NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2025

 

1          GENERAL INFORMATION

Solvonis Therapeutics Plc ("the Company" or "Solvonis") was incorporated in England and Wales as a limited company on 18 May 2017 as Graft Polymer (UK) Limited and was re-registered as a public limited company, Graft Polymer (UK) Plc, on 1 July 2021. On 6 January 2025 the company changed its name to Solvonis Therapeutics Plc. The Company is domiciled in England and Wales with its registered office at Eccleston Yards, 25 Eccleston Place, London, SW1W 9NF. The Company's registered number is 10776788.

The principal activities of the Company and all of its subsidiaries collectively referred to as "the Group" are the development of novel small-molecule therapeutics for high-burden central nervous system ("CNS") disorders.

The Group financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards (IFRS), International standards and Interpretations (collectively IFRSs) issued by the International Accounting Standards Boards (IASB) and with those parts of the Companies Act 2006 applicable to those companies reporting under IFRS.

2          ACCOUNTING POLICIES

IAS 8 requires that management shall use its judgement in developing and applying accounting policies that result in information which is relevant to the economic decision-making needs of users, that are reliable, free from bias, prudent, complete and represent faithfully the financial position, financial performance and cash flows of the entity.

2.1       Basis of preparation

The financial statements have been prepared in accordance with UK-adopted international accounting standards in conformity with the Companies Act 2006.

The financial statements have been prepared under the historical cost convention unless stated otherwise. The principal accounting policies are set out below and have, unless otherwise stated, been applied consistently for all periods presented in these financial statements. The financial statements have been prepared in £GBP and presented to the nearest £'000.

The functional currency for each entity in the Group is determined as the currency of the primary economic environment in which it operates.  The functional currency of the Company is Pounds Sterling (£) as this is the currency that finance was raised in.

The functional currency of subsidiaries is the currency that mainly influences labour, material and other costs of providing services. Consequently the functional currencies of entities  domiciled in Europe, Canada and United State is the Euro, Canadian Dollar and US Dollar respectively. The presentational currency of the Group is Pounds Sterling (£). Foreign operations were translated in accordance with the policies set out further below in the notes at note 2.4.

The Group presents its financial statements for the year ended 31 December 2025 and presents comparatives for the year ending 31 December 2024.

 

 

2.2       Going concern

The Directors have assessed the going concern status of the Company for a period of not less than twelve months from the anticipated date of approval of the financial statements. As a clinical-stage, pre-revenue biopharmaceutical company, Solvonis Therapeutics Plc funds its operations through periodic equity capital raises rather than commercial revenue generation and consequently need to exercise caution over expenditures.

 

As a result the Directors have reviewed detailed cash flow forecasts and a working capital model prepared by management in forming their conclusion around going concern. The forecasts reflects that management are gaining greater control over their cost base post acquiring significant intellectual property though the Awakn acquisition. While there is not an immediate need for capital the Board is aware of the need for pre-revenue Company's to fund their operations through equity and are in constant communication with its brokers to assess the funding landscape. The Directors also retain a number of levers to manage cash outflows should circumstances require, including the ability to defer discretionary R&D programmes whilst still achieving their objectives.

 

The Directors are satisfied that the going concern basis of preparation remains appropriate. However, they draw attention to the fact that the Company's ability to continue as a going concern is dependent on the successful completion of further equity fundraising within the assessment period. This represents a material uncertainty as disclosed in the auditors report and the financial statements do not include any adjustments that would result from the going concern basis of preparation being inappropriate. Ultimately after considering all of these factors the Directors are comfortable with the financial statements being prepared on a going concern basis.

 

2.3       Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 December each year. Per IFRS 10, control is achieved when the Company:

·    has the power over the investee;

·    is exposed, or has rights, to variable returns from its involvement with the investee; and

·    has the ability to use its power to affects its returns.

 

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.  When the Company has less than a majority of the voting rights of an investee, it considers that it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:

·   the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

·   potential voting rights held by the Company, other vote holders or other parties;

·   rights arising from other contractual arrangements; and

·   any additional facts and circumstances that indicate that the Company has, or does not have,      the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders' meetings.

 

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, the results of subsidiaries acquired or disposed of during the year are included in profit or loss from the date the Company gains control until the date when the Company ceases to control the subsidiary.  Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with the Group's accounting policies.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation.

