TIDMN4P
RNS Number : 6373R
N4 Pharma PLC
25 September 2017
25 September 2017
N4 Pharma Plc
("N4 Pharma" or the "Company")
Interim Results
N4 Pharma Plc (AIM: N4P) ("N4 Pharma" or the "Company"),
formerly known as Onzima Ventures Plc, a specialist pharmaceutical
company which reformulates existing drugs and vaccines to improve
their performance, announces its unaudited interim results for the
six months ended 30 June 2017.
Highlights:
-- Successfully completed the reverse takeover of N4 Pharma Limited ("RTO")
-- Successful placing to raise GBP1.7m (the "Placing") and re-admission to AIM
-- Change of name to N4 Pharma Plc (formerly known as Onzima Ventures Plc)
-- Divestment of investment portfolio to focus solely on
reformulation of generic drugs and vaccines
-- Filing of sildenafil PCT patent application
-- Filing of additional generic product patent opportunities
-- Appointment of BDD to undertake initial human pilot clinical
trial for sildenafil reformulation
-- Cash balance at period end of approximately GBP1.5 million
Nigel Theobald, Chief Executive Officer of N4 Pharma Plc,
commented:
"This has been an exciting period for the Company. We are
pleased to report these interim results, our maiden results since
completion of the Company's acquisition of 100 per cent. of N4
Pharma Limited and re-admission to AIM with our new management team
and business model.
Activity in the first half of the year was focused on the
divestment of the legacy investment portfolio and completion of the
RTO. Since then, we have moved quickly to progress the development
of our lead product, the reformulation of sildenafil, and we will
shortly be commencing our initial human pilot clinical trials based
on our formulation. Concurrently, we have been adding to our
product pipeline through the filing of additional generic product
patent opportunities with the potential for reformulation and
improvement.
"On behalf of the Board, I would like to thank all of our
shareholders for their support leading up to completion of the RTO
and welcome all new shareholders to the Company for what we believe
will be an exciting time in the development of our products."
Enquiries:
N4 Pharma Plc
Nigel Theobald, Via Alma PR
CEO,
Stockdale Securities
Tom Griffiths Tel: +44(0)207 601
6100
Beaufort Securities
Elliot Hance Tel: +44(0)207 382
8300
Alma PR
Josh Royston Tel: +44(0)778 090
Robyn Fisher 1979
Tel: +44(0)754 070
6191
N4 Pharma Plc, formerly known as Onzima Ventures Plc, is the
holding company of N4 Pharma UK Limited ("N4 UK") and with N4 UK
form the group (the "Group"). N4 UK is a specialist pharmaceutical
company which reformulates existing drugs and vaccines to improve
their performance.
The Company acquired the remaining 51 per cent. of the share
capital of N4 UK on 3 May 2017 by way of a reverse takeover
("RTO").
As the Company did not trade in line with the interpretation of
IFRS 3, Business Combinations, until the acquisition of N4 UK, the
transaction is treated as a reverse acquisition into a
non-operating public shell within the scope of IFRS 2.
In accordance with the requirements of accounting standards, the
results of the Company are only consolidated for the period
post-acquisition. The comparative figures and pre-acquisition
results show N4 UK only.
This is the first set of interim results produced by the Company
following the reverse takeover of N4 to form the Group with effect
from 3 May 2017.
Chief Executive's Statement
Half year results
During the half year to 30 June 2017, as anticipated, no revenue
was generated by the Company. Other operating income included
GBP22,910 of government grants.
The operating loss for the period of GBP390,377 (2016:
GBP73,701) was impacted by the costs associated with the RTO.
Key Events and Opportunities
Following the successful placing and reverse takeover of N4 UK
by the Company in May 2017, the new Board has completed its planned
reorganisation of the Company to focus on its research and
development programme for both its generic and vaccine
divisions.
