OKYO Pharma(OKYO) - 2023 Q4 - Annual Report

FORM 20-F Filing Information This report is an Annual Report on Form 20-F for OKYO Pharma Limited, an Emerging Growth Company, for the fiscal year ended March 31, 2023 General Information This document is an Annual Report on Form 20-F for OKYO Pharma Limited, filed for the fiscal year ended March 31, 2023. The company is incorporated in Guernsey and its American Depositary Shares are registered on the Nasdaq Capital Market. OKYO Pharma Limited is classified as an Emerging Growth Company - The report is an Annual Report on Form 20-F for the fiscal year ended March 31, 2023[2] - OKYO Pharma Limited is incorporated in Guernsey and its American Depositary Shares (ADSs) are listed on the Nasdaq Capital Market[4][5] - The registrant is an Emerging Growth Company (EGC)[10] Table of Contents This section provides a comprehensive list of all chapters and sub-sections within the Annual Report on Form 20-F Introduction This section defines key terms and conventions used throughout the Annual Report, including company references and currency denominations Definitions and Conventions This section defines key terms used throughout the Annual Report, such as 'OKYO' referring to OKYO Pharma Ltd and its subsidiary. It also clarifies currency references (U.S. dollars and Pounds Sterling) and general legislative interpretation rules - References to 'OKYO,' 'OKYO Pharma Ltd,' 'the company,' 'we,' 'us' and 'our' refer to OKYO Pharma Ltd and its wholly owned subsidiary, OKYO Pharma Inc[19] - All references to 'U.S. dollars' or 'US$' or '$' or 'cents' are to the currency of the United States of America, and 'Pounds Sterling' or 'Sterling' or '£' or 'pence' are to the currency of the United Kingdom[21] Presentation of Financial Information and Other Data This section outlines the financial reporting standards and currency used, noting IFRS compliance and U.S. dollar presentation with specific exchange rates Financial Reporting Standards and Currency The company's audited consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the IASB, not U.S. GAAP. Financial information is presented in U.S. dollars, with translations from Pounds Sterling provided at a specific exchange rate for convenience - Audited consolidated financial statements are prepared in accordance with IFRS as issued by the IASB, not U.S. GAAP[25] - Financial information is presented in United States dollars. Translations from Pounds Sterling into U.S. dollars were made at the rate of £1.00 to $1.3113 as of July 14, 2023[26] Cautionary Statement Regarding Forward-Looking Statements This section warns that the Annual Report contains forward-looking statements subject to significant risks and uncertainties, with actual results potentially differing materially Forward-Looking Statements and Risks This section highlights that the Annual Report contains forward-looking statements subject to substantial risks and uncertainties. These statements cover future operations, financial position, revenues, costs, and product development, and readers are cautioned that actual results may differ materially due to factors discussed in the 'Risk Factors' section - All statements other than historical facts, including those regarding strategy, future operations, financial position, revenues, costs, prospects, plans, and objectives, are forward-looking statements[29] - These statements involve known and unknown risks, uncertainties, and other important factors that may cause actual results to be materially different from the information expressed or implied[29] - Readers should refer to the 'Risk Factors' section for a discussion of important factors that may cause actual results to differ materially[30] PART I Item 1: Identity of Directors, Senior Management and Advisers This item is marked as 'Not Applicable', indicating that information regarding directors, senior management, and advisers is not provided in this section - This item is explicitly stated as 'Not Applicable'[34] Item 2: Offer Statistics and Expected Timetable This item is marked as 'Not Applicable', indicating no offer statistics or expected timetable disclosures in this section - This item is explicitly stated as 'Not applicable'[34] Item 3: Key Information This section provides selected financial data, capitalization, indebtedness, reasons for any offer, use of proceeds, and a comprehensive overview of risk factors A. Selected Financial Data The selected financial data for the years ended March 31, 2023, 2022, and 2021 are derived from IFRS-compliant consolidated financial statements, presented in U.S. dollars - Consolidated financial statements are prepared in accordance with IFRS, as issued by the IASB, and audited by PCAOB standards[35] - The functional currency is Pound Sterling, but financial statements are translated into U.S. dollars for reporting purposes[36] Consolidated Statement of Operations and Comprehensive Loss Data (in thousands) | Metric | 2023 | 2022 (restated) | 2021 (restated) | | :-------------------------- | :----- | :-------------- | :-------------- | | Research and development | $ (6,338) | $ (1,609) | $ (348) | | General and administrative | (6,849) | (4,608) | (3,018) | | Total operating expenses | (13,187) | (6,217) | (3,366) | | Loss from operations | (13,187) | (6,217) | (3,366) | | Other income (expense) | (97) | - | (12) | | Tax credit | 12 | 786 | 25 | | Net loss attributable to ordinary shareholders | (13,272) | (5,431) | (3,353) | | Foreign currency translation adjustment | (441) | (837) | 346 | | Total comprehensive loss | (13,713) | (6,268) | (3,007) | | Basic and diluted net loss per ordinary share | (0.60) | (0.36) | (0.32) | Consolidated Balance Sheet Data The consolidated balance sheet data presents the company's financial position, including cash, working capital, total assets, and shareholders' equity for fiscal years 2021-2023 Consolidated Balance Sheet Data (in thousands) | Metric | As of March 31, 2023 | As of March 31, 2022 | As of March 31, 2021 | | :------------------------ | :------------------- | :------------------- | :------------------- | | Cash and cash equivalents | $ 4,045 | $ 2,701 | $ 6,889 | | Working capital | (2,060) | 2,942 | 5,280 | | Total assets | 5,204 | 4,301 | 7,091 | | Total shareholders' equity/(deficit) | (2,053) | 2,947 | 5,319 | - Working capital is defined as current assets less current liabilities[42] B. Capitalization and Indebtedness This item is marked as 'Not applicable', indicating no specific disclosures on capitalization and indebtedness in this section - This item is