TIDMNSCI
RNS Number : 2869N
NetScientific PLC
29 September 2021
NetScientific plc
("NetScientific" or the "Company" or the "Group")
Interim Results for the six months ended 30 June 2021
London, UK - 29 September 2021: NetScientific Plc (AIM: NSCI),
the international life sciences and sustainability, technology
investment and commercialisation group , today announces its
interim results for the six months ended 30 June 2021.
2021 reinforced the excellent progress made to date, which is
reflected in the good half year results. The turnaround started in
2020 is largely complete, with positive developments across the
portfolio. EMV Capital is now integrated and actively contributing
to the group's operations. NetScientific has established a clear
strategy for the continued growth and success of the company,
through a well-balanced portfolio, proactive management and
structured investment programme. The emphasis now is on
consolidating the business growth and, with the benefit of the
additional funds, exploiting the potential from existing and new
opportunities in line with the strategy.
This strong performance is highlighted in the KPIs, including
50% increase in Fair Value to GBP31.9m, Net Assets increase to
GBP23m from GBP6.89m, Capital Under Advisory increase by 25% to
GBP18.2m, and in the investments and development of portfolio
companies. The Group is now secure and well positioned for future
success. We have established a robust growth trajectory,
exemplified below, with a pipeline of opportunities expected to
materialise through the rest of 2021 and beyond.
The Board would like to thank current and new shareholders for
their overwhelming vote of confidence in the new team and strategy
with the transformational GBP7.7m placement (net of costs GBP7.3m)
in June 2021.
Highlights and KPIs for the Period
During the period, the Group has continued to perform
successfully against its stated objectives and milestones, as
outlined below and in graph form here:
http://www.rns-pdf.londonstockexchange.com/rns/2869N_1-2021-9-28.pdf
NSCI Share Price:
The average share for the period was 65.6p (H1 2020: 51.2p, H2
2020 GBP59.8p), reaching at the end of period 118.5p. While this
represents significant progress since the low point of 12.5p in
early 2020, the Board remains of the view that the market
significantly undervalues the group, with current price below Fair
Value, but without taking into account growth opportunities.
Operating loss:
In line with expectations, a trading loss of GBP1,448k (H1 2020:
1,277k), reflecting the investments in team and infrastructure to
increase capacity and drive growth.
Fair Value and NAV:
Increase in "fair value" of c. 50% from GBP21.2m to GBP31.9m,
with continued growth anticipated. 'Fair Value' is unaudited
Directors' estimated value of the directly owned stakes, based on
the BVCA valuation method.
Net asset value increased to GBP23m, up from GBP6,9m at the end
of 2020 with turnaround and integration now largely complete.
Capital Under Advisory:
The Capital Under Advisory increased by c. 25% from GBP14.6m at
the end of 2000 to GBP18.2m, driven by continued deal syndication
by EMV Capital, in line with the capital light investment
model.
Subsidiaries and listed investments:
ProAxsis Ltd (100% owned subsidiary): Our Belfast-based
subsidiary specialises in respiratory and other diagnostics. The
company has had a transformative period making significant
advancements in its product range, targeting accelerated growth,
notwithstanding COVID-related delays in clinical trials restart .
This included the commercialisation of 5 novel/improved products
due for launch progressively from late 2021 and into 2022; signed
global in-licensing agreement with Astra Zeneca for COVID antibody
test; and good progress with grants and building of sales
pipeline.
Glycotest (64% holding) : Focused on the development of liver
cancer diagnostics. Enrolment and progress in the clinical trial
continued, building up valuable samples, data and productive sites.
The HCC Panel clinical validation study and algorithm training set
was delayed by technical issues, which are being progressively
worked through.
PDS Biotechnology (NASDAQ Listed, 4.7% holding) : The
Immunotherapy biopharma company is developing novel T-cell
activating cancer treatment, and infectious disease vaccine
candidates. The company has three phase 2 oncology clinical trials
in progress with multiple near-term readouts, and clinical
partnerships with Merck, MD Anderson Cancer Center and National
Cancer Institute. Interim data presented in June 2021 from the
NCI-led PDS0101 Phase 2 trial showed tumor reduction in 70% of
patients who had failed prior treatment. Further announcements are
expected in Q4 2021 and beyond. The infectious disease vaccine
programmes had further progress, including a COVID-vaccine
development programme backed by the Brazilian government.
In June 2021, NetScientific made a further investment of $500k
at $8.50 as part of a $52m placement, enabling maintenance of a
significant interest (currently at 4.7%). Market performance
remains strong, with the share price increasing from $2.14 to
$12.55, reaching a market cap of $356m (H1 2020: $31m). Fair value
of the NetScientific stake was GBP12.2m at the end of period.
EMV Capital (100% subsidiary, corporate finance arm):
EMV Capital (EMVC) was acquired as a 100% subsidiary by
NetScientific PLC in August 2020. It is now operating as the
Venture Capital/Corporate Finance arm of NetScientific, enabling
the execution of the capital light investment model of the group.
NetScientific's status and balance sheet enables the anchoring and
syndication of investments by EMVC. Investment syndication through
its growing EIS investment practice, a family office network,
wealth managers and institutional and corporate venture capital
funds. It also provides a specialised due diligence, investment
syndication and investment management capability to the Group. EMVC
has a carried interest arrangement with investors it has introduced
into its portfolio companies, thus providing additional investment
return and fees to the Group.
During the period, EMVC increased Capital Under Advisory by 25%
to GBP18.2m (2000: GBP14.6m), on the back of several transactions
(SageTech, Sofant, Pointgrab), and continued funding of portfolio
companies under existing investor arrangements (Vortex, Wanda). The
company also performed paid-for incubation and management support
services for several of the portfolio companies. Post-balance
sheet, EMVC used a GBP1m investment to co-lead a GBP12m investment
round in Cambridge-based Martlet Capital alongside Saranac Partners
and others, and announced plans to establish the follow-on
investment vehicle Marquity with expected 40% holding, enabling
selective investment in deals emerging from Martlet Capital and the
Cambridge High-tech cluster
Other portfolio company updates:
In line with our selective investment approach and following a
detailed review of the portfolio of 16 companies, we have focused
on several portfolio companies where we have, or may, take greater
direct and syndicated investment stake and influence, provide
access to follow-on funding, and add value-added through management
support and supporting internationalisation. Consequently, The
Group has invested GBP722k and syndicated over GBP3.6m in total for
portfolio companies over the last six months as we continue to grow
and add value across the enhanced portfolio.
Several direct investments were made by NetScientific in the
portfolio companies as part of the capital light investment model,
and to enable the syndication of further funds by EMVC:
Pointgrab (23% stake) : Israel-based Pointgrab is a leader in
AI-based solutions for occupancy management in Smart Buildings,
with backing by global corporates ABB Ventures and Signify. In May
2021 NetScientific participated in a GBP3.4m funding round advised
by EMV, with a GBP70k investment by NetScientific, enabling the
attraction of a further GBP1.1m to Capital Under Advisory. This
round followed EMVC's work with the Pointgrab management to help
evolve the commercial and investment strategy in response to the
major changes in working practices unleashed by COVID.
SageTech (23.8% stake): the Devon-based anaesthetic gas
recycling technology firm has developed a flexible, low-capex,
modular system allows hospitals to capture waste anaesthetic gas
exhaled by patients in reusable canisters, for recycling. EMVC
advised on a GBP2.9m funding round for SageTech Medical to
accelerate pilots and commercialisation. The investment
arrangements included a GBP200k stake by NetScientific, enabling
GBP1.9m addition to Capital Under Advisory.
Sofant (25.7% stake): The Edinburgh University spin-out is
developing an RF MEMS-based antenna for Satcoms and 5G
applications, both rapidly growing markets in the semi-conductors
space. After leading investment rounds in 2019 and 2020, EMVC led a
Convertible Loan of c.GBP900k. NetScientific participated with
GBP0.1m, with the balance from British Business Bank and EMVC
investors.
We are working actively with several other promising companies,
exploring how best to progress their ambitious growth paths, which
will be announced in due course.
Analyst Presentation: 09:30 today
Management will be hosting a presentation via web conference
today at 09:30. Analysts wishing to join should register their
interest by emailing netscientific@walbrookpr.com or by telephoning
020 7933 8780.
Ilian Iliev, CEO of NetScientific, said: "The half-year results
show the transformation in NetScientific's operational and
portfolio performance. The Group is well positioned to grow and
deliver shareholder value through its proactive and hands-on
management approach and capital light investment model. We are
continuing to identify, selectively invest in, and help to build
game-changing companies and have demonstrated the ability to
deliver significant added value. We are seeking to address the
continued disconnect between the Fair Value and growth
opportunities of the Group, and current market cap."
John Clarkson, Executive Chairman of NetScientific, said:
"Having presented a new strategy to shareholders in the summer of
2020, the excellent progress against that plan is clearly
demonstrated in the results to date. Now the turnround is largely
complete and the growth trajectory established, with the benefit of
additional funds, we are exploiting the potential from existing and
new opportunities. Using our detailed knowledge, we are selectively
identifying portfolio companies for deeper ownership and greater
involvement to secure the best results. We expect continuation of
the good performance to deliver the requisite increased shareholder
value and realise return."