The net proceeds of the Placing ensure that the Company will be
funded throughout 2017 and 2018. The funds raised will enable us to
produce initial human clinical data to establish the
pharmacokinetic profile of our sildenafil reformulation and help us
to determine how we will position the Nuvec vaccine delivery system
for the best approach to engage with vaccine companies.
Generic Division
The main focus for the Company's generic division is the
reformulation of sildenafil (commonly known as Viagra), where we
are seeking to improve the speed at which the drug takes effect
whilst also extending the duration of the action. We have completed
our initial in vitro reformulation work on the drug and have
recently appointed Bio-Images Drug Delivery Limited ("BDD") who
will undertake a small scale human pilot clinical trial. This will
be conducted in a limited number of healthy male volunteers to give
us human pharmacokinetic data, which will determine the amount of
drug our reformulation will deliver, and which can then be compared
against existing erectile dysfunction products. Once we have this
data, we will be able to make any final adjustments to our
reformulation and present the pharmacokinetic data together with
relevant manufacturing (quality) information to the Food and Drug
Administration ("FDA") and the relevant European regulatory
authorities along with a proposed approach to conducting a pivotal
clinical study which will be required for marketing
authorisation.
It is expected that this small scale human pilot clinical trial
will commence in Q1 2018, with results due in Q2 2018. It is our
intention then either to partner with a large pharmaceutical
company to complete the pivotal trial (thereby earning a licence
fee and generating milestone payments for N4 Pharma) or to explore
the possibility of conducting the pivotal trial ourselves and, in
doing so, assess the balance of increased capital risk versus the
rewards relative to a company of our size.
In addition to licensing the patents for sildenafil from Opal IP
Limited ("Opal IP") and Nuvec from the University of Queensland, we
have licensed four further patents from Opal IP for reformulations,
namely valsartan, aprepitant, duloxetine and paroxetine. Our
initial approach for these products is to file the relevant data
needed for a Patent Co-operation Treaty ("PCT") patent application
before we publish our sildenafil patent. In our opinion, this gives
the Company the optimal chance to secure patent protected
reformulations for these products as well as sildenafil.
Whilst we continue to commit resources to the reformulation of
sildenafil ahead of bringing it to market, we are also undertaking
all the necessary preparatory work on the other four drugs referred
to above to allow us to take them forward in the future. In doing
so, we will be making a market assessment and an analysis of how to
progress each reformulated drug to a point of commercial value.
Vaccine Division
The focus for the Company's vaccine division continues to be on
generating data for our delivery system which will enable us to
engage commercially with pharmaceutical and biotech companies who
are looking to utilise delivery systems, such as Nuvec, to improve
the ability for their own DNA and RNA vaccines that they have in
development. N4 Pharma is currently working with consultants
experienced in the field of vaccine delivery, to advise on the
nature of the research we need to undertake to positively
differentiate Nuvec from other existing delivery technologies. We
intend to engage with commercial partners to exploit the potential
clinical utility of Nuvec. Our intention is not to develop vaccines
ourselves, but provide licences to third party companies which will
enable them to use our delivery system for their own vaccines in
development. The business model is similar to that in our generics
division in that we aim to secure licence payments for the use of
our delivery system and ultimately royalties on any products sold
using Nuvec.
In the short term, we will focus our efforts on Nuvec and have
placed additional research on a potential hepatitis B vaccine on
hold.
N4 will be attending the World Vaccine Congress in Barcelona
10-12(th) October , which will be widely attended by the leading
experts and companies in the vaccine field and presenting a poster
summarising its initial work showing how the topography of its
nanoparticles are important in influencing pDNA vaccine
development.
Outlook
The Board remains optimistic about the future of the Company and
its prospects. We are reaching a key milestone as we move towards
the pilot human trial for our reformulation which, if the results
are positive, will greatly advance the value of the data we have
obtained and furthermore provide a clearer path towards
commercialisation.
Whilst we are excited about the Company's potential pipeline of
products we are establishing, our immediate focus is on those
products with the potential for near term commercialisation, namely
sildenafil and Nuvec. In parallel, we hope shortly to have a plan
and budget in place for our pipeline of other generic products
which also seek to address potential multi-billion dollar markets
whilst, as detailed above, setting out a programme for our vaccine
work. We look forward to providing updates on both at the
appropriate time.
By order of the Board
Nigel Theobald
Chief Executive Officer
N4 Pharma Plc
N4 Pharma Plc (formerly Onzima Ventures Plc) and its controlled
entities
Condensed consolidated Statement of Comprehensive Income
(unaudited) for the six months ended 30 June 2017
Proforma Proforma
Notes Six months Six months
to 30 June to 30 June
2017 2016
(Unaudited) (Unaudited)
GBP GBP
------------------------------------ -------------------------------------
Government grant
income 2 22,910 -
Gross Profit 22,910 -
Research and development (137,449) -
costs
General and administration
costs (148,759) (73,701)
Reorganisation costs (127,079) -
Operating loss for
the period (390,377) (73,701)
Deemed cost of acquisition 4 (1,023,734) -
Finance income/
(expenditure) (5,126) (191)
Loss for the period
before tax (1,419,237) (73,892)
Taxation - -
Loss for the period
after tax (1,419,237) (73,892)
Other comprehensive - -
income net of tax
Total comprehensive
loss for the period
attributable to equity
owners of N4 Pharma
Plc (1,419,237) (73,892)
=========================== ====== ==================================== =====================================
Loss per share
attributable
to owners of the
parent
Weighted average
number of shares:
Basic 54,521,134 8,844,706
Diluted 55,549,561 8,844,706
Basic loss per share (2.60p) (0.84p)
Diluted loss per
share (2.55p) (0.84p)
All activities derive from continuing operation
The notes below form an integral part
of these financial statements.
N4 Pharma Plc (formerly Onzima Ventures Plc) and its controlled
entities
Condensed consolidated Statement of Financial Position
(unaudited) for the six months ended 30 June 2017
Proforma Proforma Proforma
Notes 30 June 30 June 31 December
2017 2016 2016
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
-------------------------------------- --------------------------- -------------------------------
Assets
Non-current
assets
Investments 3 - - -
--------------- ------- -------------------------------------- --------------------------- -------------------------------
- - -
Current assets
Trade and other
receivables 152,239 26,173 23,187
Cash and cash
equivalents 1,507,936 41,300 19,751
1,660,175 67,473 42,938
Total Assets 1,660,175 67,473 42,938
------------------------ -------------------------------------- --------------------------- -------------------------------
Liabilities
Current
liabilities
Trade and other
payables (169,102) (102,567) (102,046)
Accruals and
deferred income - - (20,634)
------------------------ -------------------------------------- --------------------------- -------------------------------
Total assets
less current
liabilities 1,491,073 (35,094) (79,742)
------------------------ -------------------------------------- --------------------------- -------------------------------
Non-current
liabilities
Amounts falling
due after more
than one year - (119,922) (204,922)
------------------------ -------------------------------------- --------------------------- -------------------------------
Net Assets/
(Liabilities) 1,491,073 (155,016) (284,664)
------------------------ -------------------------------------- --------------------------- -------------------------------
Equity
Share capital 5 8,569,682 100 100
Share premium 6 8,286,313 - -
Reverse acquisition
reserve 6 (14,138,244) - -
Merger relief
reserve 6 299,045 - -
Share option
reserve 7 178,278 - -
Retained earnings (1,704,001) (163,578) (284,764)
------------------------ -------------------------------------- --------------------------- -------------------------------
Total Equity 1,491,073 (163,478) (284,664)
------------------------ -------------------------------------- --------------------------- -------------------------------
The notes below form an integral part
of these financial statements.