explicitly stated as 'Not applicable'[43] C. Reasons for the Offer and Use of Proceeds This item is marked as 'Not applicable', indicating no specific disclosures on reasons for any offer or use of proceeds in this section - This item is explicitly stated as 'Not applicable'[44] D. Risk Factors The company faces significant risks across its business, financial position, commercialization efforts, intellectual property, operations, government regulation, and securities ownership - Product candidates (OK-101 and OK-201) are in early development, and revenue generation is not expected for several years, if ever, with a high degree of failure in clinical trials[47][48][49] - The company will need to raise substantial additional capital to develop and commercialize product candidates, with a cash and cash equivalents balance of approximately $4.0 million and a working capital deficit of approximately $2 million as of March 31, 2023[54] - Significant competition exists from pharmaceutical companies with greater resources, and commercial success is not guaranteed even with regulatory approval due to market acceptance, pricing, and intellectual property challenges[63][65][73] - The company is dependent on third parties for supply, development, manufacturing, and clinical services, creating risks related to control, compliance, and potential disruptions[66][67][68] - Regulatory approval is lengthy, expensive, and uncertain, with risks of delays, limited indications, and ongoing post-approval requirements, including compliance with cGMP and potential sanctions[107][108][109] - As a Foreign Private Issuer (FPI) and Emerging Growth Company (EGC), the company is exempt from certain U.S. securities laws and Nasdaq corporate governance rules, which may provide less information and protection to U.S. investors[175][177][181] Item 4: Information on the Company This section details the company's history, business overview, organizational structure, and property, plant, and equipment, focusing on its inflammatory eye disease pipeline A. History and Development of the Company OKYO Pharma Limited was incorporated in the British Virgin Islands in 2007, underwent several name changes, and migrated to Guernsey in 2018, where it was listed on the London Stock Exchange - Originally incorporated in the British Virgin Islands on July 4, 2007, as Jellon Enterprises, Inc[220] - Changed names multiple times, including Minor Metals & Mining, Inc., Emerging Metals Limited, West African Minerals Corporation, and OKYO Pharma Corporation[220] - Migrated to Guernsey and registered as OKYO Pharma Limited on July 3, 2018, and was admitted to trading on the Main Market of the London Stock Exchange on July 17, 2018[222] B. Business Overview OKYO Pharma is a clinical-stage biopharmaceutical company focused on inflammatory eye diseases and ocular pain, with lead candidate OK-101 in Phase 2 clinical trials for dry-eye disease - OKYO Pharma is a clinical-stage biopharmaceutical company developing therapeutics for inflammatory eye diseases and ocular pain, focusing on a novel G Protein-Coupled Receptor (GPCR)[226] - OK-101, the lead clinical product candidate, is in Phase 2 clinical trials for dry-eye disease (DED) and is also being evaluated for ocular neuropathic pain, uveitis, and allergic conjunctivitis[226][228][234] - OK-201, a lipidated-peptide preclinical analogue, is currently in the developmental stage, with primary focus shifted to the OK-101 program due to its combined anti-inflammatory and pain-reducing activities[226][251] - The company's intellectual property includes 8 issued patents and 15 pending patent applications for OK-101 (chemerin fragments/analogs) and OK-201 (lipidated BAM8-22 peptides), with expiration dates ranging from 2034 to 2043[253][254][255] OK-101 Development Milestone Payments | Milestone | Payment | | :------------------------------------------ | :-------- | | First patient enrolled in Phase I clinical trial | $300,000 | | First patient enrolled in Phase II clinical trial | $600,000 | | First patient enrolled in Phase III clinical trial | $1,500,000 | | First commercial sale of a licensed product | $2,500,000 | OK-101 Sales Milestone Payments | Annual Net Sales Achievement | Payment | | :----------------------------- | :-------- | | $50,000,000 | $2,000,000 | | $100,000,000 | $4,000,000 | | $250,000,000 | $6,000,000 | | $500,000,000 | $10,000,000 | | $1,000,000,000 | $15,000,000 | Overview OKYO Pharma is a clinical-stage biopharmaceutical company focused on developing next-generation therapeutics for inflammatory eye diseases and ocular pain, with a research program centered on a novel G Protein-Coupled Receptor (GPCR) - The company is a clinical-stage biopharmaceutical company developing therapeutics for inflammatory eye diseases and ocular pain[226] - Research focuses on a novel G Protein-Coupled Receptor (GPCR) believed to be key in inflammatory eye disease pathology[226] OK-101 OK-101 is OKYO's lead clinical product candidate for dry-eye disease (DED), currently in a Phase 2 clinical study initiated in May 2023 after FDA IND clearance - OK-101 is the lead clinical product candidate, focused on keratoconjunctivitis sicca (Dry Eye Disease, DED)[228] - DED affects approximately 20 million people in the U.S., with the global market estimated at $5.22 billion in 2019, projected to reach $6.54 billion by 2027[228] - Received FDA clearance for an IND application on December 22, 2022, to initiate a Phase 2, first-in-human, clinical study for DED[233] - The Phase 2 trial for OK-101 in DED patients (200-240 patients) commenced screening in May 2023 and dosing in June 2023, with expected completion in 6-8 months[234][235] Additional Applicable Disease Indications for OK-101 OK-101 is being explored for neuropathic corneal pain (NCP), uveitis, and allergic conjunctivitis, with a 40-patient clinical trial for NCP planned for Fall 2023 - OK-101 is being explored for neuropathic corneal pain (NCP), uveitis, and allergic conjunctivitis[236][244][246] - Preclinical animal model experiments demonstrated OK-101's ability to suppress corneal neuropathic pain, similar to gabapentin[238] - A 40-patient open-label clinical trial for OK-101 in NCP is planned to start in Fall 2023, with IND filing in Q4 2023[241] - Preclinical 'proof-of-concept' studies are planned for uveitis and allergic conjunctivitis to evaluate OK-101's anti-inflammatory potential[245][246] OK-201 OK-201, a lipidated BAM8-22 analogue, is maintained at an exploratory level, with the company prioritizing the OK-101 program despite positive