2.4       Foreign currency translation

i.        Functional and presentation currency

Items included in the financial statements for each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements is presented in £ Sterling, which is the Company's presentation and functional currency. The individual financial statements of each of the Company's wholly owned subsidiaries are prepared in the currency of the primary economic environment in which it operates (its functional currency). IAS 21 The Effects of Changes in Foreign Exchange Rates requires that assets and liabilities be translated using the exchange rate at period end, and income, expenses and cash flow items are translated using the rate that approximates the exchange rates at the dates of the transactions (i.e. the average rate for the period). The foreign exchange differences on translation is recognised in other comprehensive income (loss).

ii.       Transactions and balances

Transactions denominated in a foreign currency are translated into the functional currency at the exchange rate at the date of the transaction. Assets and liabilities in foreign currencies are translated to the functional currency at rates of exchange ruling at balance date. Gains or losses arising from settlement of transactions and from translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement for the period.

iii.      Group companies

The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

-     assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet;

-     income and expenses for each income statement are translated at the average exchange rate; and all resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken to shareholders' equity. When a foreign operation is partially disposed or sold, exchange differences that were recorded in equity are recognised in the income statement as part of the gain or loss on sale.

2.5       Impairment of non-financial assets

Non-financial assets and intangible assets not subject to amortisation are tested annually for impairment at each reporting date and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment review is based on forecasted future cash flows. If the expected discounted future cash flow from the use of the assets and their eventual disposal is less than the carrying amount of the assets, an impairment loss is recognised in profit or loss and not subsequently reversed.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash flows (cash generating units or 'CGUs').

2.6       Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand, and demand deposits with banks and other financial institutions and bank overdrafts.

2.7       Financial instruments

IFRS 9 requires an entity to address the classification, measurement and recognition of financial assets and liabilities.

a)  Classification

The Group classifies its financial assets in the following measurement categories:

·    those to be measured at amortised cost; and

·    those to be measured subsequently at fair value through profit or loss.

 

The classification depends on the Group's business model for managing the financial assets and the contractual terms of the cash flows.

The Group classifies 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 contractual cash flows; and

·  the contractual terms give rise to cash flows that are solely payment of principal and interest.

b)  Recognition

Purchases and sales of financial assets are recognised on trade date (that is, the date on which the Group commits to purchase or sell the asset). Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

c)  Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset.

Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Debt instruments

Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses)  together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the statement of profit or loss.

d)  Impairment

The Group assesses, on a forward looking basis, the expected credit losses associated with any debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

2.8       Trade and other receivables

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days.

 

2.9       Trade and other payables

These amounts represent liabilities for goods and services provided to the consolidated Group prior to the end of the financial year and which are unpaid. Due to their short-term nature, they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.

 

2.10     Equity

Share capital is determined using the nominal value of shares that have been issued.

Share capital to be issued relates to salaries foregone by Directors and other consultants. Upon the issue publication of a prospectus shares will be issued to compensate the necessary parties and will be allocated amongst the share capital and share premium accounts.

The Share premium account includes any premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from the Share premium account, net of any related income tax benefits.

For the purposes of presenting consolidated financial statements, the assets and liabilities of group's foreign operations are translated at the exchange rates prevailing at the balance sheet date and items of income and expenditure are translated at the average exchange rate for the period. Exchange differences arising are recognised in other comprehensive income and accumulated in the Foreign Currency Reserve within equity.

Equity-settled share-based payments are credited to a share-based payment reserve as a component of equity until related options or warrants are exercised or lapse.

The foreign exchange reserve policy is set out in note 2.4.

Capital reduction reserve represents funds sent from the parent company to subsidiary that on the approval of Directors was reclassified from a loan in the subsidiary to an investment.

Retained losses includes all current and prior period results as disclosed in the income statement.

2.11     Share based payments

The Group has made awards of warrants and options on its unissued share capital to certain parties in return for services provided to the Group. The valuation of these warrants involved making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and interest rates. These assumptions have been integrated into the Black Scholes Option Pricing model and the Monte Carlo valuation model to derive a value for any share-based payments. These assumptions are described in more detail in note 20.  

2.12     Earnings per share

The Group presents basic and diluted earnings per share data for its Ordinary Shares.

Basic earnings per Ordinary Share is calculated by dividing the profit or loss attributable to Shareholders by the weighted average number of Ordinary Shares outstanding during the period.

Diluted earnings per Ordinary Share is calculated by adjusting the earnings and number of Ordinary Shares for the effects of dilutive potential Ordinary Shares.

2.13     Taxation

Tax currently payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the income statement because it excludes items of income and expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is proved in full on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statement. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised of the deferred tax liability is settled.

2.14     Intangible assets

Intangible assets acquired are initially recognised at cost.  Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment. The gains and losses recognised in profit or loss arising from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying amount of the intangible asset. 

Intangible asset impairment reviews are undertaken annually, or more frequently if events or changes in circumstances indicate a potential impairment. The method and useful lives of finite life intangible assets are reviewed annually.  Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or period.

2.15     Investments in Subsidiaries

Investments in Group undertakings are stated at cost.

 

 

2.16     Financial liabilities

Other financial liabilities are initially recognised at fair values less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method.

2.17     Borrowings

Borrowings are initially recognised at fair value, net of directly attributable transaction costs. They are subsequently measured at amortised cost using the effective interest method. The difference between proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the term of the borrowing.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement for at least twelve months after the reporting date.

