RNS Number : 2522I
NetScientific PLC
24 March 2015
 

NetScientific plc

('NetScientific' or the 'Group')

 

NetScientific Full Year results: Significant Progress in core Portfolio Companies
Wanda Health and Vortex BioSciences.

First commercial launches expected during 2015

 

London, UK - 24 March 2015 - NetScientific (AIM: NSCI), the biomedical and healthcare group, announces its results for the year ended 31 December 2014. Highlights were as follows:

 

Highlights

·      Wanda Health - commercial roll-out of Congestive Heart Failure Clinical Decision Support Solution expected to commence in the US in H2 2015 with new contracts anticipated; CE mark also expected in H2 2015

·      Vortex BioSciences - cancer diagnostic technology being clinically assessed in multiple cancers by leading physicians and scientists; instruments expected to be shipped in H2 2015

·      Loss after tax of £7.1m (2013: loss £4.3m) reflecting development stage of portfolio

·      Available cash resources of £16.8m (at 31 December 2013: £25.5m)

·      Strategic partnership with Peter Thiel's Breakout labs and early funding made to four biomedical and healthcare technologies companies

·      Post year end, Farad Azima, CEO left the Group; Sir Richard Sykes appointed as Executive Chairman until a new CEO is appointed. Lady Barbara Judge stepping down as Non-Executive Director. Jonathan Paisner joined the board as a Non-Executive Director as representative of the Azima Family Trust.

·      Capital Markets Day planned for mid-year 2015

 

Sir Richard Sykes, Executive Chairman of NetScientific said:

 

"2014 has been a productive year for NetScientific, focusing on the growth plans of our lead portfolio companies, as well as seeking new investments, and establishing and building relationships with strategic partners.

 

In 2015, we anticipate commercial launches from our core portfolio companies, Wanda Health and Vortex BioSciences, further enhancing the value of our portfolio.

 

Post year end, we initiated a review of our portfolio and strategy and we will report the results by mid-year 2015."
 

- Ends -

Contact Details

NetScientific

Peter Thoms, CFO

 

Tel: +44 (0)77 2055 5752

Liberum (Nominated Advisor)

Clayton Bush

Christopher Britton

 

Tel: +44 (0) 20 3100 2000

 

Instinctif Partners

Melanie Toyne-Sewell / Tim Watson

Tel: +44 (0) 20 7457 2020 Email: netscientific@instinctif.com

 

 

About NetScientific

NetScientific is a biomedical and healthcare technology group that funds and develops technologies that offer transformative benefits to people's lives and society. For more information, please visit the website at www.NetScientific.net

 

 

 

CHAIRMAN'S STATEMENT

 

Overview

 

The year ended 31 December 2014 has been a productive one for NetScientific plc ('NetScientific' or 'the Group'). In accordance with the Group's business strategy, NetScientific has been supporting its lead portfolio companies' growth plans, seeking new companies and technologies for investment, and establishing and building relationships with strategic partners and collaborators.

 

The Group made a loss after tax of £7.1m (2013: loss £4.3m) which is a reflection of the business model where a number of the portfolio companies are trading subsidiaries developing their technologies. The net cash position at the year end of £16.1m is available for the Group's working capital requirements, additional investment in the current portfolio and future investment opportunities.

 

Within the portfolio, the focus has been primarily on the two most mature companies, Wanda Health (Wanda) and Vortex BioSciences (Vortex), which have been making good progress towards their anticipated first commercial launches in 2015. There are another three core companies within the portfolio - Glucosense, Glycotest and ProAxsis, which are exciting opportunities, ready for accelerated development through further investment in the coming year. More detail is included in the Portfolio Review.

 

Post year end, there has been a change in the management team resulting in a review of the investment strategy and overall portfolio. The results of this review will be presented at a detailed Capital Markets Day in mid-2015 where investors will also be able to meet with and receive an update on the portfolio companies.

 

Looking forward to the coming year, the Group is expecting progress across the portfolio with some significant value inflection points. A specific focus is on the core companies with commercial launches of Wanda's CHF Clinical Decision Support Solution and Vortex's VX-1 Instrument expected.