preclinical results for neuropathic pain - OK-201 is the lead compound from a license agreement with Tufts Medical Center for lipidated BAM8-22 analogues to treat neuropathic pain[248] - Preclinical studies demonstrated OK-201's efficacy as a non-opioid analgesic for ocular pain, comparable to gabapentin[250] - Development of OK-201 is currently maintained at an exploratory level, with primary focus shifted to the OK-101 program[251] Intellectual Property The company relies on intellectual property protection, including 8 issued patents and 15 pending applications for OK-101 and OK-201, with expiration dates ranging from 2034 to 2043 - As of August 1, 2023, the company's intellectual property included 8 issued patents and 15 pending patent applications in the U.S. and abroad[253] - Issued U.S. patents for lipidated chemerin fragments (OK-101) for neuropathic pain and DED have statutory expiration dates of March 13, 2034, and January 23, 2037, respectively, with potential extensions[254] - Issued U.S. patent for lipidated BAM8-22 peptides (OK-201) has a statutory expiration date of November 9, 2036, with potential extension[255] - The company also relies on know-how, trade secrets, and confidentiality agreements to protect proprietary information[258] License Agreement for OK-101 OKYO Pharma holds exclusive worldwide rights to Chemerin-related patents for ocular inflammation and DED, involving development and sales milestone payments, plus low single-digit royalties - OKYO Pharma has exclusive worldwide rights to Chemerin-related patents for ocular inflammation and DED, licensed from OTT and sublicensed from TMC[259][260] OK-101 Development Milestone Payments | Milestone | Payment | | :------------------------------------------ | :-------- | | First Patient Enrolled in a Phase I clinical trial | $300,000 | | First Patient Enrolled in a Phase II clinical trial | $600,000 | | First Patient Enrolled in a Phase III clinical trial | $1,500,000 | | First commercial sale of a licensed product | $2,500,000 | OK-101 Sales Milestone Payments | Annual Net Sales Achievement | Payment | | :----------------------------- | :-------- | | $50,000,000 | $2,000,000 | | $100,000,000 | $4,000,000 | | $250,000,000 | $6,000,000 | | $500,000,000 | $10,000,000 | | $1,000,000,000 | $15,000,000 | - Payments equate to low and declining single-digit percentage royalties on net sales[261] OK-201 (License Agreement) The company holds an exclusive license from Tufts Medical Center for lipidated BAM peptides for neuropathic pain, requiring upfront, annual maintenance, and milestone payments, plus royalties - Exclusive license from Tufts Medical Center for intellectual property on lipidated BAM peptides for neuropathic pain, acquired on May 1, 2018[265] - The license requires an upfront fee of $15,000 and annual maintenance fees of $15,000 (decreasing to $10,000 after three years) until first commercial sale, plus development/sales milestones and royalties[265] - U.S. Patent No. 10,899,796, 'Compounds and Methods for Treating Pain,' issued in February 2021, covers lipidated BAM peptides for neuropathic pain, ocular pain, and ocular inflammation/DED, expiring in early 2036[266] Government Regulation Pharmaceutical product development and commercialization are extensively regulated in the EU and US, involving lengthy preclinical and clinical stages, marketing authorization, and strict post-approval oversight - Drug development is a highly structured process, typically taking over ten years, divided into preclinical and clinical stages (Phase 1, 2, 3), with increasing complexity and cost[267][268] - Regulatory approval (e.g., MA in EU, NDA/BLA in US) is required for commercialization, followed by ongoing post-marketing regulations for manufacturing (cGMP), labeling, advertising, and safety reporting[269][270][298][299] - Orphan drug designation provides incentives and market exclusivity (7 years in US, 10 years in EU) but does not guarantee approval or protection from competition by different or clinically superior drugs[295][296][116] - Healthcare legislative reforms (e.g., PPACA in the US) and cost-containment measures by governments and third-party payers can significantly impact product pricing, coverage, and reimbursement, affecting profitability[129][130][136][301][302] - The company is subject to stringent and evolving data privacy laws (e.g., GDPR, CCPA, HIPAA) globally, requiring robust compliance mechanisms and posing risks of fines, litigation, and reputational harm for non-compliance[142][144][147][148][149] C. Organizational Structure The company's organizational structure consists of OKYO Pharma Limited as the parent company and its sole wholly-owned subsidiary, OKYO Pharma US Inc., a clinical-stage biotechnology company Company Subsidiary | Name | Principal activity | Registered address | Percentage shareholding | Country of incorporation | | :---------------- | :----------------------- | :-------------------------------- | :---------------------- | :----------------------- | | OKYO Pharma US Inc. | Clinical stage biotechnology company | 420 Lexington Avenue Suite 1402 New York, NY 10170 | 100% | USA | D. Property, Plant and Equipment The company's material tangible fixed assets primarily consist of a leased CEO office in New York, with the company confident in securing additional space as needed Property, Plant and Equipment | Location | Tenure | Principal use | | :-------------------------------- | :------- | :------------ | | 420 Lexington Avenue Suite 1402 New York, NY 10170 | 6 Months | CEO Office | - The company believes suitable additional or substitute space will be available to accommodate future expansion[312] Item 4A: Unresolved Staff Comments This item is marked as 'Not applicable', indicating no unresolved staff comments to disclose - This item is explicitly stated as 'Not applicable'[314] Item 5: Operating and Financial Review and Prospects This section discusses the company's financial condition, results of operations, and future prospects, highlighting significant losses and reliance on external funding for R&D Overview OKYO Pharma is a clinical-stage biopharmaceutical company focused on inflammatory eye diseases and ocular pain, with lead candidate OK-101 in Phase 2 clinical trials for DED and a trial for NCP planned for Q4 2023 - OKYO Pharma is a clinical-stage biopharmaceutical company developing therapeutics for inflammatory eye diseases and ocular pain[318] - IND for OK-101 to treat DED patients was filed on November 18, 2022, and cleared by the FDA on December 22, 2022[319] - Phase 2 clinical study of OK-101 for DED commenced patient screening on May 2, 2023, and dosing in the randomized portion on June 6, 2023, with expected completion in 6-8 months[320][321] - A 40-patient open-label clinical trial for OK-101 in neuropathic corneal pain (NCP) is planned to start in Fall 2023, with IND filing in Q4 2023[322] OKYO Pipeline Status | Indication | Pre-clinical | Phase 1 | Phase 2 | Phase 3 | | :-------------------------- | :----------------------------------- | :------ | :-------------------------- | :------ | | Dry Eye ("DED") | Skipped Phase 1; Phase 2 Commenced May 2, 2023 | | | | | Neuropathic Corneal Pain ("NCP") | Plan to open trial in Q4 2023 | | | | | Allergic Conjunctivitis | | | | | | Uveitis | | | | | Foreign Currency Translations The company's financial statements use Pounds Sterling as the functional currency and are presented in U.S. dollars, with translation adjustments recorded in other comprehensive loss - Items in financial statements are measured using Pounds Sterling (functional currency) and presented in U.S. dollars[325] - Assets and liabilities are translated at year-end exchange rates, and profit and loss items at average exchange rates[327] - Exchange differences from translation are taken to equity (other comprehensive loss) on consolidation[327] Components of Our Results of Operations The company has not generated product revenue and expects significant increases in expensed research and development, and general and administrative expenses as it advances product candidates - No revenue has been generated from product sales to date, and none is expected in the near future[328] - R&D expenses are expensed as incurred and include costs for CROs, CMOs, clinical trials, preclinical studies, manufacturing materials, employee-related expenses, and regulatory compliance[329][330] - General and administrative expenses consist primarily of salaries, benefits, travel, share-based compensation, and professional fees (legal, consulting, accounting, audit)[338] Direct Research and Development Expense by Program (in thousands) | Program | 2023 | 2022 (restated) | 2021 (restated) | | :-------- | :----- | :-------------- | :-------------- | | OK-101 | $ 6,244 | $ 1,514 | $ 297 | | OK-201 | 94 | 95 | 51 | | Total direct research and development expense | $ 6,338 | $ 1,609 | $ 348 | - R&D expenses are expected to increase substantially as product candidates advance through clinical development and regulatory filings[333] - Under UK tax legislation, small and medium entity R&D relief allows the company to claim back up to 14.5% of surrenderable losses as a tax cash credit[341] A. Results of Operations The company experienced a significant increase in net loss for FY2023, driven by increased R&D for OK-101 and higher G&A expenses related to its IPO and NASDAQ listing Comparison of Years Ended March 31, 2023 and 2022 (in thousands) | Operating Expenses | 2023 | 2022 (restated) | Change | | :-------------------------- | :----- | :-------------- | :------- | | Research and development | $ (6,338) | $ (1,610) | $ (4,728) | | General and administrative | (6,849) | (4,608) | (2,241) | | Total Operating expenses | (13,187) | (6,218) | (6,969) | | Other Income/ (Expense) | (97) | - | (97) | | Tax credit | 12 | 787 | (775) | | Net Loss | $ (13,272) | $ (5,431) | $ (7,841) | | Foreign currency translation adjustment | (441) | (837) | 482 | | Total Comprehensive (Loss) | $ (13,713) | $ (6,268) | $ (7,358) | - R&D expenses increased by $4.7 million in FY2023, driven by progression of the OK-101 pipeline towards IND filing[345] - G&A expenses increased by $2.2 million in FY2023, mainly due to costs related to the IPO, NASDAQ listing (D&O, compliance, legal), and increased public/investor relations[346] - Income tax credits decreased significantly from $786,521 in FY2022 to $12,202 in FY2023, primarily due to stricter UK tax authority requirements[348] Comparison of Years Ended March 31, 2022 and 2021 (in thousands) | Operating Expenses | 2022 (restated) | 2021 (restated) | Change | | :-------------------------- | :-------------- | :-------------- | :------- | | Research and development | $ (1,610) | $ (348) | $ (1,261) | | General and administrative | (4,608) | (3,018) | (1,590) | | Total Operating expenses | (6,218) | (3,366) | (2,852) | | Other Income/ (Expense) | - | (12) | 12 | | Tax credit | 787 | 25 | 762 | | Net Loss | $ (5,431) | $ (3,354) | $ (2,077) | | Foreign currency translation adjustment | (837) | 346 | (1,184) | | Total Comprehensive (Loss) | $ (6,268) | $ (3,007) | $ (3,261) | - R&D expenses increased by $1.26 million in FY2022 due to increased activity after a temporary pause in 2020[351] - G&A expenses increased by $1.59 million in FY2022, mainly due to the establishment of a management team and increased company activity[352] B. Liquidity and Capital Resources The company has historically funded operations through equity and debt, incurring significant losses, and faces substantial doubt about its going concern ability without additional financing - Since inception, the company has not generated revenue and has incurred operating losses and negative cash flows, funded primarily by equity sales and debt financings[355] - As of March 31, 2023, cash and cash equivalents were $4,045,381[356] Cash Flows Summary (in thousands) | Cash Flow Activity | 2023 | 2022 | 2021 | | :-------------------------------- | :------- | :------- | :------- | | Net cash used in operating activities | $ (7,695) | $ (5,468) | $ (1,600) | | Net cash used in investing activities | (6) | (2) | (18) | | Net cash provided by financing activities | 9,323 | 2,153 | 7,827 | | Net (decrease)/increase in cash and cash equivalents | $ 1,622 | $ (3,316) | $ 6,209 | - Net cash used in operating activities increased by $2.2 million in FY2023, primarily due to increased pipeline progression for OK-101[359] - The company had an accumulated deficit of $126 million and a net loss of $13.3 million for FY2023, raising substantial doubt about its ability to continue as a going concern without additional financing[365][366] - In August 2022, the company entered into a $2 million short-term credit facility with a related party at 16% interest, and an additional $0.5 million facility in February 2023 (repaid in March 2023)[369][370] C. Research and Development Expenses, Patents and Licenses, etc. This section cross-references 'Item 4.B.—Business Overview' and 'Item 5. Operating and Financial Review and Prospects' for details on research and development expenses, patents, and licenses - Information is cross-referenced to 'Item 4.B.—Business Overview' and 'Item 5. Operating and Financial Review and Prospects'[371] D. Trend Information This section cross-references 'Item 5. Operating and Financial Review and Prospects—Trend Information' for relevant disclosures - Information is cross-referenced to 'Item 5. Operating and Financial Review and Prospects—Trend Information'[371] E. Off-Balance Sheet Arrangements The company did not have any off-balance sheet arrangements during the periods presented and does not currently have any - The company did not have, and does not currently have, any off-balance sheet arrangements[372] F. Tabular Disclosure of Contractual Obligations As of March 31, 2023, the company's contractual obligations included $2.0 million in borrowings and $6 thousand in operating lease obligations, all due within one year Contractual Commitments and Obligations as at March 31, 2023 (in thousands) | (in thousands) | Total | Less than 1 Year | Between 1 and 5 Years | More than 5 Years | | :--------------- | :---- | :--------------- | :-------------------- | :---------------- | | Borrowings | $ 2,000 | $ 2,000 | $ - | $ - | | Operating lease obligations | $ 6 | $ 6 | $ - | $ - | | Total | $ 2,006 | $ 2,006 | $ - | $ - | Contractual Commitments and Obligations as at March 31, 2022 (in thousands) | (in thousands) | Total | Less than 1 Year | Between 1 and 5 Years | More than 5 Years | | :--------------- | :---- | :--------------- | :-------------------- | :---------------- | | Borrowings | $ - | $ - | $ - | $ - | | Operating lease obligations | $ 19 | $ 19 | $ - | $ - | | Total | $ 19 | $ 19 | $ - | $ - | G. Safe Harbor This section reiterates that the Annual Report contains forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, and refers to the 'Cautionary Statement Regarding Forward-Looking Statements' section - The Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and as defined in the Private Securities Litigation Reform Act of 1995[375] Item 6: Directors, Senior Management and Employees This section provides information on the company's directors and senior management, their compensation, board practices, and employee details, including board committees and share option plans A. Directors and Senior Management The company's board of directors and senior management include Gabriele Marco Antonio Cerrone (Non-Executive Chairman) and Dr. Gary S. Jacob (CEO), with extensive industry experience Directors and Senior Management as of Report Date | Name | Age | Position | | :-------------------------------- | :-- | :-------------------------- | | Gabriele Marco Antonio Cerrone MBA | 51 | Non-Executive Chairman | | Dr. Gary S. Jacob | 76 | CEO and Executive Director | | Dr. Raj Patil | 66 | Chief Scientific Officer | | Keeren Shah | 47 | Chief Financial Officer | | Willy Simon | 72 | Senior Non-Executive Director | | John Brancaccio | 75 | Non-Executive Director | | Bernard Denoyer | 76 | Non-Executive Director | - Gabriele Cerrone, Non-Executive Chairman, has founded 10 biotechnology companies and listed seven on Nasdaq[379] - Dr. Gary S. Jacob, CEO, has over 35 years of experience in pharmaceutical and biotechnology industries, previously serving as CEO of Synergy Pharmaceuticals Inc[380] - Dr. Raj Patil, Chief Scientific Officer, has over 15 years of ophthalmic drug development experience, including roles at Ora and Alcon/Novartis[381] - Keeren Shah, CFO, previously served as Finance Director for Tiziana Life Sciences Limited and held senior finance roles at Visa, Inc[382] B. Compensation Compensation for directors includes fees, bonuses, and equity awards, with specific details on Gabriele Cerrone's bonuses and Dr. Gary S. Jacob's salary increase, alongside the Employee Share Option Plan Total Compensation for Non-Executive Chairman and Non-Executive Directors (FY2023, in thousands) | Name | Position | Fees earned or paid in cash ($000) | Options awarded ($000) | Other ($000) | Total ($000) | | :---------------- | :-------------------- | :-------------------------------- | :--------------------- | :----------- | :----------- | | Gabriele Cerrone | Non-Executive Chairman | 145 | - | 300 | 445 | | Willy Simon | Non-Executive Director | 39 | 10 | - | 49 | | John Brancaccio | Non-Executive Director | 39 | 24 | - | 63 | | Bernard Denoyer | Non-Executive Director | 39 | 5 | - | 44 | - Gabriele Cerrone received $300,000 in bonuses in FY2023 for supporting the May 2022 offering and arranging the March 2023 private placing[391] - Gabriele Cerrone is eligible for a long-term realization bonus of 3.5% to 6.5% of the company's enterprise value if sold above certain thresholds[392] Compensation of Executive Directors (FY2023, in thousands) | Name | Position | Fees earned or paid in cash ($000) | Bonus earned or paid in cash ($000) | Options awarded ($000) | Total ($000) | | :--------- | :--------------- | :-------------------------------- | :--------------------------------- | :--------------------- | :----------- | | Gary Jacob | Executive Director | 433 | 217 | 133 | 783 | - Dr. Gary S. Jacob's base salary increased from $350,000 to $450,000 effective June 1, 2022, payable after a future equity raise[396] - The Employee Share Option Plan allows for options to be granted to executive directors, officers, and employees, typically exercisable after three years from the grant date, with an exercise price not less than the average market quotation for the five days prior to grant[399][402][403] C. Board Practices As a foreign private issuer (FPI), the company relies on home country governance requirements (Guernsey law and QCA Code) instead of certain Nasdaq corporate governance standards, operating with three standing committees - As an FPI, the company relies on home country governance requirements (Guernsey law and QCA Code) and is exempt from certain Nasdaq rules, such as majority independent directors, non-management executive sessions, and shareholder approval for certain equity compensation plans[416][418][420] - The board of directors consists of five members, with three identified as 'independent' under Nasdaq rules[421] - The company has three standing committees: Audit, Risk and Disclosure; Remuneration; and Nomination[423] - John Brancaccio chairs the Audit, Risk and Disclosure Committee and is considered an 'audit committee financial expert'[425] D. Employees As of March 31, 2022, the company had 3 full-time employees, none unionized, and indemnifies its directors while maintaining directors' and officers' insurance - As of March 31, 2022, the company had 3 full-time employees: 