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
For more information, please contact:
NetScientific Via Walbrook PR
Ilian Iliev, CEO
WH Ireland (NOMAD, Financial Adviser
and Broker)
Chris Fielding / Darshan Patel +44 (0)20 7220 1666
Walbrook PR +44 (0)20 7933 8780 or netscientific@walbrookpr.com
Nick Rome / Nicholas Johnson / Paul 07748 325 236 / 07884 664 686 / 07980
McManus 541 893
About NetScientific
NetScientific plc (AIM: NSCI) is an active holding company, that
invests in, develops, commercialises and realises shareholder value
in life sciences/healthcare, sustainability and technology
companies, which offer significant growth potential predominately
in the UK and USA, as well as globally.
NetScientific delivers shareholder returns through a proactive
and hands-on management approach to their portfolio companies;
identifying, investing in, and helping to build game-changing
companies. The Group targets value inflection points and the
release of value through partial or full exits from trade sales,
public listings, or equity sales. The Company has a strong
transatlantic and growing international presence, providing
attractive expansion prospects.
NSCI uses a capital-light investment structure, utilising the
power of the PLC Brand, and the Group's balance sheet to anchor
future investments and achieve a multiplier effect by attracting
3rd party investment for the portfolio companies.
NetScientific is headquartered in London, United Kingdom, and
was admitted to trading on AIM, a market operated by the London
Stock Exchange, in 2013 (website: netscientific.net ).
JOINT CHAIRMAN'S AND CHIEF EXECUTIVE OFFICER'S REVIEW FOR THE
SIX MONTHSED 30 JUNE 2021
NetScientific Plc is an active holding company, that invests in,
develops, commercialises and realises shareholder value in life
sciences/healthcare, sustainability and technology companies, which
offer significant growth and investment return potential. It
leverages trans-Atlantic relationships and global opportunities to
deliver shareholder value.
2021 continues the excellent progress made since the start of
the turnaround in mid-2020, now reflected in the good half year
results. The turnaround is largely complete. We are now focused on
the next stage of our growth. With the benefit of additional funds,
we are exploiting the potential from existing and new
opportunities. Based on our detailed knowledge of the portfolio and
individual businesses, we are now selectively identifying portfolio
companies to build deeper ownership, influence and involvement, and
drive investment returns and realisations.
The strong half-year's performance is highlighted in the KPIs,
and in the investments and development of portfolio companies. The
Group is now secure and well positioned for future success. We have
established a robust growth trajectory, exemplified by:
o 4 further investments in portfolio companies (PDS, SageTech,
Sofant, Pointgrab) to enhance and protect investment positions
totalling GBP722k at cost, fair value GBP1,012k, an increase in
fair value of GBP290k already during period.
o Fair value of direct holdings up c. 50% from GBP21.2m to
GBP31.9m, mainly driven by PDS Biotechnology with further growth
expected.
o Capital under advisory up c. 25% from GBP14.6m to GBP18.2m on
3 portfolio fundraises during the period.
o Loss after tax of GBP1,448k (H1 2020: loss GBP1,277k) in line
with expectations , and reflecting investments, proactive
management, building infrastructure to increase capacity and drive
revenue.
o NetScientific and several of its portfolio companies are
seeing new sustainable opportunities.
o Post-balance sheet GBP1m investment in Martlet Capital,
increasing CAU and extending footprint in Cambridge high-tech
cluster
Shareholders have enjoyed a multiplier increase in the share
price, going from a low point in the first half of 2020 of 12.5p to
118.5p by the end of H1 2021. However, the Board believes that the
current market capitalisation is still below the underlying asset
value and does not take into account expected growth. This has also
been the consistent view in several external analysts' reports. The
company will continue to work to address this gap and demonstrate
the further added value prospects for shareholders.
The Board would like to thank current and new shareholders for
their overwhelming vote of confidence in the new team and strategy
with the transformational GBP7.7m placement in June 2021.
Over the last six months the Company has continued its action
programme to deliver on its strategy and drive shareholder value,
with:
-- pro-active, commercial management of the portfolio and individual companies;
-- judicious investment to protect/enhance NetScientific's
position in existing portfolio companies;
-- clear and detailed evaluation of the Group's portfolio,
including business plans, timelines, milestones, associated funding
needs, value inflection points, the balance of risk and reward, and
the priorities and potential for each portfolio company; and
-- alignment of EMV Capital's operations to act synergistically
with NetScientific's investment and portfolio objectives
-- applying the company's "capital light" approach; utilising
the power of the PLC Brand, and the NetScientific balance sheet to
anchor future investments and achieve a multiplier effect with 3rd
party investment adding to Capital Under Advisory
-- Selective investments in our portfolio companies and target
areas, taking deeper stakes, having greater involvement and
focusing on realising enhanced returns.
-- Extending the platform and deal flow, as exemplified by the
investment in Martlet Capital and Marquity, opening additional
routes to identify and invest in highly promising companies from
the world-leading Cambridge high-tech cluster, alongside
experienced and credible investment partners.
Following the above approach, the Group has invested GBP722k and
raised over GBP3.6m in total for portfolio companies over the last
six months as we continue to grow and add value across the enhanced
portfolio.
Trans-Atlantic Bridges and internationalisation:
The operational reality of our combined US and UK investment
portfolio has led to the identification of many synergies and
opportunities for cross-over on both sides of the Atlantic and
exploit the Group's international potential. This has enabled
several portfolio companies to access investments and capital,
product markets, corporate and research relationships on either
side of the 'pond' and beyond. We plan to consolidate on the
positive progress with specific 'on the ground' initiatives to help
our existing portfolio companies and future additions to accelerate
internationalisation and higher growth.
NetScientific can now be summarised as:
-- an active holding company with a balanced, enhanced and expanding portfolio of companies;
-- a life sciences/healthcare, sustainability and technology
investment and commercialisation group;
-- pro-active managers, generating returns through growth in the
value of its direct balance sheet holdings, and a profit
share/carry fee on capital under advisory;
-- providing venture capital investment and corporate finance
services, earning revenue and adding value through management,
incubation, advisory services and fund-raising support;
-- an international business, with strengthening trans-Atlantic
"bridges" and activities in the UK and North America, with global
potential; and
-- focused on high growth opportunities, increasing value, and
delivering shareholder value and realisations through judicious
partial or full exits and liquidity events.
--
The Group continues to be well positioned in the Environment,
Social and Corporate Governance ("ESG") and Impact investment
space, having traditionally been an investor in the core areas of
healthcare around major chronic diseases for both therapeutics and
diagnostics.
The Group is focused on sustainable value creation and from a
strong base. We continue to build key processes and infrastructure
to enable increased transactional, portfolio management and
investment realisation capacity. We expect to finish 2021 with
strong momentum and further progress towards the key value
inflection points.
COVID-19
The Group continues to follow the latest government advice. The
primary focus is the health, wellbeing and safety of all its
employees and local communities. Whilst there was a general initial
negative impact on the Group, the consequences have varied across
the portfolio, and the sources of revenue and individual companies
have been managed accordingly.
Looking forward, the pandemic has opened up new opportunities,
and overall we believe that the healthcare and technology sectors
are in a strong position, so it was not seen as necessary to impair
the carrying value of any assets.
Portfolio Summary
Following the capital-light investment model, the portfolio
consists of a combination of direct investments and capital under
advisory. This enhanced portfolio is well balanced, facilitates
risk management and provides synergistic benefits, through
consolidated pro-active management across the Group, as summarised
below. The combination of direct and capital under advisory
investments give the Group a greater influence in the portfolio
companies, access to follow-on funding, and enable greater
financial and value-added support for the portfolio companies. The
amounts under Capital Under Advisory are associated with carried
interest or profit share agreements, typically between 10% and 20%.
While it is difficult to value or estimate the current value of
these stakes, for demonstration purposes an average 2x portfolio
return on the Capital Under Advisory of GBP18.2m could result in
carry returns to EMV Capital of up to GBP3.64m.
Portfolio Sector and description Fully Consolidated Fair Value of stake Capital Under Advisory (At
companies (further detail set out diluted Statement of Cost to Third Party)
below) Group Financial
Interest % Position
value
------------- ------------------------- ------------ -------------
31-Dec 30-Jun 31-Dec 30-Jun
20 21 20 21
------------- ------------------------- ------------ ------------- --------- --------- ---------- ------------------
Subsidiaries
------------------------- ------------ ------------- --------- --------- ---------- ------------------
EMV Capital Venture Capital
Ltd Investment Company 100.0% GBP2.2m GBP3.5m GBP3.5m - -
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Respiratory and other
ProAxsis Ltd diagnostics. Sales 100.00% GBP0.3m GBP3.5m GBP3.5m - -
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Glycotest, Liver cancer diagnostics
Inc. - Late stage clinical 64.0% GBP0.2m GBP11.0m GBP11.0m - -
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Sub Total GBP2.7m GBP18.0m GBP18.0m - -
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Owned
Portfolio
------------------------- ------------ ------------- --------- --------- ---------- ------------------
PDS Immuuno-oncology (NASDAQ
Biotechnolgy quoted), Phase 2
Corporation clinical 4.7% GBP12.2m GBP2.0m GBP12.2m - -
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Medical biomarker
CytoVale, diagnostics - late stage
Inc linical 1.0% GBP0.4m GBP0.4m GBP0.4m - -
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Epibone, Regenerative medicine -
Inc. Late stage clinical 0.80% GBP0.3m GBP0.3m GBP0.3m - -
------------------------- ------------ ------------- --------- --------- ---------- ------------------
G - Tech Waerable medical
Medical, diagnostics - Early
Inc. stage clinical 3.80% GBP0.3m GBP0.4m GBP0.4m - -
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Longevity $250k
Biotech, Therapeutics - Early convertible
Inc. stage clinical loan note - - - - -
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Medical diagnostics of
QuantalX the brain - Late stage
Neuroscience clinical 0.4% - GBP0.1m GBP0.1m - -
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Sub Total GBP13.2m GBP3.2m GBP13.4m - -
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Advised
Portfolio
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Semiconductors-Satellite
Sofant and 5G wireless
Technologies communications. GBP0.1m
Ltd Development 25.7% GBP0.1m - CLA GBP2.3m GBP2.8m
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Robotics and automation
Q-Bot in the construction
Limited industry. Sales 12.3% - - - GBP2.3m GBP2.3m
------------------------- ------------ ------------- --------- --------- ---------- ------------------
SageTech Hospital equipment -
Medical capture & purification
Equipment of anaesthetic gases.
Limited Pilots 23.8% GBP0.3m - GBP0.3m GBP1.1m GBP2.7m
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Machine vision for smart
PointGrab, building automation.
Inc. Sales 21.3% GBP0.1m - GBP0.1m GBP3.6m GBP4.1m
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Vortex
Biosciences, Liquid biopsy and
Inc. oncology. Sales 96.0% - - - GBP2.4m GBP3.0m
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Digital health - Remote
Wanda Patient Monitoring.
Health, Inc. Sales 74.7% - - - GBP1.3m GBP1.7m
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Nanotech
Industrial
Solutions, Material science and
Inc. chemistry. Sales - - - - GBP0.7m GBP0.7m
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Insight
Photonic Semiconductors-Akinetic
Solutions, Swept Source Laser. $1.25m
Inc. Sales Warrants - - - GBP0.9m GBP0.9m
------------------------- ------------ ------------- --------- --------- ---------- ------------------
Sub Total GBP0.5m - GBP0.5m GBP14.6m GBP18.2m
------------------------- ------------ ------------- --------- --------- ---------- ------------------
TOTAL GBP16.4m GBP21.2m GBP31.9m GBP14.6m GBP18.2m
------------------------- ------------ ------------- --------- --------- ---------- ------------------
On the Consolidated Statement of Financial Position, the owned
portfolio is shown as Equity investments classified as FVTOCI and
Financial assets classified as FVTPL.
Finance
For the period, the Group made a loss of GBP1,448k (H1 2020:
GBP1,277k) all from continuing operations. Given the investments,
active management, development, growth and infrastructure platform,
this is in line with expectations.
Income Statement:
Revenue for the first half of 2021 of GBP407k (H1 2020: GBP136k)
was ahead of prior year by 199% for the same period, mainly due to
the first-time contribution of EMV Capital of GBP355k compared to
prior year. ProAxsis continues to be impacted by the COVID pandemic
and the delay in the restarting of respiratory clinical trials at
major institutions worldwide. However, operations and developments
have continued well, with the benefit of substantial grant funding
and more recently the global licence agreement with
AstraZeneca.
Other operating income fell to GBP44k (H1 2020: GBP568k),
primarily as a result of the prior year GBP485k change (2021: Nil)
in fair value of financial assets classified as "fair value through
profit and loss" (FVTPL) on conversion of convertible loan notes in
Epibone Inc., and G-Tech Medical Inc., writeback of estimated
credit losses on trade receivables of debit GBPNil (H1 2020:
GBP56k) and ProAxsis R&D tax above the line and other income of
GBP53k (H1 2020: GBP26k).
Research and development costs of GBP651k (H1 2020: GBP736k)
were lower in the first half as ProAxsis capitalised further
development costs of GBP290k during H1 2021 on four projects
reflecting the preparation of the new products for market, and
Glycotest expenditures on HCC test development.
Selling and administrative costs of GBP1,205k (H1 2020:
GBP1,044k) were higher, mainly due to the inclusion of EMV Capital
business costs for the first time.
Other costs of GBP51k (H1 2020: GBP207k) Share option costs of
GBP42k (H1 2020: GBP9k), accrued estimated credit losses of GBP9k
which was in other operating income H1 2020 and merger and
acquisition costs of GBPNil (H1 2020: GBP198k).
Balance Sheet:
Cash at the period end amounted to GBP7,440k (2020: GBP1,628k)
following the successful fundraise of GBP7,309k net of costs during
June 2021. Cash used in operations during the period was GBP1,134k
(H1 2020: GBP1,179k). Cash held within the subsidiary Glycotest, of
GBP0.4m (2020: GBP0.6m) is not freely available for use within the
wider group as it would need the consent of a minority
shareholder.
Equity investments held for sale and derivative financial
instruments were fair valued and stood at GBP13,656k on 30 June
2021 (2020: GBP3,048k). An increase in value of GBP10,608k, which
relates predominately to PDS Biotechnology, quoted on Nasdaq
Capital Markets under the ticker "PDSB", a trade investment
measured at fair value, see notes 10 and 11 for further
information.
All equity investments not quoted on an active market have had
fair value established using inputs other than quoted prices that
are observable, i.e. the price from the last third party round as
publicly disclosed.
Several direct investments were made by NetScientific in the
portfolio companies as part of the capital light investment model,
and to enable the syndication of further funds by EMVC: at
-- Sofant: Alongside the British Business Bank and EMV Capital
investors, NetScientific made an investment in convertible loan
note of GBP0.1m at an interest rate of 6% p.a., held within
derivative financial assets classified as FVTPL. Interest was
accrued during the period of GBP2k (2020: GBPNil).
-- SageTech: Alongside a fund-raise of GBP2.9m, Netscientific
purchased 5,215 ordinary shares or 2.25% in SageTech Medical
Equipment Ltd on the secondary market at a 35% discount. The fair
value at 30 June 2021 is GBP308k based on a GBP59 price per share,
a gain of GBP107k during the period.
-- PointGrab: As part of a GBP3.4m investment round, and
alongside EMVC investors, Netscientific also purchased 198,500
ordinary shares or 0.43% in PointGrab Ltd during the last funding
round at $0.40 per share. The fair value at 30 June 2021 based
using the price of the last investment round is GBP57k.
The Group ended the period with net assets of GBP23,076 (2020:
6,896). An increase of GBP16,180k. The movement is shown in the
consolidated statement of changes in equity and is mainly the loss
in the period of GBP1,448k, offset by the positive movement in
equity investments held for sale and derivative financial
instruments of GBP10,608k and the successful fundraise during June
2021 of GBP7,309k net of costs.
As a result of a non-controlling interest acquiring additional
interests in Glycotest, Inc., the Group's ownership of Glycotest,
Inc. decreased from 65.65% to 64.02% a movement of 1.63%. The
carrying value of Glycotest, Inc. net assets in the Group's
consolidated financial statements on the date of the acquisitions
was GBP141k. Proceeds received from non-controlling interests
amounted to $500k or GBP345k.
Board
There were no Board changes during the period (H1 2020: 2), and
the board continues to work effectively providing the requisite
corporate governance, challenge and strategic drive for the
company.
The Board is currently setting up an Advisory Group to give
access to broader experience and expertise.
Summary and Outlook
The Board believes that the extended portfolio holds great
potential; with the right asset-base, in the right space and at the
right time, Management is committed to delivering the agreed
strategy, which the Board is confident will unlock and realise the
requisite returns.
The Company's strategy remains to maximise shareholder value
from the group by:
-- Realigning the market capitalisation, with both the
underlying asset value and clear potential.
-- Proactive management, with commercial discipline and
appropriate risk management, focused on delivering results,
increased revenue and added value, in the portfolio companies.
-- Continuing to establish the necessary resources and
infrastructure to drive the strategic and business plans.
-- Building the NetScientific platform for robust evaluation,
quantified decisions and managed expansion to capitalise on the
multiple prospects and potential for large returns.
-- Exploiting the transatlantic and global opportunities and harnessing the Group synergies.
-- Progressively developing and implementing performance driven
plans, with clearly defined milestones and KPIs to scale the
business, maximise the profitable growth of the portfolio.
-- Judicious direct and syndicated investments, to produce enhanced returns.
-- Structured evaluation and projections of value inflection
points, plus exit opportunities and liquidity events to deliver
shareholder returns.