N4 Pharma Plc (formerly Onzima Ventures Plc) and its controlled
entities
Condensed consolidated Statement of Changes in Equity
(unaudited) for the six months ended 30 June 2017
(i) Six months
ended
30 June 2017 -
Unaudited
---------------------- ------------------------ ------------------------ ----------------------- ------------------ --------------- --------------------
Share Share Share Reverse Merger Retained Proforma
Capital Premium Option Acquisition Relief Earnings Total
Reserve Reserve Reserve Equity
GBP GBP GBP GBP GBP GBP GBP
---------------------- ------------------------ ------------------------ ----------------------- ------------------ --------------- --------------------
Balance at 1
January
2017 100 - - - - (284,764) (284,664)
Total
comprehensive
loss for the
period - - - - - (1,419,237) (1,419,237)
Share issue 8,551,539 8,415,653 - - - - 16,967,192
Cost of share
issue - (129,340) - - - - (129,340)
Share option
reserve - - 178,278 - - - 178,278
Group
Reconstruction 18,043 - - (14,138,244) 299,045 - (13,821,156)
At 30 June 2017 8,569,682 8,286,313 178,278 (14,138,244) 299,045 (1,704,001) 1,491,073
(ii) Six months
ended
30 June 2016 -
Unaudited
---------------------- ------------------------ ------------------------ ----------------------- ------------------ --------------- --------------------
Share Share Share Share Retained Proforma
Capital Premium Option Based Earnings Total
Reserve Payments Equity
Reserve
GBP GBP GBP GBP GBP GBP
---------------------- ------------------------ ------------------------ ----------------------- ------------------ --------------- --------------------
Balance at 1
January
2016 100 - - - (89,686) (89,586)
Total
comprehensive
loss for the
period - - - - (73,892) (73,892)
At 30 June 2016 100 - - - (163,578) (163,478)
The notes below form an integral
part of these financial statements.
N4 Pharma Plc (formerly Onzima Plc) and its controlled
entities
Condensed consolidated Statement of Cash Flows (unaudited) for
the six months ended 30 June 2017
Proforma Proforma
Six months Six months
to 30 June to 30 June
2017 2016
(Unaudited) (Unaudited)
GBP GBP
---------------------------- ------------------------------------- -------------------------------------
Operating activities
Loss before tax (1,419,237) (65,430)
Interest 5,126 191
Deemed cost of acquisition 1,023,734 -
Operating loss before
changes in working
capital (390,377) (65,239)
Movements in working
capital:
(Increase) in trade
and other receivables (129,052) (8,835)
Increase in trade
and other payables 52,602 20,472
(Decrease) in trade (204,922) -
and other payables
Cash used in operations (671,749) (53,602)
----------------------------- ------------------------------------- -------------------------------------
Net cash flows used
in operating activities (671,749) (53,602)
----------------------------- ------------------------------------- -------------------------------------
Investing activities
Cash acquired on 402,654 -
reverse acquisition
Net cash flows from 402,654 -
investing activities
---------------------------- ------------------------------------- -------------------------------------
Financing activities
Interest paid - (191)
Proceeds from loan
advanced 104,078 44,922
Net proceeds of ordinary 1,782,542 -
share issue
Cost of share issue (129,340) -
Net cash flows used
in financing activities 1,757,280 44,731
----------------------------- ------------------------------------- -------------------------------------
Net increase/ (decrease)
in cash and cash
equivalents 1,488,185 (8,871)
Cash and cash equivalents
at beginning of the
period 19,751 50,171
Cash and cash equivalents
at 30 June 2017 1,507,936 41,300
The notes below form an integral
part of these financial statements.
N4 Pharma Plc (formerly Onzima Ventures Plc) and its controlled
entities
Notes to the condensed consolidated interim financial statements
for the six months ended 30 June 2017
1. Corporate information
N4 Pharma Plc (the "Company"), (formerly known as Onzima
Ventures Plc) is the holding company for N4 Pharma UK Limited ("N4
UK"), (formerly known as N4 Pharma Limited) and together form the
group (the "Group"). N4 UK is a specialist pharmaceutical company
which reformulates existing drugs and vaccines to improve their
performance. The nature of the business is not deemed to be
impacted by seasonal fluctuations and as such performance is
expected to be consistent.