2 in R&D and 1 in management/administration/finance[430] - Employees are not members of labor unions or covered by collective bargaining agreements[430] - The company indemnifies its directors and maintains directors' and officers' insurance[431][432] E. Share Ownership This section cross-references 'Item 7. Major Shareholders and Related Party Transactions' for information on share ownership - Information is cross-referenced to 'Item 7. Major Shareholders and Related Party Transactions'[433] Item 7: Major Shareholders and Related Party Transactions This section details beneficial ownership by major shareholders and related parties, including directors, and outlines related party transactions such as indemnity agreements and credit facilities A. Major Shareholders As of July 28, 2023, Gabriele Cerrone is the largest beneficial owner with 33.69% of shares, while all directors and executive officers collectively own 35.51% Beneficial Ownership of Ordinary Shares as of July 28, 2023 | Name of beneficial owner | Number of Ordinary Shares Beneficially Owned | % | | :---------------------------------------- | :------------------------------------------- | :---- | | 5% or Greater Shareholders: | | | | Gabriele Cerrone | 8,608,364 | 33.69 | | Executive Officers and Directors: | | | | Gabriele Cerrone | 8,608,364 | 33.69 | | Willy Simon | 39,717 | * | | Gary Jacob | 403,575 | 1.58 | | John Brancaccio | 15,966 | * | | Bernard Denoyer | 5,128 | * | | All directors and executive officers as a group (5 persons) | 9,072,753 | 35.51 | - Gabriele Cerrone is the ultimate beneficial owner through Planwise Group Limited and Panetta Partners Limited[436] - * Indicates beneficial ownership of less than 1% of the total outstanding ordinary shares[435] B. Related Party Transactions Related party transactions include indemnity agreements, a shared services agreement with Tiziana Life Sciences Ltd, and short-term credit facilities, resulting in significant payables to Tiziana - Indemnity agreements have been entered into with each director[439] - A Shared Services agreement with Tiziana Life Sciences Ltd (a related party) resulted in $159,501 in costs incurred and $184,150 due as of March 31, 2023[440][723] - In August 2022, a $2 million short-term credit facility was obtained from Tiziana Life Sciences Ltd at 16% interest, with a total balance due of $2,207,209 as of March 31, 2023[725] - A $0.5 million short-term credit facility was obtained from Tiziana in February 2023, with the principal repaid in March 2023, leaving $7,902 in accrued interest due[726] - The board has adopted a written related person transaction policy to review and approve material transactions with related persons[441] C. Interests of Experts and Counsel This item is marked as 'Not applicable', indicating no specific disclosures on the interests of experts and counsel in this section - This item is explicitly stated as 'Not applicable'[442] Item 8: Financial Information This section refers to Item 18 for consolidated financial statements and Note 25 for significant changes, confirming no material governmental, legal, or arbitration proceedings - Consolidated statements and other financial information are provided in 'Item 18. Financial Statements'[443] - Significant changes since March 31, 2023, are described in Note 25 of the consolidated financial statements[445] - No governmental, legal, or arbitration proceedings are pending or threatened that would have a significant effect on the company's financial position or profitability[444] Item 9: The Offer and Listing This section details the company's transition from the London Stock Exchange to the Nasdaq Capital Market, providing historical trading prices for ordinary shares on both exchanges A. Listing Details The company's ordinary shares transitioned from the London Stock Exchange to the Nasdaq Capital Market on May 22, 2023, with historical trading prices provided for both exchanges - The principal trading market for ordinary shares is the Nasdaq Capital Market since May 22, 2023, following delisting from the London Stock Exchange (LSE) on May 19, 2023[447][448] LSE Ordinary Share Price History (High/Low, in Pounds Sterling and U.S. dollars) | Period | Price Per Ordinary Share £ (High) | Price Per Ordinary Share £ (Low) | Price Per Ordinary Share $ (High) | Price Per Ordinary Share $ (Low) | | :------------------------ | :------------------------------ | :----------------------------- | :------------------------------ | :----------------------------- | | Year Ended March 31, 2024 (First Quarter) | 0.021 | 0.016 | 0.067 | 0.020 | | Year Ended March 31, 2024 (Second Quarter to May 19, 2023) | 0.024 | 0.014 | 0.032 | 0.018 | | Year Ended March 31, 2023 (First Quarter) | 0.065 | 0.026 | 0.082 | 0.036 | | Year Ended March 31, 2023 (Second Quarter) | 0.043 | 0.024 | 0.056 | 0.031 | | Year Ended March 31, 2023 (Third Quarter) | 0.034 | 0.023 | 0.048 | 0.030 | | Year Ended March 31, 2023 (Fourth Quarter) | 0.054 | 0.019 | 0.071 | 0.024 | | Year Ended March 31, 2022 (First Quarter) | 0.078 | 0.060 | 0.102 | 0.078 | | Year Ended March 31, 2022 (Second Quarter) | 0.065 | 0.040 | 0.085 | 0.053 | | Year Ended March 31, 2022 (Third Quarter) | 0.085 | 0.041 | 0.112 | 0.054 | | Year Ended March 31, 2022 (Fourth Quarter) | 0.083 | 0.048 | 0.108 | 0.062 | | Year Ended March 31, 2021 (First Quarter) | 0.055 | 0.017 | 0.072 | 0.022 | | Year Ended March 31, 2021 (Second Quarter) | 0.180 | 0.053 | 0.024 | 0.069 | | Year Ended March 31, 2021 (Third Quarter) | 0.121 | 0.071 | 0.159 | 0.093 | | Year Ended March 31, 2021 (Fourth Quarter) | 0.120 | 0.076 | 0.157 | 0.100 | Nasdaq Capital Market ADS Price History (High/Low, in U.S. dollars) | Period | Price Per ADS $ (High) | Price Per ADS $ (Low) | | :------------------------------------ | :--------------------- | :-------------------- | | Year Ended March 31, 2024 (First Quarter) | 2.13 | 1.15 | | Year Ended March 31, 2024 (Second Quarter to July 19, 2023) | 2.37 | 1.96 | | Year Ended March 31, 2023 (First Quarter From May 17, 2022) | 3.62 | 1.92 | | Year Ended March 31, 2023 (Second Quarter) | 3.40 | 1.95 | | Year Ended March 31, 2023 (Third Quarter) | 2.70 | 1.69 | | Year Ended March 31, 2023 (Fourth Quarter) | 1.27 | 1.07 | - On July 19, 2023, the last reported sale price of ordinary shares on the Nasdaq Capital Market was $1.27 per ordinary share[452] B. Plan of Distribution This item is marked as 'Not applicable', indicating no specific disclosures on the plan of distribution in this section - This item is explicitly stated as 'Not applicable'[453] C. Markets