TIDMNSCI
RNS Number : 3291J
NetScientific PLC
29 March 2018
NetScientific plc
("NetScientific" or the "Group")
NetScientific Full Year Results for the year ended 31 December
2017
London, UK - 29 March 2018 - NetScientific plc (AIM: NSCI), the
transatlantic healthcare IP commercialisation Group, announces its
full year audited results for the year ended 31 December 2017
(1)
Financial highlights (including post-period end highlights)
-- Narrowed losses after tax to GBP9.4 million (2016: loss
GBP13.1 million) reflecting progression of portfolio companies and
additional reduction in Group central costs
o Three portfolio companies have progressed to commercialisation
and two companies remain in the development phase
o Losses also reduced following sale of OncoVerse and
restructuring of Wanda
-- Cash and cash equivalents of GBP6.9 million (2016: GBP9.5 million)
-- Cash used in operations was reduced to GBP10.7 million (2016: GBP12.9 million)
-- The Group gained cash from investing activities due to the
sale of OncoVerse for GBP1.5 million, and a placing of 17,962,362
shares raising net funds of GBP7.5 million in June 2017
-- The Group intends to raise at least GBP5.0 million before
costs via a conditional placing and subscription of new ordinary
shares in the Company, subject to shareholder approval at a General
Meeting, currently expected to be on 16 April 2018.
Operational highlights (including post-period end
highlights)
Portfolio progress:
ProAxsis Ltd ("ProAxsis")
-- Technology and portfolio of products progressing well
o NEATstik(R)
-- Registered CE Mark for measuring active neutrophil elastase
(post-period end January 2018)
-- First sale to a research laboratory conducting a respiratory
clinical trial in collaboration with a pharmaceutical company
(post-period end February 2018)
o ProteaseTag(R) Active Plasmin Immunoassay
-- Registered CE Mark and launched for application across a
broad range of diseases including lung disorders such as idiopathic
pulmonary fibrosis (IPF) and acute respiratory distress syndrome
(ARDS) (post-period end January 2018)
o ProteaseTag(R) Active Neutrophil Elastase Immunoassay
-- Commercialisation progressing well with sales acceleration in
the year
-- Data presented at the North American Cystic Fibrosis
Conference in November 2017 demonstrating greater scope of research
applications
o Partnered with National Jewish Health, a leading respiratory
hospital in the United States, for the hospital to investigate
ProteaseTag(R) technology in real-time, as a potential companion
diagnostic for a variety a range of respiratory diseases including
Cystic Fibrosis and COPD
o Partnered with a large US-based biotechnology company to
develop immunoassays for two key respiratory proteases utilising
ProteaseTag(R) technology
o Expanded distribution contract with Diagenics, which currently
sells the Neutrophil Elastase Immunoassay, to include the
distribution of the ProteaseTag(R) Active Plasmin Immunoassay in
the UK and Ireland
o Awarded grant from Innovate UK to support the development of
new protease therapeutics using ProteaseTag(R) technology
o Second licensing agreement with Queen's University Belfast for
exclusive IP rights to enable ProAxsis to further enhance its
current product offering
o Multiple abstracts on all products presented at the American
Thoracic Society Conference in May 2017
Glycotest, Inc. ("Glycotest")
-- Continued development of non-invasive blood tests for liver cancers and fibrosis-cirrhosis
o Positive clinical results from clinical evaluation of its HCC
Panel in patients with Hepatocellular Carcinoma (HCC), the most
common form of liver cancer (post-period end January 2018)
o Strengthened IP position by expanding the patent to cover the
US, Europe, China, Australia and Japan
o Glycotest continues to work with its potential partner and now
expects to close the Series A during first half of 2018
Operational highlights (including post-period end highlights)
continued
Vortex Biosciences, Inc. ("Vortex")
-- Commercial progress, peer-reviewed data and further research
to validate its circulating tumour cell (CTC) technology
o Launched the VTX-1 Liquid Biopsy System into the research
market at the Molecular Medicine Tri Conference (Tri-Con) in
February 2017 with key placements including UCLA and Stanford
University
o First commercial sale of the VTX-1 Liquid Biopsy System
o Multiple abstracts published in:
-- Nature Communications and presented at American Association
for Cancer Research (AACR) Annual Meeting in April 2017 further
validating its technology and adding to a growing body of
literature on the patented microfluidic technology, underscoring
the role it can play in enhancing our understanding of cancer
biology
-- Nature Partner Journals Genomic Medicine demonstrating the
use of its CTC technology in capturing and examining CTCs from
patients with colorectal cancer
-- Nature Scientific Reports describes the use of the Vortex's
technology in capturing CTCs, in combination with the use of a
novel immunofluorescence assay, for measuring programmed cell death
ligand 1 (PD-L1) expression on the surface of the CTCs from
patients with metastatic NSCLC (post-period end February 2018)
o Two clinical trials initiated in collaboration with UCLA to
evaluate the use of CTC technology in stratifying suitable patients
with Non-Small Cell Lung Cancer (NSCLC) for treatment with novel
immuno-oncology therapeutics
o Vortex currently has four VTX-1 Liquid Biopsy Systems placed
in leading oncology institutions' research facilities
o Vortex announced a collaboration with BioView BIOV: (TLV) for
Clinical Biomarker Identification on Circulating Tumour Cells in
March 2018
Wanda, Inc. ("Wanda")
-- Continued roll-out of remote health management technology
o Commenced roll-out of its remote health management technology
to Health Resource Solutions' patient network with the aim to
expand use of Wanda technology to all patients, following
successful trial evaluation involving congestive heart failure
patients
o Shareholding in Oncoverse, Wanda's digital health platform,
sold to BTG plc, representing a good return on investment and
successful exit from Wanda's first downstream application
o Strengthened IP to significantly extend protection of Wanda's
technology across US applied for remote health and patient
management
PDS Biotechnology Corporation ("PDS")
-- Continued research into application in combination therapies
o Collaboration with Merck & Co for the evaluation of the
combination of its Versamune(R)-based PDS0101 immunotherapy
treatment with Merck & Co's anti-PD-1 therapy, KEYTRUDA(R)
(pembrolizumab) in a Phase 2 clinical trial in patients with head
and neck cancer and high-risk human papillomavirus-16 (HPV16)
infection
o PDS aims to complete a financing in H2 2018, providing the
additional funds required to initiate several planned clinical
trials, including the collaboration with Keytruda, Merck's leading
checkpoint inhibitor
Commenting on the Group's 2017 full year results, Francois
Martelet, CEO of NetScientific, said:
"The Group made some excellent progress over the course of year,
with all of our core portfolio companies continuing to advance
towards their strategic and commercial goals. We have been
encouraged by the commercial progress made by Vortex and ProAxsis,
both of which launched products and registered initial sales during
the period, and Wanda, which continues to expand its technology
into the fast-growing digital health market. With the launch of a
GBP5.0 million fundraise, we are well placed to continue this
progress and we look forward to further value catalyst as we move
further into 2018."
(1) extracted from audited accounts that have not yet been
delivered to Companies House)
For more information, please contact:
NetScientific Tel: +44 (0)20 3514 1800
François R. Martelet,
M.D., CEO
Ian Postlethwaite, CFO
Stifel Nicolaus Europe Tel: +44 (0)20 7710 7600
Limited (NOMAD and broker)
Jonathan Senior/ David
Arch/ Ben Maddison
Consilium Strategic Communications Tel: +44 (0)20 3709 5700
Mary-Jane Elliott / Jessica netscientific@consilium-comms.com
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 with chronic diseases. For more
information, please visit the website at www.netscientific.net
This announcement contains certain forward-looking statements
that are based on current expectations or beliefs, as well as
assumptions about future events. By their nature, these statements
involve risk and uncertainty because they relate to future events
and circumstances. Actual outcomes and results may differ
materially from any outcomes or results expressed or implied by
such forward looking statements. Any forward-looking statements
made by or on behalf of the Group are made in good faith based on
the information available at the time the statement is made. No
representation or warranty is given in relation to these
forward-looking statements, including as to their completeness or
accuracy or the basis on which they were prepared, and undue
reliance should not be placed on them. The Group does not undertake
to revise or update any forward-looking statement contained in this
announcement to reflect any changes in its expectations with regard
thereto or any new information or changes in events, conditions or
circumstances, save as required by law and regulations. Nothing in
this announcement should be construed as a profit forecast.
CHAIRMAN'S AND CHIEF EXECUTIVE OFFICER'S STATEMENT
NetScientific PLC ("NetScientific") is a transatlantic
healthcare IP commercialisation Group focused on sourcing, funding
and commercialising technologies and companies that have the
potential to treat chronic disease and significantly improve the
health and well-being of people.
The UK is the global hub for IP commercialisation with
transatlantic businesses selecting the UK as listing destination
due to the strength of the peer group and understanding of the
sector. The Group is highly international in its approach and
differentiated by its global network and majority shareholding
positions in its portfolio assets.
In 2015 and 2016, the core portfolio was significantly
rationalised to just 6 companies which included Glucosense. The
decision to terminate investment in Glucosense was made in 2016 as
the initial data set could not be replicated and the company was
formally closed in February 2017, leaving the Group with 5 core
portfolio companies. Over the course of 2017, the Group's core
portfolio companies have continued to make significantly progress
in driving their breakthrough technologies towards
commercialisation.
The Group has been able to de-risk the core portfolio from a
development standpoint - a significant achievement in a small
company setting that few other companies in the sector have been
able to achieve. By late 2017, three portfolio companies; ProAxsis,
Vortex and Wanda, have reached the commercial stage, de-risking
NetScientific's portfolio from a development standpoint which is an
important achievement for the Company.
2017 saw continued progress across the portfolio as the
companies strengthened their individual positions in working toward
raising new funds and developing partnerships with industry
leaders. In addition, NetScientific intends to explore potential
transformational M&A opportunities for the Group with a view to
gaining critical mass in the IP commercialisation sector, gaining
access to new shareholders and adding additional investments to its
current portfolio.
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.
ProAxsis made significant operational progress during 2017. In
September, ProAxsis was awarded European CE Mark for its
NEATstik(R) platform, a first-in-class diagnostic tool for
monitoring lung inflammation and infection in patients with
respiratory diseases such as COPD and bronchiectasis. Post period
end the Company recorded its first NEATstik(R) sale to a research
laboratory conducting a respiratory clinical trial in collaboration
with a pharmaceutical company. During 2017 the Company was awarded
two grants from Innovate UK, demonstrating substantial external
validation of ProAxsis' ProteaseTag(R) technology.
To support the commercialisation of its ProteaseTag(R) assays
ProAxsis expanded its contract with Diagenics, which is currently
selling the Neutrophil Elastase Immunoassay, to include the
recently launched CE Marked Plasmin Immunoassay across the UK and
Ireland.
ProAxsis plans further expansion of its product range, including
the launch of assays for the research market: proteinase-3,
cathepsin G, pancreatic elastase in addition to a high sensitivity
Neutrophil Elastase Immunoassay which was registered with a CE mark
in January 2018. To facilitate this further product expansion, the
Company signed a second licensing agreement with Queen's University
Belfast for exclusive IP rights.
During the period the Company signed a partnership agreement
with National Jewish Health, a leading respiratory hospital in the
United States, for the hospital to investigate ProteaseTag(R)
technology in real-time, as a potential companion diagnostic for a
variety a range of respiratory diseases including Cystic Fibrosis
and COPD. The Company also partnered with a large US-based
biotechnology company to develop immunoassays for two key
respiratory proteases utilising ProteaseTag(R) technology. The
Company also presented multiple abstracts on all products at the
American Thoracic Society Conference in May 2017.
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. During the year
Glycotest successfully expanded its IP portfolio with 11 patents
protecting multiple aspects of Glycotest's proprietary liver
disease diagnostic platform.
Glycotest now holds patents that cover US, China, Europe, Japan
and Australia based on the use of over 50 unique glycoprotein
biomarkers and related assay technology for the diagnosis of liver
cancers and other liver diseases.
Vortex Biosciences
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.
Vortex formally launched VTX-1 in the R&D sector at
Tri-Conference on Molecular Medicine on 21 February 2017. Since the
launch, Vortex has now sold or placed the VTX-1 into four leading
cancer centres in the US. Vortex continues to transition from being
a pure device company to a clinical diagnostic company. During the
period the company initiated two clinical trials in collaboration
with UCLA to evaluate the use of CTC technology in stratifying
suitable patients with Non-Small Cell Lung Cancer (NSCLC) for
treatment with novel immuno-oncology therapeutics.
Vortex has been focused on building relationships with strategic
partners and has published multiple peer-reviewed papers in
publications. In November, a paper entitled "Workflow optimization
of whole genome amplification and targeted panel sequencing for CTC
mutation detection" was published in Nature Partner Journals (npj)
Genomic Medicine in collaboration with Stanford University.
Additionally, in March, Vortex announced the publication "Profiling
protein expression in circulating tumour cells using microfluidic
western blotting" in Nature Communications in collaboration with
the University of California, Berkeley. The papers contribute to a
growing body of research which highlights the potential for CTCs to
provide deeper clinical insight in cancer biology.
In March 2018, Vortex announced a collaboration with BioView
Ltd, a provider of automated cell imaging and analysis solutions,
to develop an integrated workflow and identify biomarkers on
circulating tumour cells (CTCs) from blood samples and the purpose
is to provide deeper insights into cancer biology for clinicians.
This represents a first step for Vortex as it transitions towards
being able to address the clinical market through diagnostic
insights.
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).
Wanda, has developed an artificial intelligence (AI) platform
for remote patient monitoring that enables care teams to help
patients live longer, with more efficient and lower cost care. This
is principally achieved through reducing the readmission rates of
patients post treatment. Foad Dabiri, formerly CTO of Wanda, became
CEO in December 2016 and good commercial progress was subsequently
seen over the course of that year. During 2017, Wanda was able to
successfully exit its first downstream application, OncoVerse, a
digital health platform designed to allow cancer patients' care
teams to collaborate and allow clinicians across all disciplines to
work together to determine the most effective treatment plan for
their patients. OncoVerse was initially conceived by a Dignity
Health physician and two administrators, who wanted a tool to
improve team collaboration, especially when evaluating complex
cancer cases and determining the appropriate treatment plans for
patients. Wanda was also granted two additional patents during 2017
which significantly extend protection for the core technology used
in Wanda's software application for remote health and patient
management.
PDS Biotechnology Corporation
PDS is a clinical stage immunotherapy company developing a
next-generation of simpler, safer and more effective
immunotherapies for cancer and infectious diseases. PDS
Biotechnology Corporation ("PDS") continued to see strong progress
with its T-cell activating technology platform, Versamune(R), which
combines three critical attributes for an effective immunotherapy:
T-cell induction, reduced tumour suppression and priming of a
potent anti-tumour response without the conventional associated
toxicities.
PDS's oncology pipeline includes compounds for prostate,
ovarian, breast and colorectal cancers, in addition to its lead
PDS0101 programme for several HPV-related cancers. PDS made some
important advances through the year in progressing its lead
Versamune(R) T-cell Activating platform, and notably was able to
initiate a clinical trial agreement with Merck & Co., Inc.'s
anti-PD-1 therapy, KEYTRUDA(R) (pembrolizumab), a leading
checkpoint inhibitor in oncology, in a Phase II clinical trial.
Additionally, PDS filed for three new key patents in Q4 2017 which
help bolster the company's patent position. The Group's interest in
PDS Biotechnology is non-controlling.
Early stage Investments Portfolio
During the year the Group reviewed its five early stage
investments (the 'Early Stage Portfolio'). The review concluded
that there were no plans to invest additional funds in the Early
Stage Portfolio because it does not fit with the firm's investment
strategy of gaining majority control in early stage companies.
Limited investment has been made to date, mostly in the form of
convertible loans. Nevertheless, these investments are reviewed
periodically in tandem with the Group's business plans and
progress.
Finance
For the year, the Group made a loss of GBP9.4 million (2016:
GBP13.1 million), split between continuing and discontinued
operations as follows:
- Continuing operations GBP9.4 million (2016: GBP12.4 million)
- Discontinued operations GBPnil (2016: GBP0.7 million)
The loss reflects the business model, where the core portfolio
companies are mainly subsidiaries. Three of the core portfolio
companies are commercialising their products, with the other two
still developing their technologies; therefore, the portfolio
companies are currently loss making. The main factors contributing
to the reduced loss reported is the sale of OncoVerse and
restructuring of Wanda.
Cash
Cash on the balance sheet as at 31 December 2017 was GBP6.9
million (2016: GBP9.5 million). Cash used in operations, was
GBP10.7 million (2016: GBP12.9 million). The Group gained cash from
investing activities due to the sale of OncoVerse for GBP1.5
million and in June the Group placed a further 17,962,362 shares
raising net funds of GBP7.5 million.
Going concern
The Directors have prepared and reviewed Budget cashflows which
were approved by the Board of Directors in the Board meeting of
December 2017. The budget considered amongst other things the
timing of the Series A funding rounds of the subsidiary companies,
potential fundraise of the company and the cash position of the
Group at the beginning of 2018. After due consideration of these
forecasts and current cash resources, the Directors consider that
the Company and Group have adequate financial resources to continue
in operational existence for the foreseeable future (being at least
12 months from the date of this report), and for this reason the
financial statements have been prepared on a going concern
basis.
Board changes
Jonathan Paisner stepped down from his position as a
Non-Executive Director for NetScientific on 25 October 2017; the
Board would like to thank him for his contribution to the
Group.
Summary and Outlook
In 2017, the Group delivered on various development milestones
critical to enhancing the competitiveness and value of the
portfolio companies.
The focus of the Group during 2018 will be to continue progress
across its portfolio companies by pursuing, where relevant,
corporate deals and fundraises to help progression from technology
success to commercial success. ProAxsis expects to reach over
GBP1.0 million in revenue during 2018 and will review its financial
requirements in the second half of 2018. Glycotest is continuing
its series A discussions with a potential investor and is aiming to
close a series A in H1 2018 following an encouraging 149 Patient
study with its Chinese partner. Vortex is planning for a potential
fundraise or commercial partnership in H2 2018. Health Resource
Solution agreed to extend the use of Wanda's digital health
technology to all of its patients, which Directors expect to
complete in H1 2018.
NetScientific continues to believe that it has a world-class
portfolio of companies with high-quality science and technology,
experienced and relevant management teams, alongside business and
financing strategies that support the ongoing development of these
companies and enable them to attract third-party capital.
NetScientific also continues to explore potential corporate
development activities in order to gain scale and access to new
portfolio companies. The Board and management team remain committed
to bolstering the Group's opportunities and delivering products and
services supporting the next generation of healthcare
opportunities. NetScientific's overall mission remains to support
life-changing innovation and deliver value to its shareholders.
Sir Richard Sykes Francois R. Martelet,
M.D.
Non-Executive Director Chief Executive Officer
and Chairman
28 March 2018 28 March 2018
Consolidated Income Statement
For the year ended 31 December 2017
Notes 2017 2016
GBP000's GBP000's
Continuing Operations
---------- -----------
Revenue 386 518
Cost of sales (245) (255)
---------- -----------
Gross profit 141 263
Other operating income 238 68
Research and development costs (5,177) (7,443)
General and administrative
costs (5,281) (5,001)
Other costs (514) (316)
Loss from operations (10,593) (12,429)
Finance income 43 94
Finance expense (11) (8)
Share of loss of associate (45) (49)
Gain on sale of associate 6 1,026 -
Loss before taxation (9,580) (12,392)
Income tax credit / (charge) 202 (18)
---------- -----------
Loss for the year from continuing
operations (9,378) (12,410)
Discontinued Operations
---------- -----------
Loss for the year from discontinued
operations - (666)
---------- -----------
Total loss for the year (9,378) (13,076)
---------- -----------
Owners of the parent (8,318) (11,195)
Non-controlling interests (1,060) (1,881)
---------- -----------
(9,378) (13,076)
Basic and diluted loss per
share from continuing and
discontinued operations attributable
to owners of the parent during
the year: 4
Continuing operations (13.6p) (20.8p)
Discontinued operations (-) (1.1p)
From loss for the year (13.6p) (21.9p)
---------- -----------
Consolidated Income Statement and Other Comprehensive Income
For the year ended 31 December 2017
2017 2016
GBP000's GBP000's
Loss for the year (9,378) (13,076)
Items that may be subsequently
reclassified to profit or loss:
Exchange differences on translation
of foreign operations (374) 634
Total comprehensive loss for
the year (9,752) (12,442)
---------- -----------
Attributable to:
Owners of the parent (9,057) (10,084)
Non-controlling interests (695) (2,358)
-------- -----------
(9,752) (12,442)
-------- -----------
All other comprehensive income will be reclassified to retained
earnings on the ultimate sale of any relevant subsidiary or
investment company.
Consolidated Statement of Financial Position
As at 31 December 2017
Notes 2017 2016
GBP000's GBP000's
---------- ----------
Assets
Non-current assets
Property, plant and equipment 891 779
Investments in equity accounted
associates 6 - 357
Available for sale investments 7 2,863 2,863
Derivative financial assets 18 18
Other receivables 33 37
---------- ----------
Total non-current assets 3,805 4,054
---------- ----------
Current assets
Inventory 86 -
Trade and other receivables 1,014 1,578
Cash and cash equivalents 6,868 9,456
---------- ----------
Total current assets 7,968 11,034
---------- ----------
Total assets 11,773 15,088
---------- ----------
Liabilities
Current liabilities
Trade and other payables (777) (2,044)
Loans and borrowings (128) (128)
---------- ----------
Total current liabilities (905) (2,172)
---------- ----------
Non-current liabilities
Loans and borrowings (70) (80)
Total non-current liabilities (70) (80)
---------- ----------
Total liabilities (975) (2,252)
---------- ----------
Net assets 10,798 12,836
---------- ----------
Issued capital and reserves
Attributable to the parent
Called up share capital 3,452 2,554
Share premium account 53,839 47,233
Capital reserve account 237 237
Foreign exchange reserve 1,063 1,802
Retained earnings (43,220) (35,115)
---------- ----------
Equity attributable to the
owners of the parent 15,371 16,711
Non-controlling interests (4,573) (3,875)
---------- ----------
Total equity 10,798 12,836
---------- ----------
Consolidated Statement of Changes in Equity
As at 31 December 2017
Shareholders' equity
---------- ---------- ---------- ---------- ------------------------------------
Foreign Non-
Share Share Capital Retained exchange controlling Total
capital premium reserve earnings reserve Total interests equity
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
----------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ ----------
1 January
2016 2,554 47,233 237 (24,371) 691 26,344 (1,805) 24,539
----------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ ----------
Loss for the
year - - - (11,195) - (11,195) (1,881) (13,076)
----------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ ----------
Other
comprehensive
income
Foreign exchange
differences - - - - 1,111 1,111 (477) 634
Total
comprehensive
income - - - (11,195) 1,111 (10,084) (2,358) (12,442)
----------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ ----------
Decrease in
subsidiary
shareholding - - - 39 - 39 (20) 19
Disposal of
subsidiaries - - - 171 - 171 308 479
Share-based
payments - - - 241 - 241 - 241
----------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ ----------
31 December
2016 2,554 47,233 237 (35,115) 1,802 16,711 (3,875) 12,836
----------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ ----------
Loss for the
year - - - (8,318) - (8,318) (1,060) (9,378)
----------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ ----------
Other
comprehensive
income
Foreign exchange
differences - - - - (739) (739) 365 (374)
----------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ ----------
Total
comprehensive
income - - - (8,318) (739) (9,057) (695) (9,752)
----------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ ----------
Issue of shares
to a
non-controlling
interest - - - 5 - 5 (3) 2
Issue of share
capital 898 7,185 - - - 8,083 - 8,083
Cost of share
issue - (579) - - - (579) - (579)
Share-based
payments - - - 208 - 208 - 208
----------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ ----------
31 December
2017 3,452 53,839 237 (43,220) 1,063 15,371 (4,573) 10,798
----------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ ----------
Consolidated Statement of Cash Flows
As at 31 December 2017
Notes 2017 2016
GBP000's GBP000's
---------- ----------
Cash flows from operating activities
Loss after income tax including
discontinued operations (9,378) (13,076)
Adjustments for:
Depreciation of property, plant
and equipment 221 141
Share of loss of associate 45 49
Gain on sale of associate (1,026) -
Loss on disposal of subsidiaries - 483
Provision against recoverability
of loan 306 75
Share-based payments 208 241
Foreign exchange gains 103 (121)
Finance income (43) (94)
Finance costs 11 8