 

 

Financial Results

 

The Group made a loss after tax for the year ended 31 December 2014 of £7.1m (31 December 2013: £4.3m).

 

The cash outflow from the operating activities for existing companies and projects before changes in working capital was £5.8m and further £2.4m was invested in capital investment and funding positions in new pipeline companies and projects.

 

Net funds held by the Group at 31 December 2014 amounted to £16.1m and comprised cash and cash equivalents and short-term deposits of £16.8m less long-term loans of £0.7m.

 

 

Business Strategy

 

NetScientific's mission is to build a transatlantic biomedical and healthcare group funding and developing technologies that offer transformative benefits to people's lives and society.

 

NetScientific is primarily focused on opportunities targeting the increased numbers of patients living with chronic diseases and the associated costs, the key challenge for the global healthcare sector. Consequently, the areas of focus represent highly attractive growth markets where breakthrough technology solutions are in high demand. The three key areas of focus are digital health (data analytics, wearable technologies and devices), diagnostics and therapeutics.

 

New pipeline investments are sourced from leading researchers from the US and European universities, or through strategic partnerships, backing entrepreneur-led start-ups with ground breaking technologies. In addition the pipeline can be enhanced by new projects originating from the team's considerable sector expertise and network.

 

NetScientific has typically taken a controlling interest in its portfolio companies, which it aims to maintain for as long as practical commensurate with the needs of the company and management of the portfolio. The Group is an active investor providing extensive management support. This involves the senior management team initially taking leadership roles in companies and building dedicated management teams as the companies develop and grow.

 

The aim of the Group is to maintain, at any one time, a portfolio of three to five actively managed companies and a secondary portfolio of 10 smaller investments, the most successful of which will become more actively managed companies. As at 31 December 2014, the Group had a portfolio of 15 investments.

 

NetScientific will continue to invest in its portfolio to maximise shareholder return in the form of capital growth. However, there are no fixed targets for the length of time during which an investment may be held, as this will be dependent both on progress and availability of funding. This means that no realisation of assets will be attempted until optimum value has been developed through achievement of key technical and commercial milestones usually reflected in regulatory approvals or commercial traction. The Board will, however, actively manage the portfolio with a view to maximising shareholder value and generating funds for re-investment in the pipeline.

 

 

Portfolio Review

 

The next section highlights the core five actively managed companies and which the Board considers are making good progress and show significant promise in the short to medium term.

 

Wanda Health

 

Wanda Health is developing cloud-based analytics, as part of a total patient management solution, in partnership with other healthcare providers. The core analytics engine is based on 12 years of research at the Wireless Health Institute at UCLA.

 

Wanda Health completed development of a predictive analytics engine for use in remotely monitoring patients with Congestive Heart Failure ('CHF'), the leading cause of hospital re-admissions in USA.

 

During the first half 2014, the company was pursuing regulatory approval in both the US and Europe, and preparing for commercial launch. However, in second half 2014 it became clear that the US regulatory environment had changed and clinical decision support systems no longer required FDA approval before marketing. Therefore, commercial roll out is commencing in hospitals and managed care providers in USA, and the Group expects to announce new contracts in the coming year.

 

In Europe, Wanda Health has been focused on achieving a CE mark, which is expected early in the second half 2015. In addition, working with a partner in the UK, there are plans to complete a pilot with a clinical commissioning group with a view to a commercial roll out later in 2015

 

Work on other applications, notably in patients with co-morbidities in addition to CHF, has been progressing well and is expected to be ready for beta testing in the second half of 2015 and launch in late 2015.

 

Vortex

 

Vortex BioSciences is a cancer diagnostic instrument company providing liquid biopsy solutions for isolating, detecting and harvesting circulating tumour cells ('CTCs') from cancer patients' blood samples.

 

The company is developing the Vortex VX-1 benchtop instrument, which runs a simplified, high-speed blood test for a wide range of metastatic cancers. The instrument harvests live CTCs from patient blood samples for use in downstream clinical applications such as monitoring disease progression and drug treatment effectiveness. Revenue will be generated by selling laboratory instruments along with single use cartridges for each blood sample.

 

During 2014, clinical evaluations have been initiated by leading cancer physicians and scientists, working in the fields of lung, breast, prostate, pancreatic and colon cancers at the UCLA Medical Center, Stanford Hospital, the Rowland Institute at Harvard University and at further leading university cancer centers.

 

Post year end, the first instruments for the research market are being finalised and will be shipped to collaborators. These instruments do not require FDA approval and shipments are expected in the second half of 2015.

 

Glycotest

 

Glycotest is developing diagnostic tests designed to support the accurate diagnosis of liver disease, liver cancers and fibrosis-cirrhosis, and ultimately help improve disease management in patients.

 

The technology was spun-out of the Drexel University College of Medicine and the Baruch S. Blumberg Institute. The first diagnostic panel under development, measures serum levels of multiple liver proteins using the company's proprietary technology to detect early stage Hepatocellular Carcinoma ('HCC'), improving surveillance of the disease in high-risk populations.

 

In October 2014, Glycotest entered research collaboration with Nottingham-based Oncimmune Ltd, to explore the combined application of Oncimmune's proprietary autoantibody technology and Glycotests' glycoprotein biomarkers, for the early detection of liver cancer.

 

The company is currently working on panel development and validation in anticipation of commercial launch in late 2016.

 

Glucosense

 

Glucosense is developing a non-invasive blood glucose sensor, which has a number of potential professional and consumer applications. These include as a partial replacement for the finger-prick testing, continuous non-invasive glucose monitoring and as a wearable hypoglycaemia-alert device.

 

The company has commenced development of a next generation prototype which will allow further clinical testing in late 2015, early 2016. The technology is also attracting strong interest from a number of global technology companies. Glucosense is in early stage discussions with potential partners for co-development or out-licensing of the technology in certain applications. The focus in 2015 will be on continuing to advance product development.

 

ProAxsis

 

In February 2014, NetScientific invested in ProAxsis, a spin-out from Queen's University Belfast which has novel technology in detection of activated proteases (ProteaseTagsTM) which are central to a range of diseases.

 

The company is developing a range of novel, point of care, easy to use tests, which will enable routine monitoring and improved management of patients with chronic conditions, such as cystic fibrosis and chronic obstructive pulmonary disease. The lead product, NEATstickTM, detects active neutrophil elastase, which is an early indicator of lung infection in patients with cystic fibrosis. In parallel with this, ProAxsis is also developing a range of activity-base immunoassays, which will assist the research community in the specific measurement of activated protease disease-biomarkers. Later in 2015, the launch of the first ProteaseTagsTM immunoassay tests is anticipated as well as the completion of pre-clinical development of NEATstickTM.

 

New Investments

 

A key evolution of the Group's approach to building the pipeline occurred in March 2014 with the strategic partnership with San Francisco-based, Breakout Labs. This is Peter Thiel's revolving philanthropic fund that supports early-stage companies working on technological breakthroughs.

 

Under the terms of the agreement, NetScientific will follow on Breakout Labs' initial investment in those biomedical and healthcare technologies companies that fit NetScientific's investment strategy of funding technologies that offer transformative benefits to people lives and society.

 

During 2014 an equity investment was made in CytoVale and loan funding (convertible loan notes) was provided to Longevity Biotech, G-Tech Medical and Epibone. In addition to NetScientific's commercial and scientific due diligence all these companies have been positively assessed by Breakout Labs' appraisal system that selects only a few of the entrepreneur led companies applying.

 

PDS Biotechnology

 

In December 2014, NetScientific invested in PDS Biotechnology ('PDS'). This reflects an emerging strategy to identify selective opportunities in next generation therapeutics. PDS is a clinical stage immunotherapy company developing a next-generation of simpler, safer and more effective immunotherapies for cancer and infectious disease. Versamune®, its novel synthetic nanoparticle platform technology, activates multiple immunological mechanisms which direct the targeting of cancer and infectious disease by the immune system.

 

The company's lead product, PDS0101, is in phase I clinical trials in the US for HPV-related cancers. PDS has licensed the Versamune® technology to Merck KGaA for use in two early stage cancer immunotherapy programmes. The company has also ongoing pre-clinical programmes for other cancers as well as pandemic influenza.

 

 

Post year: management changes

 

At the beginning of 2015, Farad Azima, the CEO, left the Group and Sir Richard Sykes took on the role of Executive Chairman until a new CEO is appointed. As outlined below, Farad Azima is becoming Executive Chairman of Frontierbio Sciences Limited ('Frontierbio'), a company jointly owned by the Group.

 

The search for a new CEO is underway. Until a new candidate is found, responsibilities have been organised geographically. Dr. Mike Boyce-Jacino now manages all USA investments and David Gough now manages European investments. Both directors have extensive life sciences experience; Dr. Mike Boyce-Jacino was a founder of Orchid Biosciences, Inc. and Vice President at Beckman Coulter, Inc. and David Gough was formerly Head of Healthcare and Biotechnology at PA Consulting Group, a founder of Vectura Group plc and a healthcare venture capitalist.

 

On 26 February 2015, NetScientific announced that Jonathan Paisner would join the board as a Non-Executive Director. He is being appointed by the Azima family trusts pursuant to their rights under the NetScientific Articles of Association to nominate a director.

 

Lady Barbara Judge stepped down on 23 March 2015. She was recently elected as Chairman of the Institute of Directors and is reducing her other commitments. A search is underway for a replacement Non-Executive Director.

 

Post year end: Related party transaction

 

As part of the Group's ongoing review of its portfolio, the Board has agreed to reduce its commitment but retain an interest in certain projects that fall outside its core area of focus. The projects relate to three sponsored research agreements with Leuven University, Belgium (the 'SRAs') and its 38% shareholding in DName-iT NV, a Belgian company, part owned by Leuven University, which were announced to the market on 7 January 2015.

 

The Group has agreed to transfer these projects (including its DName-iT NV shareholding) to a new company, Frontierbio. On completion of this transfer Frontierbio will be controlled by Zahra Holdings Limited ('Zahra'), a company wholly-owned by a family trust of the former CEO, Farad Azima, which together with two other companies controlled by Azima family trusts, holds 47.8% of the shares in NetScientific (in addition Farad Azima has a personal holding of 0.4%). Zahra will own 50.01% of the equity in Frontierbio, with the remaining equity held by the Group.

 

As part of a shareholders' agreement dated 23 March 2015 between Zahra and NetScientific UK Limited ('NUK'), a wholly-owned NetScientific subsidiary, the parties have committed funding to Frontierbio on completion to the value of £1.8m. Zahra, through its ownership of Frontierbio, will assume 50.01% of this funding commitment (£0.9m). NUK's funding commitment (£0.9m) will be satisfied by the c.£0.53m it has already spent to date on the SRAs and DName-it shareholding (some of which will be capitalised as equity in Frontierbio and the rest converted into debt) and a commitment to transfer a further c.£0.37m on completion.. The combined new funding of c.£1.27m provided on completion will be used to (a) acquire a controlling shareholding in DName-iT NV and (b) satisfy payment obligations under the SRAs. Funding beyond this £1.27m is discretionary for both parties.

 

Under the shareholders' agreement day to day operational control of Frontierbio will be with its board of directors (of which a majority will be appointed by Zahra and the Executive Chairman of Frontierbio will be Farad Azima), subject to reserved shareholder rights in favour of NUK. Instead of receiving a salary as Executive Chairman of Frontierbio for the following two years, Farad Azima can receive up to 5% share options in Frontierbio (but not exercisable until after that two year period).

 

On its IPO, NetScientific entered into a relationship agreement with the three Azima family trusts, which through controlled companies (including Zahra) hold shares in NetScientific, to regulate the ability of NetScientific and its subsidiaries to act independently of those trusts and controlled companies. NetScientific has agreed an amendment with the parties to the relationship agreement to allow Zahra to enter into and perform its obligations under the shareholders' agreement with NUK.

 

As Zahra, Farad Azima and his family trusts are related parties under the AIM Rules for Companies, the Directors (Jonathan Paisner abstaining by virtue of being appointed a director on the nomination of the Azima family trusts) consider, having consulted with Liberum in its capacity as the Company's nominated adviser, that the shareholders' agreement terms and the relationship agreement amendment are fair and reasonable insofar as NetScientific shareholders are concerned.

 

 

 

Finally, we would like to thank all our staff for their hard work and commitment to NetScientific. We have made considerable progress in 2014 and look forward to another exciting year.

 

 

Sir Richard Sykes

Chairman

24 March 2015

 

 

 

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2014

 

 

Notes

2014

£

 

2013

£

 

Other operating income

 

 

343,126

 

 

177,667

 

 

 

 

 

 

Research and development expenditure

Other administrative expenses

Share-based payments

Impairment of intangible assets

Reorganisation and AIM listing costs

 

 

 

 

5

 

3,674,939

2,535,028

717,001

641,767

-

 

 

762,624

1,900,242

717,234

-

1,123,508

 

Total administrative expenses

 

 

(7,568,735)

 

 

(4,503,608)

 

Loss from operations

 

 

(7,225,609)

 

 

(4,325,941)

 

Finance income

 

 

77,465

 

 

37,566

Finance expense

 

(45,671)

 

(35,210)

Share of loss of associates and joint venture

 

(119,991)

 

(27,832)

 

Loss before taxation

 

 

(7,313,806)

 

 

(4,351,417)

 

Income tax credit

 

 

187,008

 

 

14,153

 

Loss for the year

 

 

(7,126,798)

 

 

(4,337,264)

 

 

 

 

 

Loss attributable to:

 

 

 

 

Owners of the parent

 

(6,425,011)

 

(4,112,565)

Non-controlling interests

 

(701,787)

 

(224,699)

 

 

 

 

(7,126,798)

 

 

(4,337,264)

 

Basic and diluted loss per ordinary share

 

4

 

(17.9)p

 

 

(21.0)p

 

 

 

CONSOLIDATED INCOME STATEMENT AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2014

 

 

 

2014

£

 

2013

£

 

Loss for the year

 

 

(7,126,798)

 

 

(4,337,264)

Items that may be subsequently reclassified to profit or loss:

 

 

 

 

Exchange differences on translation of foreign operations

 

295,989

 

87,377

 

Total comprehensive loss for the year

 

 

(6,830,809)

 

 

(4,249,887)

 

 

Attributable to:

 

 

 

 

Owners of the parent

 

(6,129,022)

 

(4,025,188)

Non-controlling interests

 

(701,787)

 

(224,699)

 

 

 

(6,830,809)

 

 

(4,249,887)

 

All other comprehensive income will be reclassified to retained earnings on the ultimate sale of any relevant subsidiary company.

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2014

 

 

Notes

2014

£

 

 

2013

£

ASSETS

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

Intangible assets

5

10,244

 

638,492

Property, plant and equipment

 

348,245

 

67,101

Investments in equity accounted associates

6a

228,883

 

-

Investments in equity accounted joint ventures

6b

-

 

69,872

Available for sale investments

6c

1,806,608

 

2

Derivative financial assets

7

100,159

 

-

Other receivables

 

545,606

 

18,905

 

 

3,039,745

 

794,372

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

Trade and other receivables

 

853,022

 

306,746

Cash and cash equivalents

 

16,867,198

 

25,546,951

 

 

17,720,220

 

25,853,697

TOTAL ASSETS

 

20,759,965

 

26,648,069

 

LIABILITIES

CURRENT LIABILITIES

 

 

 

 

Trade and other payables

 

(1,281,242)

 

(1,113,490)

Loans and borrowings

 

(43,250)

 

(3,250)

 

 

(1,324,492)

 

(1,116,470)

 

NON CURRENT LIABILITIES

 

 

 

 

Trade and other payables

 

(52,537)

 

(49,723)

Loans and borrowings

 

(687,369)

 

(475,109)

Provision for deferred tax

 

-

 

(106,965)

 

 

(739,906)

 

(1,748,537)

TOTAL LIABILITIES

 

(2,064,398)

 

(2,865,277)

 

TOTAL NET ASSETS

 

 

18,695,567

 

 

24,899,532

 

 

 

 

 

 

ISSUED CAPITAL AND RESERVES

ATTRIBUTABLE TO THE PARENT

 

 

 

 

Called up share capital

 

1,795,101

 

1,795,101

Share premium account

 

30,844,552

 

30,844,552

Capital reserve account

 

236,745

 

236,745

Foreign exchange reserve

 

446,120

 

150,131

Retained earnings

 

(13,529,442)

 

(7,459,726)

 

Equity attributable to the owners of the parent

 

 

19,793,076

 

 

25,566,803

 

Non-controlling interests

 

 

(1,097,509)

 

 

(667,271)

 

TOTAL EQUITY

 

 

18,695,567

 

 

24,899,532

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

FOR THE YEAR ENDED 31 DECEMBER 2014

 

 

 

Shareholders' equity

 

 

 

 

 

 

 

Share capital

£

Share premium

£

Capital

reserve

£

Retained earnings

£

Foreign exchange reserve

£

Total

£

Non-

controlling

interests

£

Total

equity

£

Balance at 1 January 2013

1

-

-

(4,064,395)

62,754

(4,001,640)

(242,036)

(4,243,676)

 

Comprehensive Income

 

 

 

 

 

 

 

 

Loss for the year

-

-

-

(4,112,565)

-

(4,112,565)

(224,699)

(4,337,264)

Other comprehensive income

-

-

-

-

87,377

87,377

-

87,377

Acquisition of subsidiary

-

-

-

-

-

-

(203,357)

(203,357)

Increase in subsidiary shareholding

-

-

-

-

-

-

(6,772)

(6,772)

Dilution in subsidiary shareholdings

-

-

-

-

-

-

9,593

9,593

Issue of share capital

1,795,100

32,279,998

-

-

-

34,075,098

-

34,075,098

Transaction costs in respect of share issues

-

(1,435,446)

-

-

-

(1,435,446)

-

(1,435,446)

Waiver of loan interest on share issue

-

-

236,745

-

-

236,745

-

236,745

Share-based payments

-

-

-

717,234

717,234

-

717,234

Total comprehensive income

 

1,795,100

 

30,844,552

 

236,745

 

(3,395,331)

 

87,377

 

29,568,443

 

(425,235)

 

29,143,208

 

 

 

 

 

 

 

 

 

Balance at 1 January 2014

1,795,101

30,844,552

236,745

(7,459,726)

150,131

25,566,803

(667,271)

24,899,532

 

 

 

 

 

 

 

 

 

 

 

Comprehensive Income

 

 

 

 

 

 

 

 

 

Loss for the year

-

-

-

(6,425,011)

-

(6,425,011)

(701,787)

(7,126,798)

 

Other comprehensive income

-

-

-

-

295,989

295,989

-

295,989

 

Acquisition of subsidiaries

-

-

-

-

-

-

78,580

78,580

 

Increase in subsidiary shareholding

-

-

-

(489,893)

-

(489,893)

489,893

-

 

Dilution in subsidiary shareholding

-

-

-

128,187

-

128,187

(128,187)

-

 

Disposal of subsidiaries

-

-

-

-

-

-

2,785

2,785

 

Foreign exchange differences

-

-

-

-

-

-

(171,522)

(171,522)

 

Share-based payments

-

-

-

717,001

717,001

-

717,001

 

Total comprehensive income

 

-

 

-

 

-

 

(6,069,716)

 

295,989

 

(5,773,727)

 

(430,238)

 

(6,203,965)

 

Balance at 31 December 2014

 

1,795,101

 

30,844,552

 

236,745

 

(13,529,442)

 

446,120

 

19,793,076

 

(1,097,509)

 

18,695,567

 

                           

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2014

 

 

2014

£

 

 

2013

£

Cash flows from operating activities

 

 

 

 

Loss before income tax

 

(7,313,806)

 

(4,351,417)

Adjustments for:

 

 

 

 

Depreciation of property, plant and equipment

 

65,981

 

5,508

Amortisation of intangible assets

 

1,614

 

1,616

Loss on disposal of property, plant and equipment

 

768

 

-

Share of loss of associates and joint venture

 

119,991

 

27,832

Impairment of intangible assets

 

641,767

 

-

Share-based payments

 

717,001

 