2.18     Critical judgements and key sources of estimation uncertainty

The preparation of the consolidated financial statements requires management to make estimates and judgements and form assumptions that affects the reported amounts of the assets, liabilities, revenue and costs during the periods presented therein, and the disclosure of contingent liabilities at the date of the financial information. Estimates and judgements are continually evaluated and based on management's historical experience and other factors, including future expectations and events that are believed to be reasonable.

Share based payments (Note 20)

The Group issues options and warrants to its employees, directors, investors and advisors.  These are valued in accordance with IFRS 2 "Share-based payments".  In calculating the related charge on issuing shares and warrants the Group will use a variety of estimates and judgements in respect of inputs used including share price volatility, risk free rate, and expected life.  Changes to these inputs may impact the related charge. In the period the Group did not perform any new valuations but released expenses to the statement of other comprehensive income from valuations in prior periods. The charge processed in relation to the current year was £998,590 (2024: £317,449).

 

Impairment of intangible asset (Note 10)

During the year the Group disposed of its wholly owned subsidiary Graft Polymer IP Ltd. As a result of this disposal intangible assets were impaired by way of significant know-how and intellectual property leaving the Group. As a result of this disposal the Directors have considered it appropriate to impair the intangible assets linked to this intellectual property to £0 (2024: £2,087,750)

Acquisition and treatment of the Awakn Group (Note 21)

In the year, the Company acquired the Awakn Group. A critical judgement was required as to whether this transaction constituted a business combination under IFRS 3 Business Combinations. Having assessed the acquired set of activities and assets, the Directors concluded that the acquisition did not meet the definition of a business at the acquisition date. In particular, the Directors determined that the acquired assets did not include a substantive process - the acquired inputs lacked an organised workforce and other critical processes that would significantly contribute to the ability to create outputs. Accordingly, the acquisition has been accounted for as an asset acquisition and subsequently appears as an intangible asset on the statement of financial position. No goodwill has been recognised, and transaction costs have been capitalised as part of the cost of the assets acquired. As a result of the classification as an intangible asset the Directors have performed an assessment at year end and concluded that no impairment is required in relation to the core assets.

 

Valuation of intangible asset (Note 10)

The intangible assets acquired as part of the Awakn Group has been valued at fair value less costs to disposal as per the recommendations outlined in IAS 38.

 

2.19     New standards and interpretations not yet adopted

At the date of approval of these financial statements, the following standards and interpretations which have not been applied in these financial statements were in issue but not yet effective (and in some cases have not yet been adopted by the UK):

Standard	Effective date	Overview
Amendment to IFRS 9 and IFRS 7   Classification and Measurement of Financial Instruments	1 January 2026 (early adoption permitted)	These amendments: ·      clarify the requirements for the timing of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system; ·      clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion; ·      add new disclosures for certain instruments with contractual terms that can change cash flows (such as some instruments with features linked to the achievement of environment, social and governance (ESG) targets); and ·      make updates to the disclosures for equity instruments designated at Fair Value through Other Comprehensive Income (FVOCI).
Amendment to IFRS 9 and IFRS 7   Power Purchase Agreements (PPAs)	1 January 2026 (early adoption permitted)	These amendments address power purchase agreements, commonly referred to as 'PPAs'. These too are pending adoption by the UK Endorsement Board. ·      The amendments outline the factors that an entity must consider when applying the 'own-use' exception under IFRS 9 to contracts for purchasing and taking delivery of renewable electricity. This is particularly relevant when the electricity source is dependent on natural factors and the purchaser faces significant volume risk.
IFRS 18 Presentation and Disclosure in Financial Statements	1 January 2027 (early adoption permitted)	This is the new standard on presentation and disclosure in financial statements, with a focus on updates to the statement of profit or loss. The key new concepts introduced in IFRS 18 relate to: ·      the structure of the statement of profit or loss; ·      required disclosures in the financial statements for certain profit or loss performance measures that are reported outside an entity's financial statements (that is, management-defined performance measures); and ·      enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general.
IFRS 19 Subsidiaries without Public Accountability: Disclosures	1 January 2027 (early adoption permitted)	This new standard works alongside other IFRS Accounting Standards. An eligible subsidiary applies the requirements in other IFRS Accounting Standards except for the disclosure requirements and instead applies the reduced disclosure requirements in IFRS 19. IFRS 19's reduced disclosure requirements balance the information needs of the users of eligible subsidiaries' financial statements with cost savings for preparers. IFRS 19 is a voluntary standard for eligible subsidiaries. A subsidiary is eligible if: ·      it does not have public accountability; and ·      it has an ultimate or intermediate parent that produces consolidated financial statements available for public use that comply with IFRS Accounting Standards. IFRS 19 can be applied as soon as it is issued.

The exclusion of these standards are not expected to have a material impact on these financial statements.

2.20     New standards and interpretations adopted

The standards and interpretations that are relevant to the Group, effective in this financial year are listed below. There has been no impact on the financial statements from the adoption of these standards.

