Incanthera (AQUIS:INC) — AGM 2023

0:02 Good morning, ladies and gentlemen, and welcome to the INCANTHERA PLC Annual General Meeting twenty twenty three. Throughout this recorded meeting, attendees will be in listen only mode. Questions are encouraged. They can be submitted at any time using the Q and A tab on

0:17 I'd now like to hand over to Chairman, Tim McCarthy. Good morning. Thank you very much, Mark. Good morning, everyone. We are here at the AGM for INCANTHERA and for anybody that doesn't know me, I'm Chairman Tim McCarthy. We have in the room here in person all four members of the team, which I'll introduce in a moment. We have one of the shareholder in person, so welcome to you. And I'm hoping that we've got a number of shareholders online and maybe some of this as well. So you're all very welcome. But first let me introduce the team that I've got with me. You can see on the screen hopefully next to me is CEO doctor Simon Ward, and out of shot we have our CFO, Laura Brogdon, and we also have Suzanne Brox who's our corporate secretary company secretary, I should say, and head of communications.

1:08 So it's fairly straightforward as an AGM. We've got a number of resolutions which I will read out now and give all the voteings on those. We are obviously through this medium of INC willing and able to take some questions. We've already had three pre submitted questions which we'll deal with at the end of the formal meeting and if any of you wish to post any questions onto the portal then please do so and we'll deal with you in the session. And of course our shareholder in the room here is also very welcome to ask some questions at the end as well. So without further ado, I shall get going and forgive me if I bow my head every now and again, I'm not praying to you, I'm just reading my scripts so I don't forget the numbers.

1:54 So we go straight into the business which is to go through resolutions for voting. So resolution one is an ordinary resolution for the company to receive the accounts of the company for the year ended 03/31/2023 together with the report of the directors and owners of the company. And the voting that we've received for that is 16,960,807 ordinary shares in favour of resolution one and none against the resolution. Now I've just read the first resolution, completely messed this up because I really should have gone to the room and asked us a pan. So forgive me if I do that. So we're all shareholders, obviously, team and one shareholder with us. So if I can just ask for a show of hands for in favor of the resolution.

2:46 As it's unanimous, there clearly aren't any against. So it's passed by a show of hands. But as I've just previously read out the numbers, we'll proxy those, so I'll do that again. Now the next resolution is my re election on the normal cycle of re election directors. So I'm going hand over to Simon just to handle that one. Thank you very much. So again, if we go for a show of hands for for, passing this ordinary resolution to reelect Timothy McCarthy, who offers himself for reelection as the director and is eligible. Those four?

3:19 Those against? We have everybody four in the room and none against, and we have received proxy votes in respect of 16,959,168 ordinary shares in favor of this resolution and none against. Therefore, we can pass this ordinary resolution to reelect Timothy McCarthy. Thanks, Simon. So on to Resolution three, which is an ordinary resolution to reappoint Jefferies Henry LLP as auditor of the company.

3:47 So if I go to the room, can I have a show of hands in favor of the resolution?

3:54 Any against? Again, as it's unanimous, obviously, there aren't any against. And the proxy votes we've received for these are 14,981,007 in favor and 1,979,800 against the resolution. So with all of that, the resolution has been passed as an ordinary resolution. Resolution three has been passed as an ordinary resolution. So we've gone to resolution four, which is an ordinary resolution authorizing the directors to allot relevant securities up to an aggregate amount of 518,828. So again, everyone in the room in favor? Again, unanimous. And the proxy votes on this are 16,959,168 in favor and 1,639 gates.

4:44 So resolution four has been passed as an ordinary resolution. We've gone now to the resolution five, which is a special resolution empowering the directors to allot equity securities pursuant to the authority conferred on them by the previous resolution four as if the preemption rights in section five sixty one of Companies Act 2,006 did not apply, provided this power is limited to the allotment of exo security to set out in the notice. So again, if I can ask everybody in the room to put the hands up in favor, again unanimous. And the proxy voting on this is in favor 16,784,008 and 1,639 gates. So resolution five has been passed to special resolution.

5:31 So that concludes the formal business. All resolutions haven't been passed. So thank you all very much who participated and voted. So I think I mentioned right at the top of the meeting that we have three pre submitted questions which we're gonna deal with between us and the team. And we'll keep an eye on the computer screen. We've got just out out of shop for you to see if anybody's submitting any questions online. So the first question we have is have any of the prospective partners now this when somebody asked a question about prospective partners, you will all be aware that the company has been looking to commercialize our technology in the area of dermatology and prevention of melanoma and skin cancers, And we're making very good progress on that and I think we've made a number of public announcements. I know we have to update the market as we go along. And clearly, as of when we have something to announce in terms of a concrete deal, we will put that out. But in the meantime, this question has come in along the basis of how we get on with looking at those partners. Specifically asking has any partners assessed the product in their own laboratories?

6:51 And if so, have they shared the results with us and are they comparable to our own in house data? So this is, I guess you could put this in the realm of a potential partner doing their due diligence. So I'm going hand over to Simon to answer that if you wouldn't mind, Simon. No, absolutely. And the short answer is yes, of course. Our dermatology products have been externally evaluated by prospective partners. And to illustrate that, actually, preferred partner has gone so far as to take four of our different product lines into their manufacturing processes to determine whether or not they can successfully manufacture a commercial scale and the commercial standard batch,

7:29 which they have brought back to their satisfaction they can. So obviously, it's very exciting and we're pushing along on that front with all steam. Good. Thanks. Another question was quite a technical accounting question, which I'm going to ask Laura to respond to. If I can read it out, it's quite detailed question, so forgive the technical nature of it. The accounts reflect a write down in intangibles from £583,000 on 03/31/2022 to £58,000 on 03/31/2023, which is obviously the year we just reported on. The notice applies that licenses are amortized over ten to twenty years and the patents and IP are amortized on a straight line basis over remaining useful life up to twenty years.

