The company’s interest in subsidiary undertakings is as follows:

Tiziana Therapeutics Inc was incorporated on 28 October 2015. This entity was set up to house the Company’s US operations.

Longevia Genomics SRL was incorporated on 4 July 2016. This entity was established to enable the Company to carry out R&D activities in Sardinia and acting as the European legal representative of the Group, as per EU regulatory (AIFA) requirements.

Stemprinter Sciences Ltd was incorporated on 3 September 2020. This entity was established to enable the transfer of the ownership rights and intellectual property relating to StemPrintER™. The subsidiary was sold to Accustem Sciences Ltd in October 2020.

During the year, the Company undertook an impairment review of its investments in subsidiaries.

The Company has been funding its subsidiary operations from funds raised by the Company for the development of its project portfolio. The subsidiary’s activities have all been to support the Company in achieving its goals for progression of the project portfolio. The funding provided to the subsidiaries to date has been recognized in the Company as Investment in its subsidiaries, and the Company does not expect the amounts to be repaid. The IP relating to the project portfolio belongs to the Company and hence any future benefits will also belong to the Company. It is highly unlikely that these benefits will be distributed to the subsidiaries. The Company therefore determined that the investment should be impaired. 

In November 2019, the Group subleased one of its leased office spaces in its entirety. The sublease runs for the remaining term of the original lease, until October 2021. The sublease has been classified as a finance lease receivable

The undiscounted lease payments to be received over the next 5 years are as follows:

The undiscounted lease payments do not include a discount factor charge of $6k.

During the year ending December 31, 2020, the Group received $152k of income from its subleasing activities.

Basic loss per share is calculated by dividing the profit attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the year.

As the Group is reporting a loss from continuing operations for the year then, in accordance with IAS 33, the share options are not considered dilutive because the exercise of the share options would have an anti-dilutive effect. The basic and diluted earnings per share as presented on the face of the income statement are therefore identical. All earnings per share figures presented above arise from continuing and total operations and therefore no earnings per share for discontinued operations are presented.

The earnings have been amended to include the interest accrued on Convertible Loan Notes.

The Group’s main financial commitments relate to the contractual payments in respect of its licensing agreements. Due to the uncertain nature of scientific research and development and the length of time required to reach commercialisation of the products of this research and development, pre-clinical, clinical and commercial milestone obligations are not detailed until there is a reasonable certainty that the obligation will become payable. Contractual commitments are detailed where amounts are known and certain.

We are obligated to pay Nerviano the following additional amounts in respect of the first licensed product or service which achieves the stated development milestones:

The following share options were granted to directors in the following periods:

The key management personnel of the Group are considered to be represented by the directors and officers of the Company.

No director has yet benefitted from any increase in the value of share capital since issuance of the options.

2,319,225 share options were exercised by directors in the year for an intrinsic gain of $4.1m.

The Company made $10k (2019: $16k) of payments to a defined contribution pension schemes on behalf of directors or employees.

The main risks arising from the Group’s financial instruments are liquidity risk, foreign currency risk and credit risk. The directors regularly review and agree policies for managing each of these risks which are summarised below.

Market risk

Market risk encompasses three types of risk, being foreign currency exchange risk, price risk and fair value interest rate risk. The Group policies for managing fair value interest rate risk are considered along with those for managing cash flow interest rate risk and are set out in the subsection entitled “interest rate risk” below. The Directors do not consider the Group’s exposure to price risk to be significant. The Group’s risk management is coordinated by the Directors and focuses on actively securing the Group’s short to medium term cash flows by minimising the exposure to financial markets. The Group does not engage in the trading of financial assets for speculative purposes.

Credit risk

Credit risk is managed on a Group basis. Credit risk arises principally from cash and cash equivalents and deposits with banks and financial institutions as well as credit exposure to customers including committed transactions and outstanding receivables. The Group reviews its banking arrangements carefully to minimise such risks and currently has no customers and therefore this risk is viewed as minimal. Management monitor loans between members of the Group as part of their internal reporting and assess outstanding receivables for ability to be repaid.

Liquidity risk

The Group’s policy is to regularly monitor current and expected liquidity requirements to ensure that it maintains sufficient reserves of cash to meet its liquidity requirements in the short and long term. The Group ordinarily finances its activities through cash generated from by private and public offerings of equity and debt securities.

The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments:

Interest rate risk

The Group has limited exposure to interest-rate risk arising from its bank deposits. These deposit accounts are held at variable interest rates based on Barclays Bank base rate.

The Directors do not consider the impact of possible interest rate changes based on current market conditions to be material to the net result for the year or the equity position at the year-end for either the year ended 31 December 2020 or 31 December 2019.

The Group’s operating loss are stated after charging the following:

On 4 January 2021, the Company announced that it had completed its clinical study in Brazil investigating nasally administered Foralumab, its proprietary human monoclonal antibody, either alone or in combination with orally administered dexamethasone in COVID-19 patients.

On 13 January 2021, the Company announced the appointment of Dr Neil Graham MBBS, MD, MPH as Chief Medical Officer.

On 20 January 2021, the Company announced the cancellation of admission of its Ordinary Shares to trading on AIM and admission to listing of its ordinary shares on the standard listing segment of the Official List of the Financial Conduct Authority and admission to trading on the main market for listed securities of London Stock Exchange plc. The last day of trading of the Company’s Ordinary Shares on AIM was 20 January 2021 and the AIM Delisting was effective from 7.00 am 21 January 2021. Admission of shares to the Official List and commencement of dealing in the Ordinary Shares of the Company on the Main Market was effective from 8.00 am on 21 January 2021.

On 5 February 2021, the Company announced the appointment of Dr Thomas Adams, Ph.D. as an executive director. Dr Adams assumed the position of Head of Drug Development with immediate effect and his executive role is to manage and oversee all matters relating to the Company’s pre-clinical and clinical drug development programs and associated intellectual property.

On 30 March 2021, the Company announced that the U.S. Food and Drug Administration (FDA) has allowed evaluation of nasal administration with Foralumab, a fully human anti-CD3 monoclonal antibody, in a secondary progressive multiple sclerosis (SPMS) patient at the Brigham and Women’s Hospital (BWH), Harvard University, Boston, MA. This patient will be treated under an Individual Patient Expanded Access IND. This is the first time a nasally administered antibody will be administered to a patient with SPMS. The treatment is planned to start in the second quarter of 2021 and will continue for six months. Investigators at BWH will follow this patient with detailed routine safety, neurological, imaging and PET studies to evaluate microglial imaging. Modification of immunological and neurodegenerative markers is part of standard investigations that will be conducted at the BWH. 

On October 31, 2019, the Company decided to raise convertible equity finance from supportive existing shareholders. $1,850,000 was raised from the issuance of Convertible Loan Notes. The Loan Notes are short term instruments and carry a coupon of 16% per annum and are convertible (together with all accrued interest) into ordinary shares of nominal value £0.03 each in the capital of the Company at a conversion price of 42p, they are not convertible into cash. The Loan Notes are convertible on the third anniversary of the date of issue of the Notes, or at the election of the noteholder on completion of the next non-qualifying equity financing or on the making of a takeover offer for the Company(as defined in the City Code on Takeovers and Mergers), and such election may be made on an immediate basis or conditional on any such takeover offer being declared, or becoming, unconditional.

The warrants issued in connection with the Loan Notes entitle the holders to subscribe for one additional share per conversion share at the same price of 42p. The warrants may be exercised for a period of up to 5 years from their date of issue.

The principal amount of the Convertible Equity Instrument that was recorded as in the convertible loan note reserve prior to conversion is as follows: