TIDMNSCI
RNS Number : 4343U
NetScientific PLC
07 April 2016
7 April 2016
NetScientific plc
("NetScientific" or the "Group")
NetScientific Full Year Results year ended 31 December 2015
London, UK - 7 April 2016 - NetScientific plc (AIM: NSCI), the
transatlantic healthcare technology group, announces its audited
Full Year results for the year ended 31 December 2015.
Operational highlights:
-- Appointment of new CEO, François R. Martelet, M.D., who
brings more than 20 years of biopharma experience and a proven
track record of shaping and developing businesses to deliver
shareholder returns
-- Lead portfolio companies, Vortex (95% ownership) and Wanda
(71.3% ownership), advancing well with high calibre CEOs appointed
to drive strategy and expedite commercialisation. Good progress
made across other priority portfolio companies, ProAxsis (56.5%
ownership) and Glycotest (87.5% ownership), where high calibre CEOs
have also been appointed.
-- Portfolio rationalisation completed with the divestment of non-core assets
-- Portfolio now solely healthcare with the focus on accelerating growth in priority companies
Financial highlights:
-- Capital raising of GBP18.2m (gross) successfully completed to
principally fund the acceleration of Vortex and Wanda
-- Loss after tax of GBP12.7m (2014: loss GBP7.1m) reflecting
close to commercialisation stage expenditure of lead and priority
portfolio companies
-- Available cash resources of GBP23.2m (at 31 December 2014: GBP16.8m)
Post period end highlights:
-- Wanda entered into two new commercial agreements with:
o Health Resource Solutions, a leading US high-tech home nursing
and therapy services group, for the use of its CHF/COPD product;
and
o Dignity Health, the fifth largest health provider in the US,
for its new Oncology platform
-- PDS Biotechnology signed a Cooperative Research and
Development Agreement with the US National Cancer Institute to
co-develop novel cancer immunotherapies through Phase II clinical
trials
-- Professor Stephen Smith joined the Board as Non-Executive Director
-- Appointment of Ian Postlethwaite as Chief Financial Officer
Sir Richard Sykes, Chairman of NetScientific, said:
"NetScientific's management team and portfolio focus has been
completely transformed. Under François' leadership and with a
focussed, close to commercialisation portfolio asset base, we now
have an extremely strong healthcare technology group well
positioned, not least through its majority shareholdings, to
deliver significant value to shareholders."
- Ends -
For more information, please contact:
NetScientific Tel: +44 (0)20 3514 1800
François R. Martelet,
M.D., CEO
Mark Nanovich, Interim
CFO
Investec (NOMAD and Tel: +44 (0)20 7597 4000
broker)
Gary Clarence / Daniel
Adams
Consilium Strategic Tel: +44 (0)20 3709 5700
Communications netscientific@consilium-comms.com
Mary-Jane Elliott /
Chris Gardner / Jessica
Hodgson / Chris Welsh
/ Laura Thornton
About NetScientific
NetScientific is a transatlantic healthcare technology group
with an investment strategy focused on sourcing, funding and
commercialising technologies that significantly improve the health
and well-being of people. For more information, please visit the
website at www.netscientific.net.
Joint Statement from the Chairman & CEO
NetScientific is a transatlantic healthcare technology group
with an investment strategy focused on sourcing, funding and
commercialising technologies that significantly improve the health
and well-being of people. In 2015 the Group underwent a successful
transformation with the rationalisation of its portfolio and
restructure of the management team, resulting in a streamlined
group focused on holding majority positions and delivery and
maximising shareholder value from its investments in digital
health, diagnostics and therapeutics.
François R. Martelet, M.D. was appointed as CEO and Board
Director in June 2015. He brings more than 20 years of biopharma
experience and a proven track record of shaping and developing
businesses to deliver returns. François has a broad experience in
both large and small pharma and technology companies, deep
knowledge of commercialisation, value creation and proven
managerial capability. In April 2016, the Company announced that
Ian Postlethwaite has accepted the role as Chief Financial Officer.
Ian joins the Company from Allergy Therapeutics plc where he has
held the position of Finance Director since 2002.
Over the year, the Group made significant progress with its
portfolio companies, and specifically with its lead investments,
Vortex, which is developing a novel liquid biopsy technology that
could revolutionise cancer diagnosis, monitoring and treatment and
Wanda, a digital health company with technology that uses machine
learning to derive a personalized risk score for congestive heart
failure patients. Beyond Vortex and Wanda, other priority portfolio
companies have attracted high calibre, experienced CEOs to drive
the next phase of growth to commercialisation. In November 2015 the
Group successfully completed an GBP18.2m (gross) capital raising
supported by new and existing shareholders to accelerate the
development of its lead portfolio companies.
Finance
For the year, the Group made a loss of GBP12.7 million (2014:
loss GBP7.1 million) which is split between continuing and
discontinued operations as follows:
- Continuing operations GBP11.2 million (2014: GBP6.2 million)
- Discontinued operations GBP1.5 million (2014: GBP0.9 million)
The loss principally reflects the business model where the
portfolio companies are largely subsidiaries developing their
technologies and are therefore currently loss making.
The loss from continuing operations includes GBP7.3 million
(2014: GBP3.1 million) of research and development costs primarily
incurred in Vortex and Wanda and reflects the increased level of
investment to drive the underlying technologies/products of these
key portfolio companies towards commercialisation.
General and administrative costs included within continuing
operations of GBP3.2 million (2014: GBP2.5 million) includes
central costs incurred in managing the portfolio companies,
corporate costs and sales and marketing/administrative costs
incurred by the portfolio companies. The increase during the period
represented the uplift in sales and marketing costs and
administrative costs of the portfolio companies. Other costs of
GBP1.1 million (2014: GBP0.7 million) incorporated in continuing
operations included GBP0.5 million (2014: GBPnil) for redundancy
costs associated with the restructure of the management team and
review of operations. Headcount across the Group at end of year,
excluding non-executive directors, was 47 (2014: 28).
The loss from discontinued operations comprises the operating
loss incurred by the discontinued subsidiaries during the year of
GBP0.8 million (2014: GBP0.9 million), share of loss from
associates and joint ventures of GBP0.4 million (2014: GBP0.1
million) and the net loss of GBP0.3 million (2014: GBPnil) recorded
on the disposal of these entities. The principal entities disposed
of during the year were Frontier Biosciences Limited, MOF
Technologies Limited, Morphodyne SA, Qlida Diagnostics Limited and
RoboScientific Limited. Group non-current liabilities which existed
at 31 December 2014 of GBP0.7 million and represented loans and
borrowing and other creditors of discontinued operations have been
transferred with these entities on their disposal.
Cash on the balance sheet as at 31 December 2015 was GBP23.2
million (31 December 2014: GBP16.9 million). Cash used in
operations, excluding net proceeds of GBP17.1m from capital
raising, was GBP11.0 million (2014: GBP8.8 million). The cash
balance as at 31 March 2016 was GBP19.5 million
Strategy
The business strategy is based on funding and building game
changing healthcare technology companies towards value inflection
points and eventual exit including through a trade sale or public
listing. The Group sources opportunities from global institutions,
leading technology incubators and its deep healthcare network. In
the early stages of the company's development the Group provides
extensive management support including technical guidance,
administrative support, legal, IP and commercial expertise. As
companies mature through key milestones the Group will recruit
experienced industry leading CEOs to drive the next phase of
growth, attract additional external capital and secure favourable
exits.
Portfolio Review
As at 31 December 2015, the Group had five core portfolio
companies, including two lead assets, in which it has a controlling
interest: Vortex Biosciences, Inc., Wanda, Inc., ProAxsis Ltd,
Glycotest, Inc. and Glucosense Diagnostics Limited. It also has a
material investment in PDS Biotechnology Corporation., and five
seed stage Investments: EpiBone Inc., G-Tech Inc., Longevity
Biotech Inc., Neumitra Inc., and CytoVale Inc.
The Group will continue to focus on the five core portfolio
companies and actively manage the remaining portfolio, seeking 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, with a view to maximising shareholder
value and generating funds for re-investment in the pipeline.
Portfolio companies
Vortex Biosciences
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Vortex Biosciences is a US based cancer diagnostic company,
developing a novel liquid biopsy automated instrument (VTX-1) and
microfluidic cartridge for the isolation of circulating tumour
cells from whole blood without the need for any pre-treatment. The
label-free technology enables high purity and collection efficiency
of intact circulating tumour cells in less than an hour. The
technology enables researchers and clinicians to non-invasively
capture, identify, analyse and enumerate tumour cells for use in
downstream clinical applications, such as cancer diagnosis and
monitoring, personalised medicine, drug development, and cancer
research in the estimated US$22 billion liquid biopsy market (JP
Morgan Liquid Biopsy Report - 27 May, 2015).
Gene Walther was appointed as CEO on 4 January 2016. Gene brings
over 20 years' impressive experience as a leading diagnostics
executive. Gene was the Deputy Director, Diagnostics, for the Bill
& Melinda Gates Foundation, Executive Chairman of the Board of
GenturaDx where he led this start-up diagnostics firm through
product development leading to its acquisition by Luminex. He spent
11 years at Novartis as President and Global Head of Diagnostics
and several roles at Chiron including President and Vice President
across the diagnostics and global commercial development teams. In
addition, several key hires were made during the first quarter of
2016 including a Chief Commercial Officer, Vice President of
Manufacturing and Director of Quality.
During 2015, Vortex made significant progress on both the
development of VTX-1 instrument and the integrated microfluidic
cartridge. In addition, Vortex was granted a critical US patent
which covers its core technology of inertial microfluidics and its
application to the separation and collection of cells of interest
including circulating tumour cells. The patent also covers
collection of circulating tumour cells from the chip for downstream
analysis such as counting, cytology and DNA sequencing. Alongside
three previously issued patents, this grant strengthens Vortex's
global market position as the company prepares to commercialise
VTX-1. ISO certified contract manufacturing partners for both the
instrument and the microfluidic cartridge have been selected and
will be transitioning to scale manufacturing to support
placements.
The new management team has reviewed previous commercialisation
plans and now intends to ship the VTX-1 instrument to selected
leading US researchers for Beta testing in the second quarter of
2016. Additionally, the VTX-1 will be introduced to the broader
cancer research market at the American Association for Cancer
Research in New Orleans on 17-20 April, 2016. Vortex continues to
drive towards its key milestone of commercial launch into the
clinical research market in 2017.
NetScientific shareholding in Vortex is 95% and as at 31
December 2015, it has invested GBP5.6 million. Grant funding
received to develop Vortex's underlying technology was GBP1.6
million.
Wanda
Wanda is a San Francisco based digital health company
commercialising advanced clinical decision support software. Wanda
aims to significantly reduce hospitalisation risk, and improve the
quality of life, for people with chronic conditions, initially
focused on congestive heart failure (CHF). In the US chronic
disease accounts for 80% of the total health care bill and
represents a US$1.4 trillion expenditure, a significant proportion
of which is avoidable through better management and appropriate
clinical interventions.
Steve Curd joined as CEO in September 2015. He has more than 20
years' experience in driving growth for digital health companies,
commercialising products and delivering exits. Steve has helped
secure 15 M&A transactions and numerous successful exits for
digital health companies. Most recently, Steve was the COO of
NantHealth, a healthcare company converging biomolecular medicine
and bioinformatics with technology services, where he was
responsible for advancing its product portfolio, driving
improvements in efficiency and improving client satisfaction. Other
notable positions include CEO at CareInSync, CIO at UnitedHealth
Group, COO at WebMD and CEO at VantageMed. The existing team was
strengthened during the year as headcount grew from 8 to 17,
including the appointment of a Chief Collaboration Officer to drive
commercialisation.
During 2015, Wanda completed development of its Congestive Heart
Failure (CHF) algorithms, and added analytics for Chronic
Obstructive Pulmonary Disease (COPD), as well as a combined
CHF/COPD predictive capability. As oncology diagnostic and
therapeutic techniques have continued to advance, Wanda added the
capability to coordinate decision support for oncology care teams
in an effort to help relegate most cancers to the category of
chronic conditions. Subsequent to a complete business review by the
new management team it was decided to restructure the Triventis
collaboration with iMPak Health and it is likely that Triventis
will be dissolved with there being no financial obligation to
NetScientific with regards to dissolution. The Triventis
collaboration has provided valuable insight and learning about the
market's expectations for the provision of a digital health
solution for managing chronic diseases. This has enabled the team
to clearly define the optimum solution for target end-users.
In early 2016 Wanda signed a contract with a leading US hi-tech
home nursing and therapy services group, Health Resource Solutions
('HRS'), for the use of its CHF/COPD product. In addition, Wanda
signed a collaborative agreement with the fifth largest health
provider organization in the United States (Dignity Health) to
launch its new oncology platform (Oncoverse). With a new
experienced CEO in place, a world-class Silicon Valley team formed
and commercial products on the market, Wanda now plans to seek
external funding in 2016 to capitalise on the significant
opportunities in the digital healthcare space.
NetScientific shareholding in Wanda is 71.3% and as at 31
December 2015, it has invested GBP5.1 million. Grant funding
received to develop Wanda's underlying technology was GBP7.7
million.
ProAxsis
ProAxsis is a medical diagnostics company, based in Northern
Ireland, developing a range of products for the capture, detection
and measurement of active protease biomarkers of diseases. The
rapid and easy-to-use tests ProAxsis has developed incorporate
patented ProteaseTags(R); smart molecules which trap an active
protease within a complex biological sample and enable a visual
readout of its presence. The initial applications for the
technology are focused on managing the chronic respiratory
diseases, Cystic Fibrosis (CF) and Chronic Obstructive Pulmonary
Disease (COPD), where exacerbations have a major impact on the
long-term prognosis of patients. There are 70,000 patients
diagnosed with CF worldwide and 35.7m patients with COPD in the US
and EU alone.
Dr. David Ribeiro was recruited as CEO in October 2015. He has
extensive experience in commercialising products within chronic
diseases, having previously held senior management roles at Solvay
Healthcare, Encysive Pharmaceuticals, Pfizer and Pharmaxis
Pharmaceuticals Limited.
ProAxsis made excellent progress in 2015 with the commercial
launch of its immunoassay kit for research labs, as well as
securing its first customers, including a major pharma company.
Separately, the company made significant progress with the
development of its point-of-care test for neutrophil elastase,
which is expected to be ready for commercialisation in early 2017.
ProAxsis will seek to raise additional funds in 2016 to principally
develop its point-of-care test (NEATstik) and fund a clinical trial
for COPD.
NetScientific shareholding in ProAxsis is 56.5% and as at 31
December 2015, it has invested GBP0.1 million. Grant funding
received to develop ProAxsis's underlying technology was GBP1.0
million.
Glycotest
Glycotest is a US based liver diagnostics company seeking to
commercialise new and unique blood tests for life threatening liver
cancers and fibrosis-cirrhosis with exclusive world-wide rights to
over 50 patent-protected serum protein biomarkers. Glycotest's lead
product is its HCC panel, a biomarker panel driven by a proprietary
algorithm for curable early-stage hepatocellular carcinoma (HCC),
the most common form of primary liver cancer. The market for HCC
testing is large and growing with currently three million patients
and in excess of US$800m in the US alone.
In late 2015, Larry Cohen was appointed CEO. Larry is a
diagnostic industry leader who has held executive positions at
large diagnostic companies such as Ortho-Clinical Diagnostics
(J&J), International Technidyne Corporation (ITC), the
diagnostic division of Thoratec and Beckman Instruments. He has
also been CEO of venture backed start-ups such as HemoSense
(acquired by Alere), SenGenix and Exalenz Bioscience (TASE).
In 2015, a 208 patient head-to-head clinical study was performed
which demonstrated the excellent performance of the Glycotest HCC
panel's ability to detect curable, early-stage liver cancer (HCC)
versus currently used blood tests.
In the first quarter of 2016, Glycotest created a Medical
Advisory Board consisting of experts in hepatology and molecular
diagnostics. The aim for 2016 is to accelerate commercialisation by
seeking additional external financing to develop commercial grade
kits for use in a CLIA laboratory to be opened in late 2016 or
early 2017.
NetScientific shareholding in Glycotest is 87.5% and as at 31
December 2015, it has invested GBP1.2 million. Grant funding
received to develop Glycotest's underlying technology was GBP5.9
million.
Glucosense
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Glucosense is developing a non-invasive glucose sensor, which
has a number of potential applications as a replacement for current
invasive tests that are inconvenient and uncomfortable for the
patient. These include a partial replacement for finger-prick
testing, continuous non-invasive glucose monitoring and as a
wearable hypoglycaemia-alert device. According to the International
Diabetes Federation, in 2015 there were an estimated 415 million
adults worldwide with diabetes, including 193 million who are
undiagnosed, and a further 318 million adults are estimated to have
impaired glucose tolerance.
In 2015 the company continued the development of a second
generation prototype to support the next phase of clinical testing.
A full time Programme Director was appointed in July 2015 to
oversee this work and a number of technical expert advisors have
subsequently been engaged.
NetScientific shareholding in Glucosense is 60.7% and as at 31
December 2015, it has invested GBP0.7 million.
PDS
PDS is a clinical stage immunotherapy company developing a
next-generation of simpler, safer and more effective
immunotherapies for cancer and infectious diseases. Versamune(R),
its novel synthetic nanoparticle platform technology, activates
multiple immunological mechanisms which direct the targeting of
cancer and infectious disease by the immune system.
In May 2015 PDS announced positive preliminary data showing that
its lead cancer immunotherapy treatment, PDS0101, has generated
strong T-cell responses in pre-cervical cancer. In February 2016
PDS signed a Cooperative Research and Development Agreement with
the National Cancer Institute, a division of the US National
Institutes of Health. The goal is to co-develop novel cancer
immunotherapies through Phase II clinical trials that will start in
2016 and 2017. PDS has recently strengthened its senior management
team with the recruitment of a Chief Medical Officer and VP of Drug
Development and Manufacturing.
NetScientific has invested GBP1.76m for a 14.85% shareholding in
PDS.
Board changes
Post year end, the Group was pleased to announce the appointment
of Professor Stephen Smith as Non-Executive Director. Stephen has
held senior leadership roles in the NHS and academia. He has had a
long and distinguished career as a clinician scientist, Head of
Department, Dean and CEO with the Medical Research Council,
University of Cambridge, Imperial College, London and Imperial
College Healthcare NHS Trust. During his career, Stephen has also
spun two companies out of Cambridge - Metris Therapeutics Ltd and
GNI Group Ltd. GNI was established as a start up in Japan in 2001
and successfully achieved an Initial Public Offering (IPO) on the
Tokyo Stock Exchange six years later.
In addition, Ian Postlethwaite has accepted the role of Chief
Financial Officer of the Group. Ian has been the Finance Director
of Allergy Therapeutics plc for 14 years and has been a significant
contributor to the success of the company. During this time Allergy
Therapeutics became listed on AIM, achieved a number of financial
goals, including two fund raisings in 2015 to support the company's
clinical and other development plans, and has growing revenues from
products on sale in Europe.
We wish to thank past Directors for their valuable contributions
to Netscientific.
Outlook
In 2015 the Group underwent a significant transformation with
key management changes, including the appointment of a new
blue-chip Group CEO and CFO and streamlining of assets resulting in
a tightly run, highly focused healthcare portfolio. Following the
successful capital raising in November 2015 we are able to
accelerate key portfolio companies towards major milestones and
commercialisation. The prime focus in 2016 across the Group is on
execution and delivery.
We remain very encouraged by the quality of our priority
portfolio companies where we have been able to recruit outstanding
CEOs in their respective fields to complete the process of bringing
the cutting-edge technologies to commercialisation. We believe
these leaders have the track record and experience needed to drive
the next phase of commercial growth and attract additional third
party validation capital, which will lead to significant
shareholder value creation. We will continue to focus heavily in
these companies throughout 2016.
Sir Richard Sykes François R.
Martelet, M.D
Non-Executive Director Chief Executive Officer
and Chairman
6 April 2016 6 April 2016
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2015
Notes 2015 2014
GBP GBP
Continuing Operations
----------------------------------------- ------ --------------- --------------
Revenue 78,577 -
Cost of sales (6,447) -
----------------------------------------- ------ --------------- --------------
-
Gross profit 72,130
Other operating income 43,864 24,338
Research and development costs (7,256,285) (3,098,067)
General and administrative costs (3,182,454) (2,495,450)
Other costs (1,077,110) (717,001)
Loss from operations (11,399,855) (6,286,180)
Finance income 77,692 77,435
Finance expense (137) -
Loss before taxation (11,322,300) (6,208,745)
Income tax credit 93,550 29,821
----------------------------------------- ------ --------------- --------------
Loss for the year from continuing
operations (11,288,750) (6,178,924)
Discontinued Operations
----------------------------------------- ------ --------------- --------------
Loss for the year from discontinued
operations 5 (1,517,696) (947,874)
----------------------------------------- ------ --------------- --------------
Loss for the year (12,746,446) (7,126,798)
----------------------------------------- ------ --------------- --------------
Loss attributable to:
Owners of the parent 4 (10,841,924) (6,425,011)
Non-controlling interests (1,904,522) (701,787)
----------------------------------------- ------ --------------- --------------
(12,746,446) (7,126,798)