8:16 The magnitude of the write down is therefore well beyond normal rates of amortization. Can the directors advise what has been written down or written off and the basis for those write downs. So I'm going to ask Laura if she can respond now. Unfortunately, both Laura and Suzanne are out of the camera shop, but hopefully you'll be able hear the answer. Okay. Thank you.

8:38 So the general approach that's mentioned there in the question is obviously quite correct. And as is the usual case, as part of our annual audit process, we will carry out a full IP asset portfolio review. This year, in consideration of the length of time it takes to develop assets of this time, we felt a more prudent approach was appropriate and as a team agreed to carry out a one time impairment adjustment across the full portfolio. This is of course an accounting adjustment and in no way impacts on our ability to develop and commercialize our assets. Okay, thank you. The third question we've had pre submitted is about cash, the company cash position, so let me read that out and I'm going to answer that myself.

9:27 So given the essentially zero cash position of the company at the date of the annual report and accounts and the fairly limited comments within that document about future source of funding, can the directors provide clarity and details as to how future finance is expected to be secured at least prior to revenue generation? So this is a fairly simple response. We have been very cash strapped for for a long time now to the extent that we have been extremely careful on minimizing our expenditure. All the team here in the room has not been taking any salary or recompense for anything which they're doing. And primarily Simon and myself have been supporting the company wherever is needed with small cash injections to pay the most essential bills.

10:19 The question alludes to how do we look for future finance prior to revenue generation. If I can just use that to expand my answer along the lines of whatever the company's expecting from us and that is obviously a commercial deal. We're we're very confident about all discussions with that we've got going on and I think we've we've said that publicly on a number of occasions. And our expectation is that we are more than able to support the company going forward as we currently are, and as and when we sign that deal then that in itself will lead to growth generation and income, which we're very hopeful that that will in very short order make us cash independent of the equity markets and having to raise equity finance.

11:12 I'm not saying that we will not raise any equity finance, but the whole point of doing a commercial deal is to reach a point where we are revenue generating, profitable and cash generative. And that's what we hope and believe that when we enter into a commercial deal, or deals in the brewer if that may be, that we will very quickly get to that point. But certainly for the immediate point in time, then we will continue to support the company as we have done in the last twelve, eighteen months. So that's the pre submitted questions. I'm just looking at we've got a monitor just to the side here. We're just gonna have a look, if you don't mind, we'll lean over and look at the questions. Okay. So we've got a question here. I I won't I won't identify anybody by name, but I think I've probably just responded to the first question, which is how will the company be financed in the short term before any commercial deals are signed? So I think adequately covered that hopefully.

12:13 Does INCANTHERA have enough cash to reach commercial success? It's a similar question, put in a slightly different way. The the short answer is yes. We're we're fine in terms of cash. We're not gonna get into financial difficulties. So and we're we're very we're very hopeful and and confident about the outlook for for doing a commercial deal, and that unlocks all sorts of positive things. Third question is why have you dropped the reference to SOL as a product? I don't I don't think we'd necessarily drop reference to SOL as a product, but what we what we found over the last twelve, twenty months is is the portfolio is expanding, and SOL may be there as a brand name going forward, or we may choose another brand name or another another way to describe the products that we're we're developing and discussing with partners. So it's nothing deliberate.

13:09 So but let's see what happens as we go forward. And I think for the moment oh, no. Another one just popped in. So if partner I think this is a response to your your answer, Simon. If if partners are satisfied themselves as to the manufacturability, and that's a new word on me, but anyway, the manufacturability of SOL, have you a sense as to what is still holding them back from finalizing the deal? Right. I don't think there is anything holding anybody back. There there is a process that one needs to go through. Part of talking to potential partners is they need to do their due diligence. As Simon was responding to earlier, they have gone through quite a number of steps to validate the processes and everything that is required.

14:01 So I can't really answer that in the way that I might like to, but please be assured that we are making very, very positive progress towards the commercial deal. And the fact that we've reached that level of due diligence with at least one partner should give you some confidence that we are progressing towards a deal. There aren't any hurdles per se, which is what the question is implying. It's just process. So at the moment, we've got a clear screen. We're gonna have any more questions. Cheryl in the room, do you have any questions? Not on the call. No? Okay. Alright. So I think we've we've covered everything. We've done the business of the AGM. We've answered the questions.

14:48 Thank you all for attending today. Pretty short meeting, I know. But hopefully, you can go away with our confidence about the path forward for the company. I know it's been a long haul for shareholders in the same way it's been a long haul for us as a team and shareholders. But we're we're pretty confident of of looking forward and starting to deliver on on those commercial deals and and promises that we've made to you. So keep the faith, and we'll be back to you as soon as we can with this update news. Thank you all once again. That's great, Tim. Thank you very much indeed and to the board from INCANTHERA for updating attendees this afternoon. Can I please ask attendees not to close the session as we'll now automatically redirect you for the opportunity to provide your feedback in order the Board can better understand your views and expectations?

15:35 This may take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the Board of INCANTHERA PLC, I'd like to thank you for attending today's annual general meeting, and good afternoon to you all.