John Clarkson Ilian Iliev
Non-Executive Director and Chairman Chief Executive Officer
29 September 2021 29 September 2021
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHSED 30 JUNE 2021
Unaudited Unaudited
Six months Six months
ended 30 ended 30
June June
Notes 2021 2020
GBP000s GBP000s
Revenue 4 407 136
Cost of sales (35) (4)
--------------------------------------------- -------- ------------ ------------
Gross profit 372 132
Other operating income 53 568
Research and development costs (651) (736)
Selling, general and administrative
costs (1,205) (1,044)
Other costs (51) (207)
Loss from operations (1,482) (1,287)
Finance income 2 1
Finance expense (8) (21)
Loss before taxation (1,488) (1,307)
Income Tax 40 30
--------------------------------------------- -------- ------------ ------------
Total loss for the period from continuing
operations (1,448) (1,277)
--------------------------------------------- -------- ------------ ------------
Loss attributable to:
Owners of the parent 5 (1,195) (864)
Non-controlling interests (253) (413)
--------------------------------------------- -------- ------------ ------------
(1,448) (1,277)
--------------------------------------------- -------- ------------ ------------
Basic and diluted loss per share
attributable to owners of the parent
during the period: 5
Total loss for the period from continuing
operations (7.9p) (1.1p)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2021
Unaudited Unaudited
Six months Six months
ended 30 ended 30
June June
Notes 2021 2020
GBP000s GBP000s
Loss for the period (1,448) (1,277)
Items that may be subsequently reclassified
to profit or loss in subsequent
periods:
Exchange differences on translation
of foreign operations (10) 143
Change in fair value of investments
classified as fair value through
other comprehensive income 9,892 130
Total comprehensive profit/(loss)
for the period 8,434 (1,004)
-------------------------------------------------------- ------------ ------------
Attributable to:
Owners of the parent 8,689 (633)
Non-controlling interests (255) (371)
---------------------------- -------- ----------
8,434 (1,004)
--------------------------- -------- ----------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
Unaudited Audited
30 June 31 December
2021 2020
Notes GBP000s GBP000s
---------------------------------------- -------- ---------- -------------
Assets
Non-current assets
Property, plant and equipment 7 145 128
Right-of-use assets 8 173 189
Intangible assets 9 2,816 2,623
Equity investments classified as
FVTOCI* 10 13,477 2,970
Derivative financial assets classified
as FVTPL** 11 179 78
Total non-current assets 16,790 5,988
---------------------------------------- -------- ---------- -------------
Current assets
Inventories 12 89 74
Trade and other receivables 13 614 376
Cash and cash equivalents 14 7,440 1,628
---------------------------------------- -------- ---------- -------------
Total current assets 8,143 2,078
---------------------------------------- -------- ---------- -------------
Total assets 24,933 8,066
---------------------------------------- -------- ---------- -------------
Liabilities
Current liabilities
Trade and other payables 15 (1,172) (661)
Lease liabilities 16 (32) (31)
Loans and borrowings 17 (49) (28)
---------------------------------------- -------- ---------- -------------
Total current liabilities (1,253) (720)
---------------------------------------- -------- ---------- -------------
Non-current liabilities
Lease liabilities 16 (148) (163)
Loans and borrowings 17 (456) (287)
Total non-current liabilities (604) (450)
---------------------------------------- -------- ---------- -------------
Total liabilities (1,857) (1,170)
---------------------------------------- -------- ---------- -------------
Net assets 23,076 6,896
---------------------------------------- -------- ---------- -------------
Issued capital and reserves
Attributable to the parent
Called up share capital 18 1,049 746
Share premium account 72,650 65,594
Capital reserve account 237 237
Equity investment reserve 8,387 (1,505)
Foreign exchange and capital reserve 1,362 1,368
Retained earnings (60,640) (59,702)
---------------------------------------- -------- ---------- -------------
Equity attributable to the owners
of the parent 23,045 6,738
Non-controlling interests 6 31 158
---------------------------------------- -------- ---------- -------------
Total equity 23,076 6,896
---------------------------------------- -------- ---------- -------------
* Fair value through other comprehensive income
** Fair value through profit and loss
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2021
Shareholders' equity
Foreign
exchange
Equity and
Share Share Capital investment Retained capital Non-controlling Total
capital premium reserve reserve earnings reserve Total interests equity
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
------------------- -------- -------- -------- ----------- --------- --------- --------- ---------------- --------
1 January 2020 3,928 58,006 237 (1,408) (56,681) 1,384 5,466 (361) 5,105
------------------- -------- -------- -------- ----------- --------- --------- --------- ---------------- --------
Loss for the
period - - - - (864) - (864) (413) (1,277)
------------------- -------- -------- -------- ----------- --------- --------- --------- ---------------- --------
Other
comprehensive
income -
Foreign exchange
differences - - - - - 101 101 42 143
Change in fair
value during
the period - - - 130 - - 130 - 130
Total
comprehensive
income - - - 130 (864) 101 (633) (371) (1,004)
------------------- -------- -------- -------- ----------- --------- --------- --------- ---------------- --------
Share-based
payments - - - - 9 - 9 - 9
------------------- -------- -------- -------- ----------- --------- --------- --------- ---------------- --------
30 June 2020 3,928 58,006 237 (1,278) (57,536) 1,485 4,842 (732) 4,110
------------------- -------- -------- -------- ----------- --------- --------- --------- ---------------- --------
Loss for the
period - - - - (747) - (747) (314) (1,061)
------------------- -------- -------- -------- ----------- --------- --------- --------- ---------------- --------
Other
comprehensive
income -
Foreign exchange
differences - - - - - (117) (117) (29) (146)
Change in fair
value during
the period - - - (227) - - (227) - (227)
------------------- -------- -------- -------- ----------- --------- --------- --------- ---------------- --------
Total
comprehensive
income - - - (227) (747) (117) (1,091) (343) (1,434)
------------------- -------- -------- -------- ----------- --------- --------- --------- ---------------- --------
Share
re-organisation (3,535) 3,535 - - - - - - -
Issue of share
capital 353 4,236 - - - - 4,589 - 4,589
Cost of share
issue - (183) - - - - (183) - (183)
Increase/decrease
in subsidiary
shareholding - - - - (1,463) - (1,463) 1,233 (230)
Share-based
payments - - - - 44 - 44 - 44
------------------- -------- -------- -------- ----------- --------- --------- --------- ---------------- --------
31 December
2020 746 65,594 237 (1,505) (59,702) 1,368 6,738 158 6,896
------------------- -------- -------- -------- ----------- --------- --------- --------- ---------------- --------
Loss for the
period - - - - (1,195) - (1,195) (253) (1,448)
------------------- -------- -------- -------- ----------- --------- --------- --------- ---------------- --------
Other
comprehensive
income -
Foreign exchange
differences - - - - - (8) (8) (2) (10)
Change in fair
value during
the period - - - 9,892 - - 9,892 - 9,892
------------------- -------- -------- -------- ----------- --------- --------- --------- ---------------- --------
Total
comprehensive
income - - - 9,892 (1,195) (8) 8,689 (255) 8,434
------------------- -------- -------- -------- ----------- --------- --------- --------- ---------------- --------
Issue of share
capital 303 7,492 - - - - 7,795 - 7,795
Cost of share
issue - (436) - - - - (436) - (436)
Decrease in
subsidiary
shareholding 215 2 217 128 345
Share-based
payments - - - - 42 - 42 - 42
------------------- -------- -------- -------- ----------- --------- --------- --------- ---------------- --------
30 June 2021 1,049 72,650 237 8,387 (60,640) 1,362 23,045 31 23,076
------------------- -------- -------- -------- ----------- --------- --------- --------- ---------------- --------
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2021
Notes Unaudited Unaudited
Six months Six months
ended 30 ended 30
June June
2021 2020
GBP000s GBP000s
------------------------------------------- ------ ------------ ------------
Cash flows from operating activities
Loss after income tax (1,448) (1,277)
Adjustments for:
Depreciation of property, plant
and equipment 25 21
Depreciation of right to use assets 16 16
Amortisation of intangibles 61 -
Estimated credit losses on trade
receivables (9) (56)
Change in fair value of financial
assets classified as FVTPL - (485)
Fair value movement during the period - -
on convertible debt
Release of loan provision - -
Capitalisation of development costs (255) -
Share-based payments 42 9
Foreign exchange gain/(loss) 5 (6)
Finance income (2) (1)
Finance costs 8 13
Income Tax (86) (30)
(1,643) (1,796)
Changes in working capital
(Increase)/decrease in inventories (15) (21)
(Increase)/decrease in trade and
other receivables (117) 427
Increase / (decrease) in trade and
other payables 563 (211)
Cash used in operations (1,212) (1,179)
------------------------------------------- ------ ------------ ------------
Income tax received 78 -
------------------------------------------- ------ ------------ ------------
Net cash used in operating activities (1,134) (1,179)
------------------------------------------- ------ ------------ ------------
Cash flows from investing activities
Acquisition of subsidiary, net cash - -
acquired
Purchase of property, plant and
equipment (41) (21)
Purchase of equity investments classified
as FVTOCI (622) (503)
Purchase of derivative financial (100) -
assets classified as FVTPL
Purchase of intangibles - -
Interest received - 1
Net cash (used in) investing activities (763) (523)
------------------------------------------- ------ ------------ ------------
Cash flows from financing activities
Proceeds paid on change in stake - -
in subsidiary
Proceeds received on change in stake 345 -
in subsidiary
Lease payments (19) (10)
Repayment of borrowings (360) -
Interest paid (3) -
Proceeds of loan 550 50
Proceeds from share issue 7,641 -
Share issue cost (436) -
Net cash from financing activities 7,718 40
------------------------------------------- ------ ------------ ------------
Increase / (decrease) in cash and
cash equivalents 5,821 (1,662)
Cash and cash equivalents at beginning
of the period 1,628 3,453
Exchange differences on cash and
cash equivalents (9) 142
------------------------------------------- ------ ------------ ------------
Cash and cash equivalents at end
of the period 14 7,440 1,933
------------------------------------------- ------ ------------ ------------
1. ACCOUNTING POLICIES
Basis of preparation
The interim financial information, which is unaudited, have been
prepared on the basis of the accounting policies expected to apply
for the financial year to 31 December 2021 and in accordance with
International accounting standards in conformity with the
requirements of the Companies Act 2006. Policies have been
consistently applied to all periods presented apart from where new
standards have been adopted during the period, see below for
changes in accounting policies.
