Company") is a company domiciled in the United Kingdom. The consolidated interim financial information as at, and for the six months ended, 30 June 2024 comprise the results of the Company and its subsidiaries (together referred to as the "Group").

The consolidated financial statements of the Group as at, and for the year ended, 31 December 2023 are available upon request from the Company's registered office at 6 Heddon Street, London, W1B 4BT or at genflowbio.com.

2.             BASIS OF PREPARATION

The financial information of the Group for the 6 months ended 30 June 2024 was approved and authorised for issue by the Board of the Company on 30 September 2024. The interim results have not been audited. This financial information has been prepared in accordance with the accounting policies that are expected to be applied in the Report and Accounts of the Company for the year ended 31 December 2023 and are consistent with the recognition and measurement requirements of IFRS as adopted by the United Kingdom. The comparative information for the full year ended 31 December 2023 is not the Group's full annual accounts for that period but has been derived from the annual financial statements for that period. 

The consolidated financial information incorporates the results of the Group as at 30 June 2024. The corresponding amounts are for the year ended 31 December 2023 and for the 6 month period ended 30 June 2023.

The Group financial information is presented in Pound Sterling and values are rounded to the nearest pound. 

The same accounting policies, presentation and methods of computation are followed in the interim consolidated financial information as were applied in the Group's latest annual audited financial statements except for those that relate to new standards and interpretations effective for the first time for periods beginning on (or after) 1 January 2024 and will be adopted in the 2024 annual financial statements. 

A number of new standards and amendments became effective on 1 January 2024 and have been adopted by the Group. None of these standards have materially affected the Group.

3.             GOING CONCERN

As the Group's assets are not generating revenue, an operating loss has been reported and an operating loss is expected in the 12 months to 30 June 2025. However, the Directors believe that the Group will have sufficient funds to meet its immediate working capital requirements and undertake its targeted operating activities over the next 12 months from the date of approval of these financial statements.

As at 30 June 2024, the Group has cash resources of £1,139,859. The Group received funding during the period to support working capital requirements and to support its scientific research and development work streams. In April 2024, the Company completed a placing and subscription which raised £715,000 (before expenses); and received the second tranche of the grant from the Wallonia Region, totalling €350,000. In May 2024, the Group secured further grant funding of €1.55m, of which €777,273 has been received and the remainder will be received in 2025.

Management plan to use these funds, and future grant funding, to meet the working capital requirements of the Group and to further its research and development activities. In early 2024, management prepared a forecast covering 18-months and believe that current cash reserves plus the receipt of committed grant funding in 2025 will adequately cover the working capital requirements of the Group. Notably, all research and development costs are discretionary and therefore, can be reduced if necessary. However, the Group will need to seek further funding to progress the Group's research workstreams and to progress to the clinical trial phase. 

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 interim financial statements.

4.             EXPENSES BY NATURE

	Unaudited 6 Months ended 30 June 2024 £	Audited 12 Months ended 31 December 2023 £	Unaudited 6 Months ended 30 June 2023 £
Directors' fees	178,656	362,312	178,783
Directors' pensions	713	1,093	381
Directors' social security contributions	5,069	14,945	8,245
Fees payable to the Company's auditors for the audit of the Parent Company and group financial statements	5,000	53,285	-
Professional, legal and consulting fees	90,654	215,971	103,366
PR and marketing	48,535	106,819	63,903
Accounting related services	3,780	7,839	8,638
Insurance	19,595	22,476	19,563
Office and administrative expenses	10,777	18,897	5,092
IT and software services	7,377	5,828	1,492
Travel and entertainment	927	23,830	13,255
Research and development costs	938,109	960,314	415,157
Share based payments	1,741	-	-
Depreciation	610	1,034	-
Other expenses	4,825	3,196	(2,398)
Total administrative expenses	1,316,368	1,798,559	815,477

5.             LOSS PER SHARE

	Unaudited 6 Months ended 30 June 2024 £	Audited 12 Months ended 31 December 2023 £	Unaudited 6 Months ended 30 June 2023 £
Net loss for the year from continued operations attributable to equity shareholders	524,259	1,628,705	621,539
Weighted average number of shares for the period/year	318,085,714	292,506,618	292,506,618
Basic loss per share for continued operations (expressed in pence)	(0.165)	(0.557)	(0.210)

6.                TRADE AND OTHER DEBTORS

Trade and other debtors	Unaudited 6 Months ended 30 June 2024 £	Audited 12 Months ended 31 December 2023 £	Unaudited 6 Months ended 30 June 2023 £
VAT receivable	46,011	36,278	48,205
Prepayments	158,748	41,041	22,854
Other receivables	3,032	306,966	329,832
	207,791	384,285	400,891

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 aging analysis has not been provided. 