Standard	Effective date	Overview
Amendments to IAS 21   Lack of Exchangeability	1 January 2025 (early adoption permitted)	An entity is impacted by the amendments when it has a transaction or an operation in a foreign currency that is not exchangeable into another currency at a measurement date for a specified purpose. A currency is exchangeable when there is an ability to obtain the other currency (with a normal administrative delay), and the transaction would take place through a market or exchange mechanism that creates enforceable rights and obligations.

 

3.         SEGMENT REPORTING

The Chief Operating Decision Makers are the Board of Directors. The Board reviews the Group's internal reporting in order to assess the performance of the Group. Management has determined the operating segments based on the reports reviewed by the Board and have determined that the Group operates solely in the United Kingdom and henceforth have not presented geographical segmental reporting.

4.         OPERATING COSTS AND ADMINISTRATIVE EXPENDITURE

			31-Dec-25	31-Dec-24
			£'000	£'000
Operational costs			-	(41)
Directors' fees			(294)	(354)
Professional fees			(872)	(704)
Consultants			(1,129)	-
Administrative expenses			(721)	(92)
			(3,016)	(1,150)

 

   The average number of persons employed by the Group (including directors) during the year ended 31 December 2025:

	2025	2024
Management	6	4
Non-management	-	-
	6	4

The highest paid director received total remuneration of approximately £723,000 (2024: £144,000) including any share-based payments.

 

5.         AUDITORS REMUNERATION

	Year ended 31 Dec 2025 £'000	Year ended 31 Dec 2024 £'000
Fees payable to the Group's auditor for the audit of parent company and consolidated financial statements	(36)	(35)
	(36)	(35)

 

6.         FINANCE COSTS

	Year ended 31 Dec 2025 £'000	Year ended 31  Dec 2024 £'000
Finance charge on leased assets	-	-
Interest on convertible loan	-	(64)
Finance costs	-	(64)

 

7.         TAXATION

No liability to income taxes arise in the period.

The current tax for the year differs from the loss before tax at a standard rate of corporation tax in the UK. A reconciliation of the tax charge is detailed below:

		Year ended 31 Dec 2025 £'000	Year ended 31 Dec 2024 £'000
The charge for year is made up as follows:
Corporation tax on the results for the year		-	-
A reconciliation of the tax charge appearing in the income statement to the tax that would result from applying the standard rate of tax to the results for the year is:
Loss per the financial statements		(5,740)	(1,447)
Tax credit at the weighted average of the standard rate of corporation tax in UK of 25% - (31 Dec 2024: 25%)		(1,435)	(362)
Non-deductible expenses		709	79
Current year losses for which no deferred tax asset is recognised		726	283
Income tax charge for the year		-	-

Deferred tax assets carried forward have not been recognised in the accounts because there is currently insufficient evidence of the timing of suitable future taxable profits against which they can be recovered. The accumulated tax losses are estimated to amount to approximately £6.681m (31 Dec 2024: £3.086m) and the carried forward deferred tax asset is estimated to amount to approximately £1.670m (31 Dec 2024: £0.770m).

No deferred tax assets in respect of tax losses have not been recognised in the accounts because there is currently insufficient evidence of the timing of suitable future taxable profits against which they can be recovered.

8.         Other comprehensive income

Items credited to the other comprehensive income line in the statement of comprehensive income relate to the impact of foreign exchange movements when translating the statement of financial position from functional to presentational currencies on consolidation. The corresponding movement is offset against the foreign exchange reserve in the statement of financial position.

	Year ended 30 September 2025	Period ended 30 September 2024
	£'000	£'000
Foreign currency movements	(170)	62
	(170)	62

 

9.         EARNINGS PER SHARE

The calculation of the basic and diluted earnings per share is calculated by dividing the profit or loss for the year by the weighted average number of ordinary shares in issue during the period.

	Year ended 31 Dec 2025	Year ended 31 Dec 2024
Loss for the year from continuing operations - £'000	(5,740)	(1,447)
Weighted number of ordinary shares in issue	4,864,719,811	1,156,732,090
Basic earnings per share from continuing operations - pence	(0.12)	(0.125)

There is no difference between the diluted loss per share and the basic loss per share presented. Share options and warrants could potentially dilute basic earnings per share in the future but were not included in the calculation of diluted earnings per share as the Group was loss making and therefore the options and warrants are anti-dilutive for the year presented.

 

 

 

 

 

10.       INTANGIBLE ASSETS

 

	Note	Company £'000	Group £'000
Cost and carrying value - 1 January 2024		2,068	2,068
Additions		20	20
Impairment		-	-
At 31 December 2024		2,088	2,088
Additions:
Acquisition of intellectual property1	21	-	5,842
Impairment2		-	(175)
Impairment		(2,088)	(2,088)
At 31 December 2025		-	5,667

 

¹On 27 May 2025, the Company acquired the entire share capital of Awakn Life Sciences Corp and all of its subsidiaries (collectively the "Awakn Group") which can be evidenced in detail at Note 21. With it Solvonis acquired intellectual property related to mental health disorders which it plans to develop and bring to market. The transaction has been evaluated and assessed as an asset acquisition due to the absence of a substantive process which is detailed at note 21.