The financial information for the period ended 30 June 2021 does
not constitute the full statutory accounts for that period. The
Annual Report and Financial Statements for the year ended 31
December 2020 have been filed with the Registrar of Companies. The
Independent Auditor's Report on the Report and Financial Statements
for the year ended 31 December 2020 was unqualified and did not
contain a statement under sections 498(2) or 498(3) of the
Companies Act 2006.
The 2020 Annual Report audit report did draw attention to the
material uncertainty relating to going concern as follows:
We draw attention to note 2 to the financial statements, which
indicates the Directors considerations over going concern. In the
event that the group is unable to meet its forecasts, it will need
to raise further finance. As stated in note 2, these events or
conditions, along with other matters set out in the note, indicate
that a material uncertainty exists that may cast significant doubt
on the group and the company's ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the
Directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
We considered the ability of the Group and the Parent Company to
continue as a going concern to be a key audit matter based on our
assessment of the significance of the risk and the effect on our
audit strategy.
Our evaluation of the Directors' assessment of the Group and the
Parent Company's ability to continue to adopt the going concern
basis of accounting and in relation to the key audit matter
included:
-- Reviewing the latest cash flow forecasts prepared by
management to assess whether the group has adequate financial
resources to continue as a going concern for at least 12 months
from the date of this report. Our work included agreeing February
2021 cash balances to third party evidence, testing that the
assumptions adopted in the cashflows were in line with our
knowledge of the business, and incorporated management's cash
saving initiatives as well as the progress of their funding options
and future plans. We also considered the accuracy of management's
forecasting by comparing previous results to related forecasts and
current forecasts to latest management accounts.
-- Reviewing the reverse stress testing performed by the
management on the cash flow forecasts by assessing the likelihood
of occurrence based on our understanding of the group, strategy,
future plans and trading results to date.
-- Performing sensitivity testing on the cashflow projections
prepared by management, by adopting different assumptions from
managements.
-- Considering the going concern status throughout the normal
course of the audit through testing of recoverability of
investments, impairment of assets, and existence of cash
balances.
-- Obtaining and reviewing the latest board minutes available
for any potential events that might indicate a going concern
issue.
-- Reviewing publicly available information for any negative
publicity or potential issues that may identify a post balance
sheet event.
-- Reviewing the adequacy of going concern disclosures in the annual report.
Business Combinations
The Group recognises identifiable assets acquired and
liabilities assumed in a business combination, regardless of
whether they have been previously recognised in the acquiree's
financial statements prior to the acquisition. Assets acquired and
liabilities assumed are generally measured at their
acquisition-date fair values. Goodwill is stated after separate
recognition of identifiable intangible assets. It is calculated as
the excess of the sum of: a) fair value of consideration
transferred; b) the recognised amount of any non-controlling
interest in the acquiree; and c) acquisition-date fair value of any
existing equity interest in the acquiree, over the acquisition-date
fair values of identifiable net assets. If the fair values of
identifiable net assets exceed the sum calculated above, the excess
amount (i.e. gain on a bargain purchase) is recognised in profit or
loss immediately.
Going Concern
The Group is subject to a number of risks that are
characteristic of IP commercialisation and early-stage life
sciences and technology companies due to the nature of the
industry. These risks include, amongst others, uncertainties
inherent to R&D, trials, and regulatory approvals of pipeline
assets.
The group made a loss in the financial period of GBP1,448k (H1
2020: GBP1,277k).
During June 2021 the Group raise net GBP7,309k to strengthen the
balance sheet and drive growth. At 30 June 2021, the Group had
total equity of GBP23,076k (2020: GBP6,896k). An increase of
GBP16,180k. The movement is shown in the consolidated statement of
changes in equity and is mainly the loss in the period of
GBP1,448k, offset by the positive movement in equity investments
held for sale and derivative financial instruments of GBP10,608k
and the successful fundraise during June 2021 of GBP7,309k net of
costs. The Group had cash and cash equivalents of GBP7,440k (2020:
GBP1,628k). Cash held within the subsidiary Glycotest, of GBP441k
(2020: GBP594k) is not freely available for use within the wider
group as it would need the consent of a minority shareholder.
The Directors have prepared and reviewed budget cashflows which
were approved by the Board of Directors in the Board meeting of 20
January 2021. The Group has reviewed the major budgeted assumptions
and sensitivities in light of Covid-19 and drawn up cash
preservation plans in case revenue does not continue as planned, or
it faces delays in planned payments from third parties. It has
initiated further cost saving plans across the Group and delayed
expenditure where possible, until there is more clarity on the
financial impact of the pandemic.
As a result, The Directors no longer believe going concern is an
issue and not for the next 12 months from the date of this
report.
The financial statements do not include any adjustments that
would be necessary if the group or company was unable to continue
as a going concern.
Change in accounting policies
The Group has applied the same accounting policies and methods
of computation in its interim consolidated financial statements as
in its 2020 annual financial statements, except for amendments to
IFRS 16: COVID-19 Related Rent Concessions beyond 30 June 2021,
which were adopted on 1 January 2021.
Details of the impact this amendment has had are given below.
Other new and amended standards and Interpretations issued by the
IASB that will apply for the first time in the next annual
financial statements are not expected to impact the Group as they
are either not relevant to the Group's activities or require
accounting which is consistent with the Group's current accounting
policies.
Amendments to IFRS 16: COVID-19-Related Rent Concessions beyond
30 June 2021
In March 2021, the IASB amended IFRS 16 Leases, extending the
practical expedient in order to permit lessees to apply it to rent
concessions for which reductions in lease payments affect payments
originally due on or before 30 June 2022. This amendment is
applicable for annual reporting periods beginning on or after 1
April 2021, with early application permitted, including in
financial statements not authorised for issue at 31 March 2021.
The Group has early adopted this amendment for its annual
reporting period beginning on 1 January 2021. During the year ended
31 December 2020, the Company had elected to apply the practical
expedient provided by the amendment to IFRS 16 issued in June 2020.
In accordance with this practical expedient, the rent concessions
received affecting payments originally due on or before 30 June
2021 were not accounted as lease modifications. However, the
Company had also negotiated several rent concessions with lessors
that affected payments originally due after 30 June 2021 but before
30 June 2022. In the financial statements for the year ended 31
December 2020, these ineligible rent concessions were accounted for
as lease modifications, as they were not eligible for the
application of the practical expedient.
The ineligible rent concessions now qualify for application of
the practical expedient due to the amendment issued in March
2021.
The transitional requirements of the extension to the practical
expedient require retrospective application, with the cumulative
effect of initially applying the amendment recognised as an
adjustment to the opening balance of retained earnings (or other
component of equity, as appropriate) at the beginning of the annual
reporting period in which the entity first applies the amendment.
Accordingly, A Layout has reversed the lease modification
accounting applied to the previously ineligible rent concessions
reflected in the financial statements for the year ended 31
December 2020, with the effect being recognised as an adjustment to
the opening balance of retained earnings as at 1 January 2021.
During the six months ended 30 June 2021, A Layout has entered
into additional rent concessions that satisfy the criteria for the
application of the extended practical expedient. A Layout has
applied the practical expedient to these rent concessions.
Accounting for the rent concessions as lease modifications would
have resulted in A Layout remeasuring the lease liability to
reflect the revised consideration using a revised discount rate,
with the effect of the change in the lease liability recorded
against the right-of-use asset. By applying the practical
expedient, A Layout is not required to determine a revised discount
rate and the effect of the change in the lease liability is
reflected in profit or loss in the period in which the event or
condition that triggers the rent concession occurs.
The effect of applying the practical expedient is disclosed in
note 16.
Use of estimates and judgements
There have been no material revisions to the nature and amount
of estimates of amounts reported in prior periods, except those
necessitated by the changing circumstances of the COVID-19
pandemic. The worsening effect of the COVID-19 pandemic in some
locations at the beginning of the year 2021 has required certain
reassessments of the significant judgements and estimates;
including:
(a) Impairment of goodwill;
(b) The valuation of intangibles;
(c) The valuation of equity investments; and
(d) The capitalisation of development costs
Impact of accounting standards to be applied in future
periods
There are a number of standards and interpretations which have
been issued by the International Accounting Standards Board that
are effective for periods beginning subsequent to 31 December 2021,
that the Group has decided not to adopt early. The Group does not
believe these standards and interpretations will have a material
impact on the financial statements once adopted.
2. SIGNIFICANT EVENTS AND TRANSACTIONS
During the year ended 31 December 2020, the Group experienced
significant disruption to its operations due to the COVID-19
pandemic. Lockdowns and movement restrictions were imposed for a
significant part of the year 2020 in all jurisdictions where the
Group operates. By end of December 2020, the restrictions were
lifted in many jurisdictions and the Group was able to open in
those jurisdictions.
The significant events and transactions that have occurred since
31 December 2020 relate to the effects of the global pandemic on
the Groups interim consolidated financial statements for the six
months ended 30 June 2021 and are summarised as follows.
(a) Decrease in sales and cash flows in the United Kingdom.
The recoverable amount exceeded the carrying amounts for all of
the Group's cash generating units and would require a material and
long running deterioration in prospects for there to be an
impairment in the carrying amounts of goodwill and investment
values. The recoverable amount was determined based on values in
use, which utilises current budgets/reforecasts and cash flow
projections.