717,234

Finance income

 

(77,465)

 

(37,566)

Finance costs

 

45,671

 

35,210

 

 

(5,798,478)

 

(3,601,583)

 

Changes in working capital:

 

 

 

 

Increase in trade and other receivables

 

(962,051)

 

(245,100)

Increase in trade and other payables

 

129,757

 

167,977

 

Cash used in operations

 

 

(6,630,772)

 

 

(3,678,706)

 

 

 

 

 

Income tax received

 

19,399

 

-

 

Net cash used in operating activities

 

 

(6,611,373)

 

 

(3,678,706)

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

Investment in joint venture

 

(35,119)

 

(60,354)

Investment in associate

 

(239,189)

 

-

Cash acquired on acquisition of subsidiary

 

52,000

 

 1,973

Purchase of available for sale investments

 

(1,806,606)

 

-

Purchase of derivative financial assets

 

(100,159)

 

-

Purchase of property, plant and equipment

 

(337,469)

 

(60,861)

Proceeds from sale of property, plant and equipment

 

1,054

 

-

Interest received

 

66,661

 

37,566

Increase shareholding in subsidiary undertaking

 

-

 

(6,772)

 

Net cash used in investing activities

 

 

(2,398,827)

 

 

(88,448)

 

Cash flows from financing activities

 

 

 

 

Proceeds from loans

 

190,000

 

428,457

Proceeds from share issue

Share issue cost

 

-

-

 

29,912,750

(1,435,446)

 

Net cash from financing activities

 

 

190,000

 

 

28,905,761

 

 

 

 

 

(Decrease) / increase in cash and cash equivalents

 

(8,820,200)

 

25,138,607

Cash and cash equivalents at beginning of year

 

25,546,951

 

410,788

Exchange gains / (losses) on cash and cash equivalents

 

140,447

 

(2,444)

 

Cash and cash equivalents at end of year

 

 

16,867,198

 

 

25,546,951

 

 

 

NOTES TO THE FINANCIAL INFORMATION FOR THE YEAR ENDED 31 DECEMBER 2014

 

1.             General Information

 

The Company is a public limited company incorporated on 12 April 2012 and domiciled in England with registered number 08026888 and its shares are listed on the Alternative Investment Market (AIM) of the London Stock Exchange.

 

2              Basis of preparation

 

The preliminary results of the year ended 31 December 2014 have been extracted from audited accounts which have not yet been delivered to the Registrar of Companies.

 

The Financial Statements set out in this announcement do not constitute statutory accounts for the year ended 31 December 2014.

 

The report of the auditors on the statutory accounts for the year ended 31 December 2014 was unqualified and did not contain a statement under Section 498 of the Companies Act 2006. The Financial Statements for the year ended 31 December 2014 included in this announcement were authorised for issue in accordance with a resolution of the Board of Directors on 23 March 2015.

 

The Company is a limited liability company incorporated and domiciled in England & Wales and whose shares are quoted on AIM, a market operated by The London Stock Exchange.

 

3.             Significant accounting policies

 

The Group's financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union as they apply to the financial statements of the Group for the year ended 31 December 2014.

 

While the financial information included in this preliminary announcement has been prepared in accordance with IFRS, this announcement does not in itself contain sufficient information to comply with IFRS.

 

4.             LOSS PER SHARE

 

Basic loss per share is calculated by dividing the loss for the financial year attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year.

 

Diluted loss per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.

 

 

 

2014

£

 

2013

£

 

Loss attributable to equity holders of the company

 

 

(6,425,011)

 

 

(4,112,565)

Weighted average number of ordinary shares in issue

 

35,902,020

 

19,558,458

 

 

 

 

 

 

The loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purpose of calculating the diluted loss per ordinary share are identical to those used for basic loss per share. Whilst the parent company has share options in existence they are not dilutive as their exercise would have the effect of reducing the loss per ordinary share.