Tax (credit) / charge (202) 18
(9,755) (12,276)
Changes in working capital
Increase in inventory (87) -
Decrease / (Increase) in trade
and other receivables 308 (238)
Decrease in trade and other
payables (1,158) (364)
---------- ----------
Cash used in operations (10,692) (12,878)
---------- ----------
Income tax received 71 94
---------- ----------
Net cash used in operating
activities (10,621) (12,784)
---------- ----------
Cash flows from investing activities
Investment in associate - (363)
Proceeds from sale of associate 6 1,477 -
Costs on sale of associate 6 (167) -
Purchase of property, plant
and equipment (399) (470)
Proceeds from sale of property,
plant and equipment 2 13
Interest received 21 46
Purchase of available for sale
investments - (898)
Net cash from / (used) in investing
activities 934 (1,672)
---------- ----------
Cash flows from financing activities
(Repayment) / proceeds from
borrowings (20) 50
Proceeds on change in subsidiary
shareholding 2 20
Proceeds from share issue 8,083 -
Share issue cost (579) -
-------- ---------
Net cash from financing activities 7,486 70
-------- ---------
Decrease in cash and cash equivalents (2,201) (14,386)
Cash and cash equivalents at
beginning of year 9,456 23,239
Exchange gains on cash and
cash equivalents (387) 603
-------- ---------
Cash and cash equivalents at
end of year 6,868 9,456
-------- ---------
Notes to the Financial Information for the Year Ended 31
December 2017
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. The address of the registered office is
Anglo House, Bell Lane Office Village, Bell Lane, Amersham,
Buckinghamshire HP6 6FA.
2. BASIS OF PREPARATION
The preliminary results of the year ended 31 December 2017 have
been extracted from audited accounts which have not yet been
delivered to Companies House.
The financial information set out in this announcement does not
constitute statutory accounts for the year ended 31 December
2017.
The report of the auditors on the statutory accounts for the
year ended 31 December 2017 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 2017 included
in this announcement were authorised for issue in accordance with a
resolution of the Board of Directors on 28 March 2018.
3. SIGNIFICANT ACCOUNTING POLICIES
The Group financial statements have been prepared in accordance
with International Financial Reporting Standards as adopted by the
European Union as they apply to the financial statements of the
Group for the year ended 31 December 2017. The principal accounting
policies adopted in the preparation of the financial information
are set out below. The policies have been consistently applied to
all the years presented.
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. The Group expects to publish full financial
statements that comply with IFRS by 3 April 2018.
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 2017 of 1,812,257 are not
treated as dilutive as the entity is loss making.
2017 2016
GBP000's GBP000's
------------------------------------- ----------- -----------
Loss attributable to equity holders
of the Company
Continuing operations 8,318 10,623
Discontinued operations - 572
----------- -----------
Total 8,318 11,195
----------- -----------
Number of shares
Weighted average number of ordinary
shares in issue 61,016,509 51,075,695
-------------------------------------- ----------- -----------
5. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
The Group had the following subsidiaries at 31 December
2017:
Proportion Proportion
of ownership of ownership
interest interest
Proportion Proportion held by held by
of of non-controlling non-controlling
Country ownership ownership interests interests
of interest interest at 31 at 31
incorporation at 31 December at 31 December December December
Name or registration 2017 2016 2017 2016
--------------------- ------------------- --------------- --------------- ---------------- ----------------
NetScientific
UK Limited UK 100% 100% - -
ProAxsis Ltd* UK 56.5% 56.5% 43.5% 43.5%
Healthbox Israel
LLP* (ii) UK 50% 50% 50% 50%
IsraelScientific
Ltd* UK 100% 100% - -
NetScientific
America, Inc. USA 100% 100% - -
Vortex BioSciences,
Inc. (i) USA 95% 95% 5% 5%
Wanda, Inc. (i)(iii) USA 70.8% 70.9% 29.2% 29.1%
Glycotest, Inc.