----------------------------------------- ------ --------------- --------------
Basic and diluted loss per share from
continuing and discontinued operations
attributable to owners of the parent
during the year:
Continuing operations (25.4p) (15.7p)
Discontinued operations (3.0p) (2.2p)
From loss for the year (28.4p) (17.9p)
----------------------------------------- ------ --------------- --------------
CONSOLIDATED INCOME STATEMENT AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2015
2015 2014
GBP GBP
Loss for the year (12,746,446) (7,126,798)
Items that may be subsequently reclassified
to profit or loss:
Exchange differences on translation
of foreign operations 245,443 295,989
--------------- --------------
Total comprehensive loss for the year (12,501,003) (6,830,809)
--------------- --------------
Attributable to:
Owners of the parent (10,596,481) (6,129,022)
Non-controlling interests (1,904,522) (701,787)
--------------- --------------
(12,501,003) (6,830,809)
--------------- --------------
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 2015
2015 2014
Notes GBP GBP
ASSETS
NON-CURRENT ASSETS
Intangible assets 513 10,244
Property, plant and equipment 285,015 348,245
Investments in equity accounted associates - 228,883
Investments in equity accounted joint
ventures - -
Available for sale investments 7 1,806,608 1,806,608
Derivative financial assets 8 100,159 100,159
Other receivables 753,583 545,606
-------------- --------------
2,945,878 3,039,745
-------------- --------------
CURRENT ASSETS
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Trade and other receivables 559,775 853,022
Cash and cash equivalents 23,239,047 16,867,198
-------------- --------------
23,798,822 17,720,220
-------------- --------------
TOTAL ASSETS 26,744,700 20,759,965
-------------- --------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (2,156,180) (1,281,242)
Loans and borrowings (50,137) (43,250)
-------------- --------------
(2,206,317) (1,324,492)
-------------- --------------
NON CURRENT LIABILITIES
Trade and other payables - (52,537)
Loans and borrowings - (687,369)
- (739,906)
-------------- --------------
TOTAL LIABILITIES (2,206,317) (2,064,398)
-------------- --------------
NET ASSETS 24,538,383 18,695,567
-------------- --------------
ISSUED CAPITAL AND RESERVES
ATTRIBUTABLE TO THE PARENT
Called up share capital 2,553,785 1,795,101
Share premium account 47,232,755 30,844,552
Capital reserve account 236,745 236,745
Foreign exchange reserve 691,563 446,120
Retained earnings (24,371,018) (13,529,442)
-------------- --------------
Equity attributable to the owners
of the parent 26,343,830 19,793,076
Non-controlling interests (1,805,447) (1,097,509)
-------------- --------------
TOTAL EQUITY 24,538,383 18,695,567
-------------- --------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2015
Shareholders' equity
------------------------------------------------------------------------------
Foreign Non-
Share Share Capital Retained exchange controlling Total
capital premium reserve earnings reserve Total interests equity
GBP GBP GBP GBP GBP GBP GBP GBP
--------------- ---------- ------------ -------- -------------- ---------- -------------- ------------ --------------
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 subsidiary - - - - - - 78,580 78,580
Increase
in subsidiary
shareholding - - - (489,893) - (489,893) 489,893 -
Dilution
in subsidiary
shareholdings - - - 128,187 - 128,187 (128,187) -
Disposal
of
subsidiaries - - - - - - 2,785 2,785
Foreign
exchange
differences - - - - - - (171,552) (171,552)
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)
--------------- ---------- ------------ -------- -------------- ---------- -------------- ------------ --------------
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
Comprehensive
Income
Loss for
the year - - - (10,841,924) - (10,841,924) (1,904,522) (12,746,446)
Other
comprehensive
income - - - - 245,443 245,443 - 245,443
Increase
in subsidiary
shareholding - - - (170,520) - (170,520) 220,240 49,720
Disposal
of
subsidiaries - - - - - - 1,087,447 1,087,447
Foreign
exchange
differences - - - - - - (111,103) (111,103)
Issue of
share capital 758,684 17,449,727 - - - 18,208,411 - 18,208,411
Costs of
share issue - (1,061,524) - - - (1,061,524) - (1,061,524)
Share-based
payments - - - 170,868 - 170,868 - 170,868
Total
comprehensive
income 758,684 16,388,203 - (10,841,576) 245,443 6,550,754 (707,938) 5,842,816
--------------- ---------- ------------ -------- -------------- ---------- -------------- ------------ --------------
31 December