 

5.         INTANGIBLE ASSETS

 

 

 

 

Goodwill

£

 

In process research and development

£

 

 

Patents and licences

£

 

 

 

Total

£

COST

At 1 January 2013

 

-

 

 

-

 

 

15,230

 

 

 

15,230

Additions

359,220

 

267,414

 

-

 

626,634

At 31 December 2013

359,220

 

267,414

 

15,230

 

641,864

Exchange Adjustments

-

 

15,133

 

-

 

15,133

At 31 December 2014

359,220

 

282,547

 

15,230

 

656,997

 

AMORTISATION

At 1 January 2013

 

 

-

 

 

 

-

 

 

 

1,756

 

 

 

1,756

Exchange adjustments

-

 

-

 

-

 

-

Charge for the year

-

 

-

 

1,616

 

1,616

At 31 December 2013

-

 

-

 

3,372

 

3,372

Charge for the year

-

 

-

 

1,614

 

1,614

Impairment charge (i)

359,220

 

282,547

 

-

 

641,767

At 31 December 2014

359,220

 

282,547

 

4,986

 

646,753

 

NET BOOK VALUE

 

 

 

 

 

 

 

At 31 December 2014

-

 

-

 

10,244

 

10,244

 

At 31 December 2013

359,220

 

267,414

 

11,858

 

638,492

 

At 31 December 2012

-

 

-

 

13,474

 

13,474

 

 

(i)         The goodwill and in process research and development arose on the acquisition of Qlida Diagnostics, Inc. Following the review of the Group's strategy and portfolio to focus on core projects and the uncertainty and timing of the commercialisation of the underlying technology an impairment charge based on value in use was made during the year, which has been recognised in the consolidated income statement.

 

6.         INVESTMENTS

 

(a)        Associates

 

 

2014

£

 

At 1 January

 

-

Additions

239,189

Loss after tax recognised in the consolidated income statement

(10,306)

At 31 December

228,883

 

 

Set out below is the associate of the Group as at 31 December 2014:

 

Name

Country of

incorporation

Place of business

% of ownership

interest

Measurement method

 

 

 

2014

2013

 

 

 

 

 

 

 

DName - iT NV

Belgium

Belgium

38%

-

Equity

 

DName-iT BV is developing solutions to improve the quality and workflow on next generation genetic sequencing diagnostic tests.

 

(b)        Joint venture

 

Interest in joint venture

The Group has a 50% interest in a jointly controlled entity, Butterfly BioSciences LLC, which has been included in the consolidated accounts using the equity method. Butterfly BioSciences LLC is an early-stage drug discovery company that employs a proprietary random library-based technology for the discovery of novel RNAi drugs with innovative targeting properties and improved therapeutic indices, its principal place of business is the USA. Following the review of the Group's strategy and portfolio to focus on core projects and the uncertainty and timing of the commercialisation of the underlying technology an impairment charge has been made.

 

 

2014

£

 

2013

£

 

At 1 January

 

69,872

 

 

37,350

Exchange adjustments

4,694

 

-

Additions

35,119

 

60,354

Loss after tax recognised in the consolidated income statement

(17,805)

 

(27,832)

Impairment charge

(91,880)

 

-

At 31 December

-

 

69,872

 

(c)        Available for sale investments

 

Represent unquoted equity securities

 

 

 

 

 

 

2014

£

 

2013

£

 

 

 

 

 

At 1 January

 

2

 

2

Additions

 

1,806,606

 

-

At 31 December 2014

 

1,806,608

 

2

 

 

Name

Country of incorporation

% of issued share capital

Currency denomination

£

 

 

 

 

 

PDS Biotechnology Corporation

USA

14.85%

US$

1,657,030

CytoVale, Inc.

USA

2.15%

US$

149,576

Other

 

 

 

2

 

 

 

 

1,806,608

 

The Company acquired its investments in PDS Biotechnology Corporation on 15 December 2014 and its investment in CytoVale, Inc. in March 2014. In the opinion of the Directors the fair value of these investments at year end equates to their cost.

 

 

7.         DERIVATIVE FINANCIAL ASSETS

 

 

 

 

2014

£

 

2013

£

 

 

 

 

 

Warrants

 

100,159

 

-

 

 

The Group have warrants to acquire equity shares in PDS Biotechnology Corporation at an agreed price at any time prior to 15 December 2016. The warrants have been valued using the Black-Scholes Model.


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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