The carrying value of the Group assets have been assessed in
light of the COVID-19 pandemic and the long-term impacts that this
will have on the investments of the Group. Overall, we believe that
the Healthcare sector is in a strong position and it was not seen
as necessary to impair the carrying value of any assets further. We
are closely monitoring and managing the events, and will take
further actions if required, as the situation continues to evolve.
Cash planning and management is in place for all businesses, which
have been stress tested based on a number of scenarios. Importantly
as a result of the pandemic, NetScientific and several of its
portfolio companies are seeing new sustainable opportunities,
offering significant potential for future growth.
3. SEGMENTAL REPORTING
An operating segment is a component of the group that engages in
business activities from which it may earn revenues and incur
expenses, for which separate financial information is available and
whose operating results are evaluated by the Chief Operating
Decision Maker to assess performance and determine the allocation
of resources. The Chief Operating Decision Maker has been
identified as the Board of Directors.
The Board of Directors assess the performance of the operating
segment using financial information which is measured and presented
in a manner consistent with that in the financial statements.
Revenue from contracts with customers by segment
30 June 2021 Delivered Goods Service Fees Total
GBP000s GBP000s GBP000s
-------------- ---------------- ------------- ---------
EMV Capital - 325 325
ProAxsis 80 2 82
80 327 407
-------------- ---------------- ------------- ---------
30 June 2020 Delivered Goods Service Fees Total
GBP000s GBP000s GBP000s
-------------- ---------------- ------------- ---------
ProAxsis 114 22 136
114 22 136
-------------- ---------------- ------------- ---------
Total Loss for the period by segment
Unaudited Unaudited
Six months Six months
ended 30 June ended 30 June
2021 2020
GBP000s GBP000s
--------------- --------------- ---------------
EMV Capital 18 -
ProAxsis (88) (169)
Glycotest (606) (820)
NetScientific (772) (288)
(1,448) (1,277)
--------------- --------------- ---------------
4. REVENUE
Revenue from contracts with customers
30 June 2021 Delivered Goods Service Fee's Total
GBP000s GBP000s GBP000s
---------------- ---------------- -------------- ---------
United Kingdom 80 327 407
80 327 407
---------------- ---------------- -------------- ---------
30 June 2020 Delivered Goods Service Fee's Total
GBP000s GBP000s GBP000s
---------------- ---------------- -------------- ---------
United Kingdom 114 22 136
114 22 136
---------------- ---------------- -------------- ---------
5. LOSS PER SHARE
The basic and diluted loss per share is calculated by dividing
the loss for the financial period by the weighted average number of
ordinary shares in issue during the period. Potential ordinary
shares from outstanding options at 30 June 2021 of 620,729 (30 June
2020: 3,605,984; 31 December 2020: 656,729) are not treated as
dilutive as the group is loss making.
Unaudited Unaudited
Six months Six months
ended 30 ended 30
June June
2021 2020
GBP000s GBP000s
------------------------------------------- ------------ ------------
Loss attributable to equity holders
of the Company
Continuing operations (1,195) (864)
Discontinued operations - -
------------ ------------
Total Loss attributable to equity holders
of the Company (1,195) (864)
------------ ------------
Number of shares
Weighted average number of ordinary
shares in issue 15,067,947 78,561,866
On 29 June 2021 the Company issued 5,958,123 of 5p ordinary
shares at 130p per share, raising gross funds of GBP7,746k and net
funds of GBP7,309k.
On 25 January 2021 the Company issued 101,066 of 5p ordinary
shares at 49.47p per share to Chairman John Clarkson, who has taken
the payment in shares, rather than cash for fees owed to
Development Financial and Management Services Ltd.
On 24 August 2020, a share capital re--organisation took place.
This had the effect of consolidating each ten existing ordinary
shares into one new ordinary share. 4 additional shares were issued
so the share capital was exactly divisible by 10.
On 25 August 2020, the Company issued 3,521,480 of 5p ordinary
shares at 65p per share to acquire 100% of the share capital in EMV
Capital at a cost of GBP2,289k from Futura Messis Group Limited a
related party owned by Dr. Ilian Iliev. On the same date the
Company issued a further 3,538,455 of 5p ordinary shares via a
placement at 65p per share respectively, raising net funds of
GBP2,117k.
The total number of voting rights in the Company at 30 June 2021
is 20,975,311 5p ordinary shares (30 June 2020: 78,561,866, 31
December 2020: 14,916,122.
6. CHANGES IN NON-CONTROLLING INTEREST "NCI"
In March 2021, a non-controlling interest acquired additional
interests in Glycotest, Inc. Overall the Groups ownership of
Glycotest, Inc. decreased from 65.65% to 64.02% a movement of
1.63%. The carrying value of Glycotest, Inc. net assets in the
Group's consolidated financial statements on the date of the
acquisitions was GBP141k. Proceeds received from non-controlling
interests amounted to GBP345k.
In the period to 30 June 2021 this resulted in an increase in
equity attributable to owners of the Company of GBP217k and a
change in non-controlling interest of GBP128k.
7. PROPERTY, PLANT AND EQUIPMENT
Furniture,
Leasehold fittings Plant and
Improvement and equipment machinery Totals
GBP000s GBP000s GBP000s GBP000s
----------------------- ------------- --------------- ------ ----------- ---------
Cost
At 1 January 2020 100 22 139 261
Additions - 1 20 21
----------------------- ------------- --------------- --------------- ---------
At 30 June 2020 100 23 159 282
----------------------- ------------- --------------- --------------- ---------
Additions - 7 11 18
Acquired - 6 - 6
Disposals - (1) - (1)
----------------------- ------------- --------------- --------------- ---------
At 31 December 2020 100 35 170 305
----------------------- ------------- --------------- --------------- ---------
Additions - 5 36 41
At 30 June 2021 100 40 206 346
----------------------- ------------- --------------- --------------- ---------
Depreciation
At 1 January 2020 32 15 86 133
Charge for the period 5 1 15 21
----------------------- ------------- --------------- --------------- ---------
At 30 June 2020 37 16 101 154
----------------------- ------------- --------------- --------------- ---------
Acquired - 1 - 1
Charge for the period 5 2 16 23
Disposals - (1) - (1)
At 31 December 2020 42 18 117 177
----------------------- ------------- --------------- --------------- ---------
Charge for the period 6 2 17 25
At 30 June 2021 48 20 134 202
----------------------- ------------- --------------- --------------- ---------
Net book value
At 30 June 2021 52 20 72 144
----------------------- ------------- --------------- --------------- ---------
At 31 December 2020 58 17 53 128
----------------------- ------------- --------------- --------------- ---------
At 30 June 2020 63 7 58 128
----------------------- ------------- --------------- --------------- ---------
Leasehold improvements of GBP100k are funded by a loan to a UK
subsidiary.
8. RIGHT-OF-USE-ASSETS
Unaudited
Six months Audited
ended 30 Year ended
June 31 December
2021 2020
GBP000s GBP000s
------------------------------------ ------------ --------------
Cost
Opening balance at start of period 253 253
Closing balance at end of period 253 253
Amortisation
Opening balance at start of period (64) (32)
Add:
Charge for the period (16) (32)
Closing balance at end of period (80) (64)
------------------------------------ ------------ --------------
Net Book Value
As at end of period 173 189
------------------------------------ ------------ --------------
There is one long term lease, the Group has decided it will
apply the modified retrospective approach to IFRS 16. In addition,
it has decided to measure right-of-use assets by reference to the
measurement of the lease liability on that date.
The lease liabilities were measured at the present value of the
remaining lease payments, discounted using the Group's incremental
borrowing rate as at 1 January 2019. The Group's incremental
borrowing rate is the rate at which a similar borrowing could be
obtained from an independent creditor under comparable terms and
conditions. The rate applied was 3.5%.
Right-of-use assets are amortised on a straight-line basis over
the remaining term of the lease or over the remaining economic life
of the asset.
Short term leases still expensed as operating amount to GBP20k
(H1 2020: GBP8k) with a maturity of two months.
9 . INTANGIBLE ASSETS
Investment
Carry Interest Development Acquisition
Goodwill Arrangements costs Costs Patents Total
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
-------------------------- --------- --------------- ------------ ------------- -------- --------
Cost
-------------------------- --------- --------------- ------------ ------------- -------- --------
At 1 January & - -
July 2020 - - - -
Additions - - 337 - 50 387
Acquired through
business combinations 669 1,627 - 17 - 2,313
-------------------------- --------- --------------- ------------ ------------- -------- --------
At 31 December
2020 669 1,627 337 17 50 2,700
-------------------------- --------- --------------- ------------ ------------- -------- --------
Additions - - 255 - - 255
At 30 June 2021 669 1,627 592 17 50 2,955
-------------------------- --------- --------------- ------------ ------------- -------- --------
Accumulated amortisation
and impairment
-------------------------- --------- --------------- ------------ ------------- -------- --------
At 1 January & - -
July 2020 - - - -
Amortisation charge - 76 - - 1 77
-------------------------- --------- --------------- ------------ ------------- -------- --------
At 31 December
2020 - 76 - - 1 77
-------------------------- --------- --------------- ------------ ------------- -------- --------
Amortisation charge - 59 - - 3 77
-------------------------- --------- --------------- ------------ ------------- -------- --------
At 30 June 2021 - 135 - - 4 139
-------------------------- --------- --------------- ------------ ------------- -------- --------
Net book value
-------------------------- --------- --------------- ------------ ------------- -------- --------
At 30 June 2021 669 1,492 592 17 46 2,816
-------------------------- --------- --------------- ------------ ------------- -------- --------
At 30 June 2020
& 31 December 2020 669 1,551 337 17 49 2,623
-------------------------- --------- --------------- ------------ ------------- -------- --------
In the prior year, the Group acquired 100% of the voting equity
of EMV Capital Limited from Futura Messis Group Limited, a company
owned and managed by Dr Ilian Iliev. The acquisition has the
potential to unlock additional value creation opportunities for
NetScientific shareholders and reduce the risk of further value
erosion. The consideration settled in shares is subject to a number
of warranties over a three-year period following the date of
acquisition. The Group acquired through business combinations total
intangibles of GBP2,313k.