 

²Per IAS 38 accounting standards, intangible assets have been valued at fair value less costs of disposal. Although the Board do not believe the assets to be impaired in any way, to align with this standard a small impairment charge has been processed to recognise estimated costs of disposal.

 

The Board has performed an assessment of the intangible assets and concluded that at year end there are no indicators that would suggest the core assets are impaired. The Board will continue to assess the intangible assets at regular intervals for signs of impairment and impair them if required.

 

11.       OTHER NON-CURRENT ASSESTS

	Note	Company £'000	Group £'000
Cost and carrying value - 1 January 2024		-	13
Additions		300	300
Impairment		-	(13)
At 31 December 2024		300	300
Additions		-	-
Consideration for acquisition on Awakn Group	21	(300)	(300)
At 31 December 2025		-	-

On 27 May 2025, the Company acquired the entire share capital of Awakn Life Sciences Corp and all of its subsidiaries (collectively the "Awakn Group") and can be evidenced in detail at Note 21. In addition to share consideration Solvonis also agreed to extinguish an existing receivable owed from the Awakn Group and hence is included in the consideration paid for the Awakn Group.

 

12.       INVESTMENTS

Company

	Note	£'000
Cost and carrying value - 1 January 2024		-
At 31 December 2024		-
Additions:
Awakn Life Sciences Corp	21	4,162
Incorporation of subsidiaries1		2
At 31 December 2025		4,164

¹Immaterial investments were made in the year into new wholly owned subsidiaries Solvonis Therapeutics UK R&D Limited and Solvonis Therapeutics US R&D Limited.

*Immaterial investment in Graft Polymer IP Limited & GraftBio Limited of £1 each disposed of in the year.

 

Company subsidiary undertakings

At year end the Group owned interests in the following subsidiary undertakings, which are included in the consolidated financial statements:

Name	Business Activity	Country of Incorporation	Registered Address	Percentage Holding
Awakn Life Sciences Corp	Holding Co	Canada	301-217 Queen St, Toronto, Ontario M5V 0R2	100%
Awakn Life Sciences Inc	Holding Co	Canada	301-217 Queen St, Toronto, Ontario M5V 0R2	100%
Solvonis Therapeutics UK R&D Limited	Holding Co	UK	Eccleston Yards, 25 Eccleston Place, London, SW1W 9NF	100%
Solvonis Therapeutics US R&D Limited	Holding Co	USA	838 Walker Rd, Suite 21-2, 19904	100%
1233705. Ltd	Holding Co	Canada	301-217 Queen St, Toronto, Ontario M5V 0R2	100%
Solvonis Therapeutics Ireland Holdings Limited	Holding Co	Ireland	90 Leinster Rd, Dublin, D06F3P4	100%
Solvonis Therapeutics Ireland R&D Ltd	Holding Co	Ireland	90 Leinster Rd, Dublin, D06F3P4	100%
Awakn LS Partnerships Limited	Holding Co	Ireland	90 Leinster Rd, Dublin, D06F3P4	100%

 

 

13.       INTERCOMPANY RECEIVABLES

	Company £'000
Cost and carrying value - 1 January 2024	-
At 31 December 2024	-
Additions	883
Impairment of intercompany receivables	(883)
At 31 December 2025	-

 

14.       CASH AND CASH EQUIVALENTS

		Company			Group
		31-Dec-25	31-Dec-24		31-Dec-25	31-Dec-24
		£'000	£'000		£'000	£'000
Cash and cash equivalents		1,698	757		1,720	757

 

15.       TRADE AND OTHER RECEIVABLES

		Company			Group
		31-Dec-25	31-Dec-24		31-Dec-25	31-Dec-24
		£'000	£'000		£'000	£'000
Prepayments		21	22		47	22
VAT receivable		45	30		51	30
Other current assets		100	6		100	6
		166	58		198	58

 

16.       BORROWINGS

	£'000
Cost and carrying value - 1 January 2024	-
At 31 December 2024	-
Additions:
Liabilities acquired on Awakn Acquisition	75
At 31 December 2025	75

 

The borrowings are interest-free, have no fixed repayment terms, and are not subject to any financial or non-financial covenants

 

 

17.       TRADE AND OTHER PAYABLES

		Company			Group
		31-Dec-25	31-Dec-24		31-Dec-25	31-Dec-24
		£'000	£'000		£'000	£'000
Trade creditors		238	83		406	83
Accruals		54	36		54	36
Payroll liabilities		13	-		13	-
Other current liabilities		-	-		7	-
		305	119		480	119

 

18.       TRADE AND OTHER PAYABLES - NON-CURRENT

		Company			Group
		31-Dec-25	31-Dec-24		31-Dec-25	31-Dec-24
		£'000	£'000		£'000	£'000
Other non-current liabilities		-	-		839	-

As a result of the Awakn Group acquisition various historical liabilities were assumed. These liabilities have been classified as non-current as they are not expected to fall due in the next 12 months.