7.                TRADE AND OTHER PAYABLES

	Unaudited 6 Months ended 30 June 2024 £	Audited 12 Months ended 31 December 2023 £	Unaudited 6 Months ended 30 June 2023 £
Trade payables	442,221	254,695	143,654
Accruals	32,841	60,014	34,012
Other payables	17,699	31,029	16,468
	492,761	345,738	194,134

All trade and other payables are due for payment within twelve months. Trade payables are settled within normal commercial terms, usually between 30-60 days.

8.             Share capital

Company	Number of shares	Ordinary shares £	Share premium £	Total £
Issued and fully paid
At 1 January 2023	292,506,618	87,752	4,190,900	4,278,652
At 30 December 2023	292,506,618	87,752	4,190,900	4,278,652
Issue of Ordinary Shares	57,200,000	17,160	697,840	715,000
Deduction of cost of capital	-	-	(51,400)	(51,400)
At 30 June 2024	349,706,618	104,912	4,837,340	4,942,252

On 9 Aril 2024, the Company issued and allotted 57,200,000 new Ordinary Shares at a price of 0.0125 pence per share for gross proceeds of £715,000 (excluding expenses).

 

9.             Share WARRANT reserve

 

The balance held in the share options reserve relates to the fair value of the share warrants that have been charged to the profit or loss since adoption of IFRS 2 'Share-based payment'.

Warrants:

At 30 June 2024, 2,860,000 warrants over shares were exercisable (31 December 2023: No warrants were exercisable).

2,860,000 warrants were granted during the year (31 December 2023: No warrants granted) pursuant to the terms of a placing of shares.

During the period ended 30 June 2024, no warrants were exercised (year ended 31 December 2023: No warrants were exercised) and no warrants expired in the period (year ended 31 December 2023: No warrants expired).

£1,741 was charge to loss for the year in respect of outstanding warrants (2023: Nil).

10.          COMMITMENTS

The commitments stated in the Group's Annual Financial Statements for the year ended 31 December 2023 remain in place.

11.          EVENTS AFTER THE REPORTING DATE

There were no events after the reporting period.

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation ("MAR") (EU) No. 596/2014, as incorporated into UK law by the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Contacts

Genflow Biosciences	Harbor Access
Dr Eric Leire, CEO	Jonathan Paterson, Investor Relations
[phone]	[phone]
	[e-mail]

Corporate Brokers
Capital Plus Partners Ltd
Keith Swann, [phone]
Jon Critchley, [phone]

About Genflow Biosciences

Founded in 2020, Genflow Biosciences Plc. (LSE:GENF) (OTCQB:GENFF), a biotechnology company headquartered in the UK with R&D facilities in Belgium, is pioneering gene therapies to decelerate the aging process, with the goal of promoting longer and healthier lives while mitigating the financial, emotional, and social impacts of a fast-growing aging global population. Genflow's lead compound, GF-1002, works through the delivery of a centenarian variant of the SIRT6 gene which has yielded promising preclinical results. Scheduled to begin in 2025, Genflow's clinical trial aims to explore the potential benefits of GF-1002 in treating MASH (Metabolic Dysfunction-Associated Steatohepatitis), the most prevalent chronic liver disease for which there is no effective treatments. Please visit www.genflowbio.com  and follow the Company on LinkedIn and Twitter/X.

DISCLAIMER

The contents of this announcement have been prepared by, and are the sole responsibility of, the Company.

This announcement may contain forward-looking statements. The forward-looking statements include, but are not limited to, statements regarding the Company's or the Directors' expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statement that refers to projections, forecasts or other characterisations of future events or circumstances, including any underlying assumptions, is a forward-looking statement. The words "anticipate", "believe", "continue", "could", "estimate", "expect", "intend", "may", "might", "plan", "possible", "potential", "predict", "project", "seek", "should", "would" and similar expressions, or in each case their negatives, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

Forward-looking statements include all matters that are not historical facts. Forward-looking statements are based on the current expectations and assumptions regarding the Company, the business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements are not guarantees of future performance and the Company's actual financial condition, actual results of operations and financial performance, and the development of the industries in which it operates or will operate, may differ materially from those made in or suggested by the forward-looking statements contained in this announcement. In addition, even if the Company's financial condition, results of operations and the development of the industries in which it operates or will operate, are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of financial condition, results of operations or developments in subsequent periods. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global, political, economic, social, business, technological, competitive, market and regulatory conditions.

Any forward-looking statement contained in this announcement applies only as of the date of this announcement and is expressly qualified in its entirety by these cautionary statements. Factors or events that could cause the Company's actual plans or results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in its expectations or any change in events, conditions or circumstances on which any forward-looking statement contained in this announcement is based, unless required to do so by applicable law, the Prospectus Regulation Rules, the Listing Rules, the Disclosure Guidance and Transparency Rules of the FCA or the UK Market Abuse Regulation.

 

END