The main factors leading to the recognition of this intangible
are:
-- The presence of certain intangible assets, such as the
assembled workforce of the acquired entity, EIS fund practice,
infrastructure, thought leadership, brand, deal flow and investor
network and relationships, which do not qualify for separate
recognition;
-- Economies of scale which result in the Group being prepared to pay a premium; and
-- Carry interest arrangements and profit share that are a
material identifiable class of asset that has been recognised
separately.
ProAxsis acquired a key patent as part of the buyout of the
founders and Queens University for GBP50k which will be amortised
over the economic life of the patent.
A further GBP255k of ProAxsis development costs have been
capitalised during the period taking the total capitalised to
GBP592k in line with the accounting policy as certain projects now
meet all the criteria for development costs to be recognised as an
asset as it is probable that future economic value will flow to the
Group.
10. EQUITY INVESTMENTS CLASSIFIED AS FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (FVTOCI)
Represents equity securities Unaudited
Six months Audited
ended 30 Year ended
June 31 December
2021 2020
GBP000s GBP000s
--------------------------------------------------------- -------------- --------------
Opening balance at start of period 2,970 1,468
Additions 622 999
Conversion of derivative financial
assets - 645
Change in fair value during the period 9,885 (142)
Closing balance at end of period 13,477 2,970
-------
% of issued Currency
Name Country of incorporation share capital denomination GBP000s
------------------------------ ------------------------- -------------- -------------- -------
PDS Biotechnology Corporation USA 4.72% US$ 12,159
CytoVale, Inc. USA 1.00% US$ 362
Epibone, Inc. USA 0.84% US$ 283
G-Tech Medical, Inc. USA 3.04% US$ 308
SageTech Medical Equipment
Ltd UK 2.25% UKGBP 308
PointGrab Ltd Israel 0.43% US$ 57
13,477
-------------------------------------------------------- -------------- -------------- -------
Equity investments classified as fair value through other
comprehensive income are held for sale, fair valued and stand at
GBP13,477k (H1 2019: GBP2,784k). An increase in value of
GBP10,693k, which relates predominately to the increase in fair
value of PDS Biotechnology Corporation.
PDS Biotechnology Corporation, is quoted on Nasdaq Capital
Markets under the ticker "PDSB" and fair value has been established
by using the last quoted price of $12.55 on 30 June 2021 (H1 2020:
$2.01). In June 2021 NetScientific made a further investment in PDS
of GBP363k at a share price of $8.50 per share as part of a
successful $52m public offering. The Group has invested GBP4,090k
in PDS to date (H1 2020: GBP3,234k). NetScientific now holds
approximately 4.72% of PDS's fully diluted share capital post the
June placing (H1 2020: 5.76%).
The shares in CytoVale, Inc., Epibone, Inc., and G-Tech Medical,
Inc., are not quoted on an active market. The fair value of each
has been established using the price of the most recent investment
by a third party, this is consistent with past valuations.
On 31 March 2021, Netscientific purchased 5,215 ordinary shares
or 2.25% in SageTech Medical Equipment Ltd on the secondary market
at a 35% discount. The shares are not quoted on an active market.
The fair value has been established using the price of the most
recent investment round. The fair value at 30 June 2021 is GBP308k
based on a GBP59 price per share, a gain of GBP107k during the
period.
On 30 April 2021, Netscientific purchased 198,500 ordinary
shares or 0.43% in PointGrab Ltd during the last funding round at
$0.40 per share. The shares are not quoted on an active market. The
fair value at 30 June 2021 based using the price of the last
investment round is GBP57k.
The carrying value of all Group assets was assessed in light of
the COVID-19 pandemic and the long-term impacts that this will have
on the investments of the Group. No impairments or adjustments were
deemed necessary.
11. DERIVATIVE FINANCIAL ASSETS CLASSIFIED AS FAIR VALUE THROUGH PROFIT AND LOSS (FVTPL)
Warrants & convertible loans classified Unaudited
as FVTPL Six months Audited
ended 30 Year ended
June 31 December
2021 2020
GBP000s GBP000s
----------------------------------------------------- -------------- --------------
Opening balance at start of period 78 262
Additions 100 -
Additional accrued interest 2 109
Release of provision - 224
Conversion to Equity Investments classified
as FVTOCI - (645)
Change in fair value during the period (1) 128
Closing balance at end of period 179 78
-------
% of issued Currency
Name Country of incorporation share capital denomination GBP000s
-------------------------- ------------------------- -------------- -------------- -------
PDS Biotechnology Warrant USA - US$ -
G-Tech Medical, Inc. USA 0.76% US$ 77
Sofant Technologies
Ltd UK - UKGBP 102
179
---------------------------------------------------- -------------- -------------- -------
The PDS warrant expired on 12 May 2021.
G-Tech Medical, Inc., is not quoted on an active market. The
Common form convertibles are held at a fair value of $106k/GBP77k
the price at the last external round in May 2020. NetScientific
holds 0.76% of the fully diluted share capital as financial assets
classified as FVTPL and a further 3.04% as equity investments
classified as FVTOCI giving a total investment in G-Tech of 3.80%
fully diluted.
On 30 April 2021, NetScientific invested GBP100k in Sofant
Technologies Ltd convertible loan note as part of the British
Business Bank "BBB" backed funding round of GBP400k. Interest is
earnt at a rate of 10% per annum for a term of 36 months. There is
a 20% discount on conversion and a 100% redemption premium.
Longevity and Neumitra convertible loan notes are unchanged and
remain fully impaired.
12. INVENTORY
Unaudited
Six months Audited
ended 30 Year ended
June 31 December
2021 2020
GBP000s GBP000s
---------------------------------- ------------ --------------
Finished products 89 74
Closing balance at end of period 89 74
Inventories are held at net realisable value. Finished products
constitute ProteaseTag active neutrophil elastase immunoassay
kits.
During the period the impairment charges totalled GBPNil (H1
2020: GBPNil).
13. TRADE AND OTHER RECEIVABLES
Current Unaudited
Six months Audited
ended 30 Year ended
June 31 December
2021 2020
GBP000s GBP000s
---------------------------------- ------------ --------------
Trade receivables 81 28
Taxation 51 43
Other receivables 162 46
Prepayments 104 54
Accrued income 216 205
Closing balance at end of period 614 376
The carrying value of trade and other receivables classified at
amortised cost approximates fair value. The Group does not hold any
collateral as security against any trade and other receivables.
Estimated credit losses have been calculated as follows: 10% if
currently outstanding, 33% if 30 to 60 days past due and 100%
provided if more than 60 days past due.
Unaudited
Six months Audited
ended 30 Year ended
June 31 December
2021 2020
GBP000s GBP000s
-------------------------------------------- ------------ --------------
Gross carrying amount of trade receivables 109 47
Impairment provision (estimated credit
losses) (28) (19)
Trade receivables 81 28
14. CASH AND CASH EQUIVALENTS
Unaudited
Six months Audited
ended 30 Year ended
June 31 December
2021 2020
GBP000s GBP000s
---------------------------------- ------------ --------------
Short term deposits 6,500 785
Cash and cash equivalents 940 843
Closing balance at end of period 7,440 1,628
The cash held within subsidiary Glycotest, Inc., of GBP441k (H1
2020: GBP1,541k) is not freely available for use within the wider
group as it would need the consent of a 40% minority
shareholder.
15. TRADE AND OTHER PAYABLES
Current Unaudited
Six months Audited
ended 30 Year ended
June 31 December
2021 2020
GBP000s GBP000s
---------------------------------- ------------ --------------
Trade payables 335 173
Other payables 114 9
Corporation tax 32 32
Deferred income 287 -
Accruals 404 447
Closing balance at end of period 1,172 661
The carrying value of trade and other payables classified as
financial liabilities are measured at amortised cost which
approximates fair value.
16. LEASE LIABILITIES
Transition Method and Practical Expedients Utilised
On adoption of IFRS 16, the Group recognised right-of-use assets
and lease liabilities in relation to leases of office space, which
had previously been classified as operating leases.
The lease liabilities were measured at the present value of the
remaining lease payments, discounted using the incremental
borrowing rate as at 1 January 2019. The incremental borrowing rate
is the rate at which a similar borrowing could be obtained from an
independent creditor under comparable terms and conditions. The
rate applied was 3.5%.
Lease liability Unaudited
Six months Audited
ended 30 Year ended
June 31 December
2021 2020
GBP000s GBP000s
------------------------------------ ------------ --------------
Opening balance at start of period (194) (224)
Add:
Payments 19 38
Less:
Interest charge during the period (5) (8)
Closing balance at end of period (180) (194)
Split as follows:
Current Liability (32) (31)
Long Term Liability (148) (163)
------------------------------------ ------------ --------------
(180) (194)
------------------------------------ ------------ --------------
The judgement that the Group was reasonably certain to extend
for the full term of the lease beyond the contractual breaks in the
third, fifth and seventh years of the lease have made a material
difference to the carrying value of the asset/liability. The impact
of this judgement is to increase the initial asset/liability
amounts by GBP216k, GBP181k and GBP114k respectively.