19.       SHARE CAPITAL

Change in issued Share Capital and Share Premium:

	Number of shares	Share     capital	Share premium	Total
Ordinary shares		£'000	£'000	£'000
Balance at 1 January 2024	104,097,299	41	7,001	7,042
Share issue at placing price of 0.6 pence	20,666,667	21	103	124
Share issue at placing price of 0.1 pence	1,800,000,000	1,800	-	1,800
Share issue on conversion of loan	264,000,000	264	-	264
Share issue to settle outstanding fees	59,666,667	60	299	359
Share issue to settle outstanding fees	47,500,000	47	-	47
Share issue costs	-	-	(41)	(41)
Balance at 31 December 2024	2,295,930,633	2,233	7,362	9,595
Shares issued on acquisition of Awakn Group	2,074,378,528	2,074	1,348	3,422
Fundraise shares issued alongside acquisition	1,538,461,529	1,538	462	2,000
Fundraising shares	712,121,210	712	1,538	2,250
Shares in Lieu of fees	165,511,593	166	199	365
Exercise of warrants	20,000,000	20	-	20
Share issue costs	-	-	(39)	(39)
Balance at 31 December 2025	6,806,403,493	6,743	10,870	17,613

 

 

20.       SHARE BASED PAYMENTS RESERVE

		Company £'000			Group £'000
At 31 December 2023			1,227		1,227
LTIP options			22		22
Director warrants issued			295		295
At 31 December 2024			1,544		1,544
Issue of LTIP options			537		537
Issue of warrants to Awakn shareholders			440		440
Release of prior year LTIP charge			22		22
At 31 December 2025			2,543		2,543

 

Options

The following table lists the Black Scholes inputs to the model used for valuation of the options:

		0.34p options	0.16p options		0.1p options
Grant date		31/10/25		31/10/25		31/10/25
Number		42,000,000		21,000,000		180,000,000
Vesting		Time conditions1		Time conditions1		Immediate
Dividend yield (%)		0%		0%		0%
Expected volatility (%)		143%		143%		143%
Risk-free interest rate (%)		3.784%		3.784%		3.784%
Time to maturity		3 years		3 years		5 years
Exercise price (£)		0.0034		0.0016		0.001
Share price at grant date (£)		0.0031		0.0031		0.0031

¹ Issue options to board members are allocated in 3 equal tranches with vesting conditions as per below:

-        1/3^rd of options vest on grant date

-        1/3^rd on the first anniversary of grant date

-        1/3^rd on second anniversary of grant date

	As at 31 December 2025
	Weighted average exercise price	Number of options
Brought forward at 1 January 2025	0.1p	55,000,000
Granted in period	0.1p	180,000,000
Granted in period	0.34p	42,000,000
Granted in period	0.16p	21,000,000
Outstanding at 31 December 2025		298,000,000
Exercisable at 31 December 2025		237,666,667

The weighted average time to expiry of the options as at 31 December 2025 is 1,398 days. The weighted average exercise price of the warrants outstanding is 0.138p (£0.00138).

Warrants

As a result of the acquisition of the Awakn Group the following warrants were issued to shareholders of Awakn.

The following table lists the Black Scholes inputs to the model used for valuation of the warrants:

	1p warrants1	1.1p warrants2
Grant date	27/05/25	27/05/25
Number	441,603,804	261,861,628
Vesting	Immediate	Immediate
Dividend yield (%)	0%	0%
Expected volatility (%)	143%	143%
Risk-free interest rate (%)	3.975%	3.6%
Time to maturity	2 - 4 years	2-4 years
Exercise price (£)	0.01	0.011
Share price at grant date (£)	0.0013	0.0013

 

	As at 31 December 2025
	Weighted average exercise price	Number of warrants
Brought forward at 1 January 2025		307,589,147
Lapsed in period	1p	(13,089,147)
Granted in period1	1p	441,603,804
Granted in period2	1.1p	261,861,628
Outstanding at 31 December 2025		977,965,432
Exercisable at 31 December 2025		977,965,432

The weighted average time to expiry of the warrants as at 31 December 2025 is 775 days. The weighted average exercise price of the warrants outstanding is 0.77p (£0.0077).

21.       ASSET ACQUISITION

Acquisition of Awakn Life Sciences Group

On 27 May 2025, Solvonis acquired all of the common shares of Awakn Corp Life Sciences ("Awakn"), restricted share units of Awakn ("RSUs") and deferred share units of Awakn ("DSUs") pursuant to a plan of arrangement under section 288 of the Business Corporations Act (British Columbia).