The Company acquired the remaining 51 per cent. of the share
capital of N4 UK on 3 May 2017 by way of a reverse takeover. The
Company is domiciled in England and Wales and was incorporated and
registered in England and Wales on 6 July 1979 as a public limited
company and its shares are admitted to trading on AIM (LSE: N4P).
The Company's registered office is located at 6th Floor, 60
Gracechurch Street, London EC3V 0HR.
2. Accounting policies
Adoption of new and revised International Financial Reporting
Standards
No new IFRS standards, amendments or interpretations became
effective in the six months to 30 June 2017 which had a material
effect on this interim consolidated financial information. New
standards that have been issued, but that are not yet effective,
have also been considered and it has been decided not to adopt
these new standards early.
Basis of Preparation:
The Group's condensed consolidated interim financial statements,
which are unaudited, have been prepared in accordance with
International Accounting Standard ("IAS") 34, "Interim Financial
Reporting".
This is the first accounting period of the Group and as such, no
statutory financial statements have yet been prepared. The first
accounting reference date will be 31 December 2017 and the
financial statements will be prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the European Union.
The interim consolidated financial information for the six
months ended 30 June 2017 are unaudited. In the opinion of the
Directors, the interim consolidated financial information presents
fairly the financial position, and results from operations and cash
flows for the period.
The financial statements are presented in sterling, which is the
Group's functional currency as the UK is the primary environment in
which it operates.
Basis of consolidation:
On 3 May 2017, the Company became the legal parent of N4 UK
through a reverse takeover transaction ("RTO" or "reverse
takeover"). The Company was not a business as defined by IFRS 3
prior to the transaction and as such was outside of the scope of
IFRS 3, Business Combinations. The consolidated financial
statements present the substance of the transaction in accordance
with IFRS2. The comparative results to 31 December 2016 and 30 June
2016 represent the position of N4 UK prior to the reverse
takeover.
The consolidated financial statements of the Company are
presented as a continuation of N4 UK's financial statements,
reflecting the commercial substance of the transaction. However,
the equity structure presented in the consolidated financial
statements reflects the equity structure of the Company, including
the new shares issued as part of the transaction. Where information
relates or includes the results of N4 UK prior to the reverse
takeover, it has been labelled 'pro forma'.
Significant Accounting Policies:
The condensed, consolidated interim financial statements have
been prepared under the historical cost convention, with the
exception of investments, in accordance with International
Financial Reporting Standards as adopted by the European Union.
While the financial information has been prepared in accordance
with IFRS, as adopted by the European Union, the interim condensed,
consolidated financial statements do not contain sufficient
information to comply with IFRSs.
Financial assets at fair value through profit or loss:
Financial assets designated at fair value through profit or loss
at inception are financial instruments that are not classified as
held for trading but are managed, and their performance is
evaluated on a fair value basis in accordance with the Group's
documented investment strategy.
The Group's policy requires the Board of Directors to evaluate
the information about these financial assets on a fair value basis
together with other related financial information.
Segmental reporting:
At 30 June 2017, the Group operated in one business segment,
that of the development and commercialisation of medicines via
reformulation using advanced pharmaceutical technologies to add
value to generic and soon to be generic drugs. No revenue has yet
been generated by any of the work undertaken by the Group.
The Directors consider that there are no identifiable business
segments that are subject to risks and returns different to the
core business. The information reported to the Directors, for the
purposes of resource allocation and assessment of performance, is
based wholly on the overall activities of the Group.
Cash and cash equivalents:
The Directors consider any cash on short term deposit and other
short term investments to be cash equivalents.
Government grant income
Government grants are recognised only when there is reasonable
assurance that the Company will comply with the conditions
attaching to them and that the grants will be received.
Government grants are recognised in the income statement on a
systematic basis over the periods in which the Company recognises
and expenses the related costs for which the grants are intended to
compensate.