2015 2,553,785 47,232,755 236,745 (24,371,018) 691,563 26,343,830 (1,805,447) 24,538,383
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2015
2015 2014
GBP GBP
Cash flows from operating activities
Loss before income tax including discontinued
operations (12,854,407) (7,313,806)
Adjustments for:
Depreciation of property, plant and
equipment 129,831 65,981
Amortisation of intangible assets 55,336 1,614
Loss on disposal of property, plant
and equipment 3,432 768
Share of loss of associates and joint
venture 399,656 119,991
Gain on sale of associates and joint (214,331) -
venture
Loss on disposal of subsidiaries 508,046 -
Impairment of intangible assets 190,631 641,767
Provision against recoverability of 176,677 -
loan
Share-based payments 170,868 717,001
Bad debt written off 3,557 -
Foreign exchange gains (84,145) -
Finance income (77,695) (77,465)
Finance costs 51,397 45,671
---------------
(11,541,147) (5,798,478)
Changes in working capital:
Increase in trade and other receivables (54,880) (962,051)
Increase in trade and other payables 881,717 129,757
---------------- --------------
Cash used in operations (10,714,310) (6,630,772)
---------------- --------------
Income tax received 83,199 19.399
---------------- --------------
Net cash used in operating activities (10,631,191) (6,611,373)
---------------- --------------
Cash flows from investing activities
Investment in joint venture (34,981) (35,119)
Investment in associate (24,999) (239,189)
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Proceeds from sale of associate 24,999 -
Purchase of derivative financial assets (426,000) (100,159)
Proceeds from sale of derivative financial 426,000 -
assets
Disposal of discontinued subsidiaries, (109,431) -
net of cash disposed of
Purchase of property, plant and equipment (136,460) (337,469)
Proceeds from sale of property, plant
and equipment 650 1,054
Purchase of intangible assets (163,672) -
Interest received 37,786 66,661
Proceeds on change in subsidiary shareholding 720 -
Cash acquired on acquisition of subsidiary - 52,000
Purchase of available for sale investments - (1,806,606)
Net cash used in investing activities (405,388) (2,398,827)
---------------- --------------
Cash flows from financing activities
Proceeds from borrowings 50,000 190,000
Proceeds from share issue 18,208,411 -
Share issue cost (1,061,524) -
Net cash from financing activities 17,196,887 190,000
---------------- --------------
Increase / (decrease) in cash and
cash equivalents 6,160,308 (8,820,200)
Cash and cash equivalents at beginning
of year 16,867,198 25,546,951
Exchange gains on cash and cash equivalents 211,541 140,447
---------------- --------------
Cash and cash equivalents at end of
year 23,239,047 16,867,198
---------------- --------------
NOTES TO THE FINANCIAL INFORMATION FOR THE YEAR ENDED 31
DECEMBER 2015
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 2015 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
2015.
The report of the auditors on the statutory accounts for the
year ended 31 December 2015 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 2015 included
in this announcement were authorised for issue in accordance with a
resolution of the Board of Directors on 6 April 2016.
3. Significant accounting policies
The Group financial information has been prepared in accordance
with International Financial Reporting Standards as adopted by the
European Union that are effective for accounting periods beginning
on or after 1 January 2015.
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
The basic and diluted loss per share is calculated by dividing
the loss for the financial year by the weighted average number of
ordinary shares in issue during the year. Potential ordinary shares
from outstanding options at 31 December 2015 of 3,081,936 are not
treated as dilutive as the entity is loss making
2015 2014
GBP GBP
------------------------------------- ------------- ------------
Loss attributable to equity holders
of the Company
Continuing operations 9,697,459 5,636,685
Discontinued operations 1,144,465 788,326
------------- ------------
Total (10,841,924) (6,425,011)
------------- ------------
Number of shares
Weighted average number of ordinary
shares in issue 38,228,552 35,902,020
5. DISCONTINUED OPERATIONS
Following a review of the Group's strategy and portfolio to
focus on core projects, certain subsidiaries, associates and joint
ventures were disposed of during the year.
The results of the discontinued operations, which have been
included in the consolidated income statement, were as follows.