The company's ordinary shares are now listed solely on the Nasdaq Capital Market under the symbol 'OKYO', having ceased listing on the London Stock Exchange on May 21, 2023 - Ordinary shares are listed on the Nasdaq Capital Market under the symbol 'OKYO'[454] - The listing on the Main Market of the London Stock Exchange ceased on May 21, 2023[454] D. Selling Shareholders This item is marked as 'Not applicable', indicating no specific disclosures on selling shareholders in this section - This item is explicitly stated as 'Not applicable'[455] E. Dilution This item is marked as 'Not applicable', indicating no specific disclosures on dilution in this section - This item is explicitly stated as 'Not applicable'[456] F. Expenses of the Issue This item is marked as 'Not applicable', indicating no specific disclosures on the expenses of the issue in this section - This item is explicitly stated as 'Not applicable'[458] Item 10: Additional Information This section covers share capital, memorandum and articles of association, material contracts, exchange controls, and detailed taxation considerations for U.S. and U.K. holders A. Share Capital This item is marked as 'Not applicable', indicating no specific disclosures on share capital in this section - This item is explicitly stated as 'Not applicable'[459] B. Memorandum and Articles of Association The description of the company's amended articles of association is incorporated by reference from its Registration Statement on Form F-1 - The description of the amended articles of association is incorporated by reference from the Registration Statement on Form F-1[460] C. Material Contracts The company is not currently, and has not been in the last two years, party to any material contract other than those entered into in the ordinary course of business - The company is not party to any material contract outside the ordinary course of business, except as disclosed in the Annual Report[461] D. Exchange Controls There are no governmental laws or regulations in the United Kingdom that affect the import or export of capital or the remittance of dividends to non-resident holders, other than withholding tax - No UK governmental laws or regulations affect the import/export of capital or remittance of dividends/interest to non-resident holders, except for withholding tax[462] - No limitations are imposed by English or Guernsey law on non-residents' right to hold or participate in shareholder votes[462] E. Taxation This section provides material U.S. federal income tax considerations for U.S. Holders, particularly regarding Passive Foreign Investment Company (PFIC) rules, and outlines U.K. taxation aspects - The company believes it was a PFIC for its 2017 tax year and expects to be a PFIC for the current taxable year, which could lead to adverse U.S. federal income tax consequences for U.S. Holders[469] - If classified as a PFIC, U.S. Holders may be subject to the 'PFIC excess distribution regime' with additional taxes and interest charges on certain distributions and gains, unless a mark-to-market election is made for 'marketable stock'[470][473][474] - Dividends paid by the company will not be subject to U.K. withholding tax. U.K. Holders may be subject to U.K. income tax or corporation tax on dividends and chargeable gains on disposal of shares, subject to exemptions[492][493][495][497] - No U.K. stamp duty or stamp duty reserve tax (SDRT) is payable on the issue or transfer of ordinary shares in the Guernsey-incorporated entity[501][502][503] F. Dividends and Paying Agents This item is marked as 'Not applicable', indicating no specific disclosures on dividends and paying agents in this section - This item is explicitly stated as 'Not applicable'[505] G. Statements by Experts This item is marked as 'Not applicable', indicating no specific disclosures on statements by experts in this section - This item is explicitly stated as 'Not applicable'[506] H. Documents on Display The company is subject to SEC informational requirements and files reports (Form 20-F, Form 6-K) which are available for public inspection at SEC facilities and on the SEC's website - The company is subject to SEC informational requirements and files reports (Form 20-F, Form 6-K) electronically[507] - Filings are available for inspection at SEC public reference facilities and on the SEC's website (www.sec.gov)[507](index=507&type=chunk) - Annual Reports and Form 6-K reports are also made available on the company's website (www.okyopharma.com)[508](index=508&type=chunk) I. Subsidiary Information This section cross-references 'Item 4C. Organizational Structure' for information on the company's subsidiaries - Information on subsidiaries is cross-referenced to 'Item 4C. Organizational Structure'[509] Item 11: Quantitative and Qualitative Disclosures About Market Risk The company's market risks are primarily limited to interest rate and foreign currency exchange rate fluctuations, with no current currency hedging activities - Market risks are principally limited to interest rate fluctuations and foreign currency exchange rate fluctuations[509] - The company's surplus cash and cash equivalents are invested in interest-bearing accounts, but due to the conservative nature of its portfolio, a one percentage point change in interest rates is not expected to have a material effect[510] - The company's financial statements are prepared in Pounds Sterling (functional currency) and translated into U.S. dollars (presentation currency), leading to foreign exchange translation adjustments in other comprehensive loss[511][513] - The company does not currently engage in currency hedging activities but may consider foreign currency forward and swap contracts in the future[514] Item 12: Description of Securities Other than Equity Securities This item is marked as 'Not applicable' for debt securities, warrants and rights, other securities, and American Depositary Shares, indicating no specific disclosures - This item is explicitly stated as 'Not applicable' for Debt Securities, Warrants and Rights, Other Securities, and American Depositary Shares[515][516][517][518] PART II Item 13: Defaults, Dividend Arrearages and Delinquencies This item states that there are no defaults, dividend arrearages, or delinquencies to report - There are no defaults, dividend arrearages, or delinquencies[521] Item 14: Material Modifications to the Rights of Security Holders and Use of Proceeds This item states that there have been no material modifications to the rights of security holders and no specific disclosures