Government grants that are receivable as compensation for
expenses or losses already incurred or for the purpose of giving
immediate financial support to the Company with no future related
costs are recognised in the income statement in the period in which
they become receivable.
Tax
The Group has accumulated losses available to carry forward
against future trading profits. No deferred tax asset has been
recognised in respect of tax losses since it is uncertain at the
balance sheet date as to whether future profits will be available
against which the unused tax losses can be utilised.
Share-based payment arrangements
Equity-settled share-based payments are measured at fair value
at the date of grant using a Black Scholes pricing model. The key
assumptions used in the model have been adjusted, based on
management's best estimate, for the effects of non-transferability,
exercise restrictions and behavioural considerations.
The fair value is expensed on a straight-line basis over the
vesting period, based on the Group's estimate of the number of
shares that will eventually vest and adjusted for the effect of
non-market based vesting conditions.
The value of the change is adjusted to reflect expected and
actual levels of awards vesting. Cancellations of equity
instruments are treated as an acceleration of the vesting period
and any outstanding charge is recognised in full immediately.
3. Critical accounting judgements and estimates
The preparation of the interim condensed consolidated financial
statements in conformity with IFRS requires management to make
certain estimates, assumptions and judgements that affect the
application of accounting policies and the reported amounts of
assets and liabilities and the reported amounts of income and
expenses during the reporting period.
In the process of applying the Group's accounting policies,
management has decided the following estimates and assumptions are
significant to causing potentially material adjustments to the
carrying amounts of assets and liabilities recognised in the
condensed consolidated financial statements.
Value of listed investment
The RTO brought into the Group an investment in Alecto Minerals
Plc ("Alecto") at a cost of GBP59,186 which could not be sold prior
to completion of the RTO and as at 30 June 2017 forms part of the
Group's assets. On 21 December 2016, trading in Alecto's shares on
AIM was suspended due to a proposed reverse takeover.
Since the period end, trading on AIM in Alecto's shares has been
cancelled with effect from 11 July 2017 due to the delay in
publishing an admission document for the proposed reverse
takeover.
Although the Board understands that it is Alecto's intention to
proceed with the proposed reverse takeover, it remains uncertain at
the date of these financial statements whether or when this will be
achieved.
Management has taken the view that, in light of the
circumstances referred to above, it is reasonable to assume that
the Alecto shares no longer hold any value and, as such, has taken
the decision to impair the value of the shares to nil.
4. Reverse takeover
The Company previously held 49 per cent. of the issued share
capital in N4 UK at 2 May 2017.
On 13 April 2017, the Company published an admission document
regarding the proposed acquisition of the remaining 51 per cent. of
N4 UK that it did not already own and to raise capital by way of a
reverse takeover.
Consideration for the acquisition was satisfied by the issue of
4,510,800 new ordinary shares in the Company to the existing
shareholder of N4 UK and 4,591,400 deferred consideration shares.
This constitutes the "post-Share Re-Organisation". The post-Share
Re-Organisation is discussed in more detail in the share capital
note below. The deemed cost of the acquisition is recognised in the
Statement of Comprehensive Income.
The Company also conditionally raised GBP1,500,000 (gross) by
way of a placing of 21,428,571 new ordinary shares at 7p per share
(the "Placing") to fund the development of additional patent
applications for reformulations of a wide range of generic drugs,
to undertake clinical trials for N4 UK's reformulation of
sildenafil and for working capital purposes.
Shareholders' approval of the proposals was obtained at the
Company's general meeting held on 2 May 2017 (the "General
Meeting"). The Placing and reverse takeover was completed on 3 May
2017. The consolidated financial statements of the Company are
presented as a continuation of N4 UK's financial statements,
reflecting the commercial substance of the transaction. However,
the equity structure presented in the consolidated financial
statements as discussed above and in note 7 below reflects the
equity structure of the Company, including the equity instruments
issued as part of the transaction.