Year ended Year ended
2015 2014
GBP GBP
------------------------------------------- ------------ ------------
Revenue 50,928 51,921
Cost of sales (24,244) (17,732)
------------ ------------
Gross profit 26,684 34,189
Other operating income 404,001 266,867
Research and development costs (1,149,716) (542,949)
General and administrative costs (68,448) (55,769)
Impairment of intangible assets - (641,767)
Loss from operations (787,479) (939,429)
Finance income 3 29
Finance expenses (51,260) (45,671)
Share of loss of associates and joint
venture (399,656) (119,991)
Loss before taxation (1,248,392) (1,105,062)
Attributable tax credit (14,411) (157,188)
------------ ------------
Loss after tax (1,223,981) (947,874)
------------ ------------
Gain on sale of associates and joint 214,331 -
venture
Loss on divestment of subsidiaries (508,046) -
Attributable tax expense - -
------------ ------------
Loss from sale of discontinued operations (293,715) -
after tax
------------ ------------
Loss for the year (1,517,696) (947,874)
------------ ------------
Subsidiaries disposed of during the year:
Proportion
Proportion of ownership
of interest
Country ownership held by non-controlling
of interest interests
incorporation at 31 December at 31 December
Name or registration 2014* 2014*
--------------------------- ------------------ --------------- ------------------------
MOF Technologies Limited UK 51% 49%
RoboScientific Limited UK 80% 20%
Nearfield Communications
Limited UK 100% -
Watermass Limited UK 100% -
Advanced BioSensors,
Inc. USA 37% 63%%
Advanced Cardiotech,
Inc. USA 87.5% 12.5%
Cardio-Scientific,
Inc. USA 100% -
Moftek, Inc. USA 100% -
Qlida Diagnostics,
Inc. USA 51.2% 48.8%
Morphodyne SA Swiss 60% 40%
* Interests were unchanged at time of disposal.
Associates disposed of during the year:
Name
--------------------
DName-iT NV
Frontier BioSciences
Limited
Joint venture disposed of during the year:
Name
-----------------------
Butterfly BioSciences
LLC
6. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
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The Group had the following principal subsidiaries at 31
December 2015:
Proportion Proportion
of ownership of ownership
Proportion Proportion interest interest
of of held by held by
ownership ownership non-controlling non-controlling
Country interest interest interests Interests
of at 31 at 31 at 31 at 31
incorporation December December December December
Name or registration 2015 2014 2015 2014
--------------------------- ------------------ ---------- ---------- ---------------- ----------------
NetScientific UK Limited UK 100% 100% - -
ProAxsis Ltd UK 56.5% 56.5% 43.5% 43.5%
Glucosense Diagnostics
Limited UK 60.7% 100% 39.3% -
NetScientific America,
Inc. USA 100% 100% - -
Vortex BioSciences,
Inc. (i) USA 95% 95% 5% 5%
Wanda, Inc. (i) USA 71.3% 71.3% 28.7% 28.7%
Glycotest, Inc. (i) USA 87.5% 87.5% 12.5% 12.5%
Triventis Health LLC
(ii) USA 55% - 45% -
For all undertakings listed above, the country of operation is
the same as its country of incorporation or registration.
(i) Options have been issued by Vortex BioSciences, Inc., Wanda,
Inc. and Glycotest, Inc. which if exercised would dilute the
Company's shareholding by 19%, 14% and 14% respectively.
(ii) On 27 April 2015, the Group subscribed for a 55% interest
in Triventis Health LLC, a digital health sales and marketing
company. The price paid for the interest was US$0.55. Triventis
Health LLC was formed on 20th April 2015 and was dormant and did
not trade until 27 April 2015.
7. AVAILABLE FOR SALE INVESTMENTS
Represent unquoted equity securities
2015 2014
GBP GBP
-------------------------------------- ------------ ------------
At 1 January 1,806,608 2
Additions - 1,806,606
--------------------------------------- ------------ ------------
At 31 December 1,806,608 1,806,608
--------------------------------------- ------------ ------------
Country of % of issued Currency
Name incorporation share capital denomination GBP
------------------------------ --------------- -------------- ------------- -----------
PDS Biotechnology Corporation USA 14.85% US$ 1,657,030
CytoVale, Inc. USA 2.15% US$ 149,576
Other 2
----------------------------------------------- -------------- ------------- -----------
1,806,608
---------------------------------------------- -------------- ------------- -----------
The shares in the above investments are not quoted in an active
market and their fair value cannot be reliably measured. As such
the investments have been measured at cost less accumulated
impairment.
8. DERIVATIVE FINANCIAL ASSETS
2015 2014
GBP GBP
---------- -------- --------
Warrants 100,159 100,159
-------------- -------- --------
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 and a level 3 fair value hierarchy, given the
unobservable data for volatility. This valuation has not changed in
the year as the market value of the equity shares in PDS
Biotechnology Corporation cannot be reliably measured.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR IFMTTMBMMTRF
(END) Dow Jones Newswires
April 07, 2016 02:00 ET (06:00 GMT)
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