To determine the accounting treatment the Directors, need to consider whether Awakn constitutes a business.

Under IFRS 3 a business is an "integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing goods or services to customers or generating income from ordinary activities."

To determine this a business must have 3 elements listed below:

i)          Inputs: economic resources that create outputs

ii)         Processes: systems, standards or protocols that when applied to an input can create outputs

iii)         Outputs: the result of inputs and processes

On analysis of Awakn, the Directors have concluded that it does not have the 3 elements listed above and subsequently does not have a substantive process to suggest the existence of a business. As a result, the acquisition of Awakn is treated as an asset acquisition and in line with IFRS is accounted for as an intangible assets in the financial statements.

The details of the acquisition of Awakn are as follows:

Fair value of consideration transferred	£'000
Consideration (2,074,378,528 million shares in Solvonis @ £0.00165)	3,422
Value of warrants issued as part of acquisition	440
Extinguishment of Awakn debtor	300
Total	4,162
Recognised amounts of identifiable net assets / (liabilities) at book value
Cash and cash equivalents	8
Trade and other receivables	65
Trade and other payables	(1,680)
Loans and other borrowings	(73)
Total	(1,680)
Intangible asset on acquisition	5,842

 

2024 - Discontinued operations

A discontinued operation is a component of the Group that has been disposed of or classified as held for sale and that represents a separate major line of business or geographical area of operation, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately on the face of the Statement of Comprehensive Income.

The Board recently undertook a review of its business and operations, pursuant to which it was decided that the Slovenian operation, Graft Polymer D.O.O (principally, an industrial polymer products manufacturer), was considered no longer commercially viable due to forecasted negative cashflow as a result of falling sales and rising costs, with no immediate prospect of becoming profitable in the short to medium term. The Group disposed of Graft Polymer D.O.O on 2 May 2024. A gain on deconsolidation as at date of disposal of £125,000 was recognised and taken to the Statement of Comprehensive Income.

Gain on deconsolidation of Graft Polymer D.O.O
	2 May 2024 £'000
Consideration received
Cash	-
Carrying amount of net liabilities sold	16
	16
Reclassification of foreign exchange reserve	109
Gain on deconsolidation	125

 

 

Financial Performance for Graft Polymer D.O.O
	Four months to 2 May 2024 £'000	31 December 2023 £'000
Revenue	221	587
Cost of sales	(148)	(329)
Gross profit	73	258
Operational costs	(17)	(66)
Depreciation	(58)	(179)
Administrative expenses	(140)	(518)
Asset write down	-	(838)
Operating loss	(142)	(1,343)
Finance costs	(1)	(3)
Loss before taxation	(143)	(1,346)
Income tax	-	-
Loss for the period from discontinuing operations	(143)	(1,346)
Assets and liabilities of Graft Polymer D.O.O
	2 May 2024 £'000	31 December 2023 £'000
Non-current assets
Right of use assets	38	39
Other non-current assets	13	13
Total non-current assets	51	52
Current assets
Cash and cash equivalents	13	143
Trade and other receivables	44	78
Inventory	11	50
Total current assets	68	271
TOTAL ASSETS	119	323
Non-current liabilities
Lease liability	-	22
Total non-current liabilities	-	22
Current liabilities
Trade and other payables	71	132
Deferred income	36	93
Lease liability	28	12
Total current liabilities	135	237
Total liabilities	135	259
NET ASSETS	(16)	64

 

Cashflow of Graft Polymer D.O.O
	2 May 2024 £'000	31 December 2023 £'000
Cash flow from operating activities
Loss before tax	(143)	(1,346)
Adjustments for:
Depreciation	58	165
Finance expenses	-	3
Amortisation of right of use assets	-	12
Fixed asset write off	(58)	736
Inventory write off	-	117
Changes in working capital:
Decrease/(Increase) in trade and other receivables	33	(26)
(Decrease)/Increase is trade and other payables	(54)	234
Movements in inventory	39	14
Net cash outflow from operating activities	(125)	(91)
Cash flow from investing activities
Purchase of property, plant and equipment	-	(216)
Repayment on right of use assets	(4)	(16)
Loans to subsidiary	-	393
Net cash flow from investing activities	(4)	161
Net increase in cash and cash equivalents	(129)	70
Cash and cash equivalents at beginning of period	142	89
Foreign exchange effect on cash balance	-	(26)
Cash and cash equivalents at end of period	13	133

 

22.       FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Capital Risk Management

The Company manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders. The overall strategy of the Company and the Group is to minimise costs and liquidity risk while still executing on the Group's overall business strategy.

The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued share capital, foreign exchange reserves and retained earnings as disclosed in the Consolidated Statement of Changes of Equity.

The Group is exposed to risk through its normal operations, the most significant of which are foreign exchange and liquidity risks. Sensitivity analysis has not been performed because the potential impact is not considered material. The management of these risks is vested to the Board of Directors.