The Group has elected to utilise the practical expedient for all
rent concessions that meet the criteria. The practical expedient
has been applied retrospectively, meaning it has been applied to
all rent concessions that satisfy the criteria, which in the case
of the Group, occurred from March 2020 to June 2020.
Accounting for the rent concessions as lease modifications would
have resulted in the Group remeasuring the lease liability to
reflect the revised consideration using a revised discount rate,
with the effect of the change in the lease liability recorded
against the right-of-use asset. By applying the practical
expedient, the Group is not required to determine a revised
discount rate and the effect of the change in the lease liability
is reflected in profit or loss in the period in which the event or
condition that triggers the rent concession occurs.
All rent concessions were repaid during the period.
17. LOANS AND BORROWINGS
Lease liability Unaudited
Six months Audited
ended 30 Year ended
June 31 December
2021 2020
GBP000s GBP000s
------------------------------------------- ------------ --------------
Total falling due within one year (49) (28)
Total falling due more than one year (456) (287)
Closing balance at end of period (505) (315)
The maturity of the loans are as follows:
Amounts falling due within one year
on demand (49) (28)
Amounts falling due between one and
two years (94) (58)
Amounts falling due between two and
five years (282) (184)
Amounts falling due over five years (80) (45)
------------------------------------------- ------------ --------------
(505) (315)
------------------------------------------- ------------ --------------
Loans and borrowings represent:
An unsecured loan note of GBP100k has been issued by a UK
subsidiary, of which GBP60k is outstanding at 30 June 2021 (H1
2020: GBP70k). There is no interest charged and is payable in equal
instalments of GBP10k. First instalment upon signing of document
and then equally over nine years.
On 9 April 2020 Netscientific entered into an 18-month secured
GBP700,000 line of credit with AB Group a company controlled by
Melvin Lawson. The facility, which incurs interest of 10.0% p.a. on
drawn amounts and 3.0% p.a. on undrawn amounts and has an
arrangement fee of 1%, it can be extended by mutual agreement for
an additional six months and is secured on the whole of
NetScientific's interest in PDS.
On 16 June 2021 NetScientific drew down GBP350k under the loan
facility agreement with AB Group to fund in the short term the
purchase of 60,000 PDS ordinary shares for GBP363k in the latest
$52m public offering at a price of $8.50 per share. On 30 June 2021
the GBP350k loan agreement with AB Group plus GBP2k of interest and
commitment fees was repaid in full.
In the prior year on 12 August 2020 for prudent financial
management, the Group made a GBP400k drawdown on the 18-month
secured GBP700,000 line of credit facility with the AB Group. The
line of credit and interest of GBP402k was repaid in full on the 28
August 2020. The funds were used to fund the purchase of additional
PDS shares.
On 12 October 2020 and 11 June 2021, a UK subsidiary entered
into a secured HSBC coronavirus business interruption loan
agreement "CBIL's" for GBP245k and then GBP200k. The subsidiary had
taken out a GBP50k bounce back loan that had to be repaid. The
GBP245k CBIL's funds were drawn down on 18 November 2020 and the
GBP200k on 29 June 2021. The CBIL's facility incurs interest of
3.99% p.a. above the Bank of England base rate. The first twelve
months is interest free and the loan is repayable within six years
with principal repayments starting after thirteen months. The total
outstanding at 30 June 2021 was GBP445k (H1 2020: GBP50k).
18. CALLED UP SHARE CAPITAL
On 29 June 2021 the Company issued 5,958,123 of 5p ordinary
shares at 130p per share, raising gross funds of GBP7,746k and net
funds of GBP7,309k after deducting costs of GBP437k (H1 2020:
GBPNil).
On 25 January 2021 the Company issued 101,066 of 5p ordinary
shares at 49.47p per share to Chairman John Clarkson, who has taken
the payment in shares, rather than cash for fees owed to
Development Financial and Management Services Ltd.
In the prior year on 24 August 2020, a share capital
re--organisation took place. This had the effect of consolidating
each ten existing ordinary shares into one new ordinary share. This
was done to increase the market value of the Company's shares
relative to the nominal value of the shares.
The effect of the share capital re--organisation was that:
1. the Existing Ordinary Shares of 5p each sub--divided into:
a) one Interim Ordinary Share, being an ordinary share in the
capital of the Company with a nominal value of 0.5p; and
b) one Deferred Share being a deferred share in the capital of
the Company with a nominal value of 4.5p each, and
2. the resulting Interim Ordinary Shares then consolidated into
New Ordinary Shares of 5p each (the "New Ordinary Shares") based on
one New Ordinary Share for every 10 Interim Ordinary Shares.
Four additional existing 5p ordinary shares were issued to
ensure that the ordinary shares were exactly divisible by ten. The
nominal value of the new ordinary shares is 5p. The number of new
ordinary shares of 5p once the share re-organisation became
effective was 7,856,187.
The Deferred Shares are not transferable. The holders of the
Deferred Shares shall not, by virtue of or in respect of their
holdings of Deferred Shares, have the right to receive notice of
any general meeting of the Company or the right to attend, speak or
vote at any such general meeting. The rights attaching to the
Deferred Shares will be minimal and such shares do not carry any
dividend rights and will only be entitled to a payment on a return
of capital (whether by winding up or otherwise) after an amount of
GBP10,000,000 has been paid in respect of each New Ordinary Share
(an extremely remote possibility).
The Deferred Shares will not be listed or admitted to trading on
AIM (nor any other stock market) and will not be transferable
without the prior written consent of the Company. The holders of
the Deferred Shares shall be deemed to have conferred the
irrevocable authority on the Company at any time to: (i) appoint
any person, for and on behalf of such holder, to, inter alia,
transfer some or all of the Deferred Shares (without making any
payment therefor) to such person(s) as the Company may determine
(including without limitation the Company itself); and (ii)
repurchase or cancel such Deferred Shares without obtaining the
consent of the holders thereof. In addition, the Company may
repurchase all of the Deferred Shares, at a price not exceeding 1p
in aggregate. The Articles have been amended to reflect the
creation of the Deferred Shares and to set out the rights attaching
to them.
On 25 August 2020, the Company issued 3,521,480 of 5p ordinary
shares at 65p per share to acquire 100% of the share capital in EMV
Capital at a cost of GBP2,289k from Futura Messis Group Limited a
related party owned by Dr. Ilian Iliev. On the same date the
Company issued a further 3,538,455 of 5p ordinary shares via a
placement at 65p per share respectively, raising net funds of
GBP2,117k. The General Meeting on the 24 August 2020 duly passed
all resolutions authorising the capital re-organisation which had
the effect of consolidating ten existing shares into one new
ordinary share; the issue of 3,535,455 new ordinary shares to
Futura Messis Group Limited; and the adoption by the Company of new
Articles of Association.
The total number of voting rights in the Company and issued
capital at 30 June 2021 is 20,975,311 5p ordinary shares (30 June
2020: 78,561,866, 31 December 2020: 14,916,122.
19. RELATED PARTY DISCLOSURES
On 25 January 2021 the Company issued 101,066 of 5p ordinary
shares at 49.47p per share to Chairman John Clarkson, who has taken
the payment in shares, rather than cash for fees owed to
Development Financial and Management Services Ltd.
On 16 June 2021 NetScientific drew down GBP350k under the loan
facility agreement with AB Group a company controlled by Melvin
Lawson to fund in the short term the purchase of 60,000 PDS
ordinary shares for GBP363k in the latest $52m public offering at a
price of $8.50 per share. The facility, which incurs interest of
10.0% pa on drawn amounts and 3.0% pa on undrawn amounts and has an
arrangement fee of 1%, was amended to allow the redrawing of funds
once drawn.
On 30 June 2021 the GBP350k loan agreement with AB Group plus
GBP2k of interest and commitment fees was repaid in full.
Except as noted above, there are no additional related party
transactions that could have a material effect on the financial
position or performance of the Group and of the Company during this
financial period under review.
20. EVENTS AFTER THE REPORTING PERIOD
In line with this strategy, post-balance sheet, EMV Capital
announced a GBP1m investment in Cambridge-based Martlet Capital, as
part of a GBP12m investment alongside Saranac Partners and other
investors, providing access to a portfolio of over 50 minority
investments in life science, healthcare, cleantech, sustainability,
industrials and semi-conductors, many with co-investments by some
of the leading Cambridge and UK investment groups. As part of the
investment in Martlet Capital, EMV Capital, together with Saranac
Partners and Martlet, intends to establish a follow-on funding
vehicle Cambridge Marquity Investments Limited, which is expected
to be 40% owned by the Group. The Group expects to make future
judicious investments through Marquity, targeting the more advanced
portfolio companies, which show the requisite strong performance to
add shareholder value and realise returns. Finally, the Group
intends to provide a line of credit of up to GBP1m to Marquity,
enabling it to operate quickly and decisively, and capitalise on
emerging opportunities from Martlet Capital. This investment gives
us access to the growth stories of successful technology companies
emerging from the world class Cambridge ecosystem.
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END
IR DKFBPABKDQCB
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