regarding the use of proceeds - There have been no material modifications to the rights of security holders and no specific disclosures regarding the use of proceeds[522] Item 15: Controls and Procedures The company's disclosure controls and procedures were not effective as of March 31, 2023, due to material weaknesses in internal control over financial reporting, primarily a lack of accounting resources - As of March 31, 2023, the company's disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting[523][526] - The primary material weakness identified was a lack of accounting resources, resulting in over-reliance on key staff, professional opinions, and weak monitoring controls, which led to corrected misstatements during the audit[528][529] - Remediation efforts include making additional funds available for accounting resources, hiring new personnel, implementing formalized review controls, and providing regular training on IFRS and SEC reporting[531] Item 16A: Audit Committee Financial Expert John Brancaccio, chair of the Audit, Risk and Disclosure Committee, is deemed an 'audit committee financial expert', and all committee members meet Nasdaq independence requirements - John Brancaccio is the chair of the audit, risk and disclosure committee and is determined to be an 'audit committee financial expert'[532] - All members of the audit, risk and disclosure committee satisfy the independence requirements of Rule 10A-3 under the Exchange Act and Nasdaq rules[532] Item 16B: Code of Ethics The company has a Code of Business Conduct and Ethics applicable to all employees, officers, and directors, emphasizing conflict avoidance and available on its website - A Code of Business Conduct and Ethics is applicable to all employees, officers, and directors and is available on the company's website[533] - The code requires directors and officers to avoid conflicts of interest and advance company interests[533] - Any amendments or waivers to the code will be disclosed on the company's website[533] Item 16C: Principal Accountant Fees and Services The company incurred audit and other assurance services fees from Mazars LLP and PKF Littlejohn LLP, with PKF Littlejohn LLP billing $121 thousand for audit fees in FY2023 Principal Accountant Fees and Services (in thousands) | Auditor | Service Type | Year Ending March 31, 2023 ($000) | Year Ending March 31, 2022 ($000) | | :---------------- | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Mazars LLP | Audit fees | 107 | 201 | | | Other assurance services | 227 | 149 | | | Total Mazars LLP | 334 | 350 | | PKF Littlejohn LLP | Audit fees | 121 | - | | | Other assurance services | - | - | | | Total PKF Littlejohn LLP | 121 | - | - Other assurance services include interim reviews and audit opinions required for other filings[534] Item 16D: Exemptions From the Listing Standards for Audit Committees This item is marked as 'Not applicable', indicating no specific disclosures on exemptions from listing standards for audit committees - This item is explicitly stated as 'Not applicable'[537] Item 16E: Purchases of Equity Securities by the Issuer and Affiliated Purchasers This item states that there were no purchases of equity securities by the issuer or affiliated purchasers - There were no purchases of equity securities by the issuer and affiliated purchasers[538] Item 16F: Change in Registrant's Certifying Accountant Mazars LLP resigned as the independent registered public accounting firm on November 24, 2022, and PKF Littlejohn, LLP was appointed on November 28, 2022, with no disagreements on accounting principles - Mazars LLP resigned as the independent registered public accounting firm on November 24, 2022[539] - PKF Littlejohn, LLP was appointed as the new independent registered public accounting firm on November 28, 2022, approved by the Audit Committee[539][540] - Mazars' reports for FY2021 and FY2022 did not contain adverse or disclaimed opinions, nor were they qualified. No disagreements on accounting principles or practices occurred[540][541] - Mazars had disclosed that internal control over financial reporting was not effective as of March 31, 2022, due to a lack of accounting resources[541] Item 16G: Corporate Governance As an FPI, the company follows Guernsey home country practices instead of certain Nasdaq corporate governance standards, including different quorum requirements and discretionary executive sessions - As an FPI, the company follows Guernsey home country practices instead of certain Nasdaq corporate governance standards[545] - Exemptions include not following Nasdaq's quorum requirements for shareholder meetings, non-management directors meeting in executive sessions at their discretion, and following Guernsey law for shareholder approval of equity compensation plans and private placements[550] - Directors and senior management are not subject to Section 16 short-swing profit and insider trading reporting obligations but are subject to Section 13 share ownership reporting[547] Item 16H: Mine Safety Disclosure This item is marked as 'Not applicable', indicating no specific disclosures on mine safety - This item is explicitly stated as 'Not applicable'[548] Item 16L: Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. This item is marked as 'Not applicable', indicating no specific disclosures regarding foreign jurisdictions that prevent inspections - This item is explicitly stated as 'Not applicable'[549] PART III Item 17: Financial Statements The company has elected to furnish financial statements and related information as specified in Item 18 - The company has elected to furnish financial statements and related information specified in Item 18[552] Item 18: Financial Statements This section presents the audited consolidated financial statements for OKYO Pharma Limited, including balance sheets, statements of operations, changes in equity, and cash flows, with detailed notes Report of Independent Registered Public Accounting Firm (PKF Littlejohn LLP) PKF Littlejohn LLP, appointed on November 28, 2022, issued an unqualified opinion on the consolidated financial statements for the year ended March 31, 2023, prepared in conformity with IFRS. However, they highlighted a 'Going Concern Uncertainty' due to the company's pre-revenue status, significant R&D expenditure, and projected cash depletion by October 2023 without additional financing - PKF Littlejohn LLP issued an unqualified opinion on the consolidated financial statements for the year ended March 31, 2023[561] - A 'Going Concern Uncertainty' was noted due to the company