Currency Risk

The Group operates in a global market with cost possibly arising in a number of currencies and is exposed to foreign currency risk arising from commercial transactions, translation of assets and liabilities and net investment in foreign subsidiaries. Exposure to commercial transactions arise from purchases by operating companies in currencies other than the Companies' functional currency. Currency exposures are reviewed regularly.

The Group has exposure to foreign exchange risk through research and development expenditure that is incurred in international markets as well as their foreign currency denominated cash balances.

Accordingly, movements in the Sterling exchange rate against these currencies could have a detrimental effect on the Group's results and financial condition. Such changes are not considered likely to have a material effect on the Group's financial position at 31 December 2025. Funds of the parent company are held with HSBC, one of the largest and most reputable high street banks in the UK.

The table below shows the currency profiles of cash and cash equivalents:

		31 Dec 2025 £'000	31 Dec 2024 £'000
Cash and cash equivalents
Sterling		1,372	757
USD		325	-
CAD		23	-
		1,720	757

Liquidity Risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the group's reputation.

The Group seeks to manage liquidity risk by regularly reviewing cash flow budgets and forecasts to ensure that sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. The Group deems there is sufficient liquidity for the foreseeable future.

The Group had cash and cash equivalents at period end as below:

		31 Dec 2025 £'000	31 Dec 2024 £'000
Cash and cash equivalents		1,720	757
		1,720	757

The table below sets out the maturity profile of the financial liabilities at 31 December:

		31 Dec 2025 £'000	31 Dec 2024 £'000
Due in less than one month		(104)	(50)
Due between one and three months		(127)	(9)
Due between three months and one year		(175)	(24)
		(406)	(83)

 

23.       FINANCIAL ASSETS AND FINANCIAL LIABILITIES

		Company			Group
		31-Dec-25	31-Dec-24		31-Dec-25	31-Dec-24
		£'000	£'000		£'000	£'000
Cash and cash equivalents		1,698	757		1,720	757
Trade and other receivables		147	35		151	36
Trade and other payables		(251)	(83)		(426)	(83)
		1,594	709		1,445	710

¹ Trade and other receivables excludes prepayments

² Trade and other payables excludes accruals, taxes and social security

24.       CAPITAL COMMITMENTS

University of Exeter

On 16 December 2026, the Company agreed with the University of Exeter to enter into an agreement to fund the final stages of the "MORE-KARE" project. The agreement runs until November 2026 and will cost the Group an additional £1million. The Company has the option to purchase the license for the More-Kare trial from the University of Exeter after two years. In this event the additional £1millon would be offset against any purchase price.

 

25.       RELATED PARTY TRANSACTIONS

Details of directors' emoluments are set out below:

Director	Base salary £'000	Service fees  £'000	Total £'000
Anthony Tennyson	175	20	195
Nicholas Nelson	35	-	35
Dennis Purcell	40	-	40
Renata Crome	20	-	20
Paul Carter	4	-	4
	274	20	294

Alpha Tango Limited

During the period the Group paid a total of £21,000 to Alpha Tango Limited for CEO services. Anthony Tennyson is a director of Alpha Tango Limited.

26.       EVENTS SUBSEQUENT TO PERIOD END

7 Jan 2026 - US Patent Allowance | PTSD Programme

USPTO granted a Notice of Allowance for Solvonis' SVN-SDN-14 PTSD  for a series of compounds within its proprietary SVN-SDN-14 Post-Traumatic Stress Disorder ("PTSD") discovery programme

 

28 Jan 2026 - SVN-015 Expanded into Depression

Solvonis announced the expansion of its investigational compound SVN-015 into the treatment of depression, supported by preclinical data demonstrating antidepressant-like activity benchmarked against fluoxetine.

 

 

 

10 Mar 2026 - SVN-114 Selected as PTSD Lead Candidate

Solvonis announced the selection of SVN-114 as the lead candidate from the Company's proprietary SVN-SDN-14 discovery programme targeting Post-Traumatic Stress Disorder ("PTSD").

 

31 Mar 2026 - US Patent Granted

Solvonis announced that it had been granted a U.S. patent by the United States Patent and Trademark Office ("USPTO") covering a monoamine modulator compound series arising from its proprietary post-traumatic stress disorder ("PTSD") discovery programme.

 

8 Apr 2026 - Second US Patent Granted

Solvonis announced that it had been granted a second U.S. patent by the United States Patent and Trademark Office ("USPTO") covering a further monoamine modulator compound series arising from its proprietary post-traumatic stress disorder ("PTSD") discovery programme.

 

22 Apr 2026 - Appointment of Water Tower Research

Solvonis  announced the appointment of Water Tower Research LLC to support the Company in three areas of increasing importance: deepening its understanding of the evolving U.S. market environment, refining its corporate profile in that market, and broadening intuitional investor reach.

 

27.       CONTROL

In the opinion of the Directors as at the year end and the date of these financial statements there is no single ultimate controlling party.