(i) USA 87.5% 87.5% 12.5% 12.5%
5. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS continued
For all undertakings listed above, the country of operation is
the same as its country of incorporation or registration.
* Held via an intermediate holding company.
All of the ownerships shown above relate to ordinary
shareholdings.
(i) Options have been issued by ProAxsis Ltd, Vortex
BioSciences, Inc., Wanda, Inc. and Glycotest, Inc. which if
exercised would dilute the Company's shareholding by 3%, 29%, 9%
and 21% respectively.
(ii) A Deed of Termination was entered into as of 14 November
2017, with dissolution of the entity to take place following final
accounting in early 2018. The Group holds 50% of the voting shares
and has the casting vote. The Group is entitled to 80% of profits
subsequent to repayments of capital and member operational
expenses.
(iii) Following issue of further shares during the year the
Group's interest was reduced to 70.8% on 1 May 2017.
6. INVESTMENTS IN ASSOCIATE
2017 2016
OncoVerse OncoVerse
LLC LLC
GBP000's GBP000's
------------------------------------ ----------- -----------
At 1 January 357 -
Exchange movement (20) -
Additions - 406
Loss after tax recognised in
the consolidated income statement (45) (49)
292 357
Consideration on disposal of (1,477) -
interest
Cost incurred on disposal of 167 -
interest
Exchange movement (8) -
Gain on disposal after tax
recognised in the consolidated
income statement 1,026 -
------------------------------------ ----------- -----------
At 31 December - 357
------------------------------------ ----------- -----------
On 20 April 2017, the Groups subsidiary company Wanda, Inc.
disposed of its entire holding of 35.9% in OncoVerse LLC, a San
Francisco based digital health company.
7. AVAILABLE FOR SALE INVESTMENTS
Represent unquoted equity
securities
2017 2016
GBP000's GBP000's
--------------------------- ---------- ----------
At 1 January 2,863 1,807
Warrant exercised - 100
Additions - 956
At 31 December 2,863 2,863
---------------------------- ---------- ----------
Country of % of issued Currency
Name incorporation share capital denomination GBP000's
------------------ --------------- -------------- ------------- --------
PDS Biotechnology
Corporation USA 17.1% US$ 2,713
CytoVale, Inc. USA 2.15% US$ 150
Other -
------------------ --------------- -------------- ------------- --------
2,863
---------------------------------- -------------- ------------- --------
Notes to the Financial Information for the Year Ended 31
December 2017
7. AVAILABLE FOR SALE INVESTMENTS continued
Valuation of unquoted equity investments
The fair value of unlisted securities is established using
International Private Equity and Venture Capital Valuation
Guidelines (IPEVCVG). Given the nature of the Group's investments
in seed, start-up and early-stage companies, where there are often
no current and no short-term future earnings or positive cash
flows, it can be difficult to gauge the probability and financial
impact of the success or failure of development or research
activities and to make reliable cash flow forecasts.
The Group considers that fair value estimates that are based
entirely on observable market data will be of greater reliability
than those based on assumptions and accordingly where there has
been any recent investment by third parties, the price of that
investment will generally provide a basis of the valuation.
Consequently, the most appropriate approach to determine fair value
is a methodology that is based on market data, that being the price
of a recent investment.
If there are no material recent investments, the group employs a
valuation methodology to determine fair value. Where a fair value
cannot be estimated reliably due to the range of reasonably
possible fair value measurements and/or an inability to reasonable
assess the probabilities of various fair value measurements, the
investment is reported at the carrying value at the previous
reporting date unless there is evidence that the investment has
since been impaired.
At present, there is a significant range of possible fair value
estimates and the probabilities of the various estimates cannot be
reliably measured. Hence, the investments are measured at cost less
accumulated impairment.
The investment includes a warrant with an identified fair value
of GBP18k. This has been separately recognised.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LFFELVIITFIT
(END) Dow Jones Newswires
March 29, 2018 02:01 ET (06:01 GMT)
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