5. Share Capital
Proforma
Allotted, called up 30 June 30 June 31 December
and fully paid 2017 (Unaudited) 2016 (Unaudited) 2016 (Audited)
74,714,285 Ordinary
Shares of 0.4p each 298,857 100 100
137,674,431 Deferred 5,506,977 - -
Shares of 4p each
279,176,540 Deferred 2,763,848 - -
Shares of 0.099p
each
----------------------- ------------------------------ -------------------------------
8,569,682 100 100
A resolution was passed at the General Meeting for the issue of
21,428,571 new ordinary shares (the "Placing Shares") at a price of
7 p per share (the "Placing Price") on 2 May 2017. On 3 May 2017,
the Placing raised GBP1,500,000 before fees and expenses.
As part of the Placing, a post-Share Re-Organisation took place,
for which a number of actions occurred. On 2 May 2017, prior to the
RTO being completed, the following transactions took place:
-- 242 shares were allotted before the share capital
re-organisation resulting in a share capital of 181,956,800
ordinary shares of GBP0.001 each;
-- The total ordinary shares were then consolidated into 227,446
ordinary shares of GBP0.80 each; &
-- The 227,446 ordinary shares of GBP0.80 each were then
sub-divided into 45,489,200 ordinary shares of GBP0.004 each.
The transactions that took place on 3 May 2017 were as
follows:
-- 4,510,800 new ordinary shares were issued to the remaining
shareholder of N4 UK in return for the remaining 51 per cent. of
shares in N4 UK constituting the reverse takeover;
-- 4,591,400 deferred consideration shares to be issued under
certain conditions to the same recipient in return for the
remaining 51 per cent. of shares constituting the reverse takeover
(see Note 7 below);
-- GBP1,500,000 was raised by the Placing of 21,428,571 new
ordinary shares at 7 pence per share;
-- Issue of placing warrants on a 1 for 1 basis at an exercise
price of 8.5p per placing warrant;
-- The Company settled a broker invoice via the issue of 285,714
ordinary shares at 7p each; and
-- Warrants exercised resulting in the issue of 3,000,000 new
ordinary shares (see Note 9b).
All ordinary shares rank equally in all respects, including for
dividends, shareholder attendance and voting rights at meetings, on
a return of capital and in a winding-up.
The 137,674,431 deferred shares acquired as part of the reverse
takeover as noted above, have no right to dividends nor do the
holders thereof have the right to receive notice of or to attend or
vote at any general meeting of the Company. On a return of capital
or on a winding up of the Company, the holders of the deferred
shares shall only be entitled to receive the amount paid up on such
shares after the holders of the ordinary shares have received the
sum of GBP1,000,000 for each ordinary share held by them.
6. Reserves
The share premium account represents the amount received on the
issue of ordinary shares by the Company in excess of their nominal
value and is non-distributable.
The merger relief reserve arose on the Company's acquisition of
N4 UK and consists of both the consideration shares amounting to
GBP297,713 and the deferred consideration shares. There is no legal
share premium on the shares issued as consideration as section 612
of the Companies Act 2006, which deals with merger relief, applies
in respect of the acquisition.
The deferred consideration shares will only be issued if the
mid-market price of the Company's ordinary shares exceeds 15p per
share for at least ten consecutive dealing days in the period of
two years following Admission. These shares have been valued using
the Black Scholes model and are included in the merger relief
reserve at a fair value of GBP1,332.
The reverse takeover reserve arises due to the elimination of
the Company's investment in N4 UK. Since the shareholder in N4 UK
became a shareholder of the Company, the acquisition is accounted
for as though the legal acquiree (N4 UK) is the accounting
acquirer.
7. Share-based payments and Share Option Reserve
a) Options
The Company has the ability to issue options to Directors to
compensate them for services rendered and incentivise them to add
value to the Group's longer term share value. Equity settled
share-based payments are measured at fair value at the date of
grant. The fair value determined is expensed on a straight line
basis over the vesting period based on the Group's estimate of the
number of shares that will vest. The value of the change is
adjusted to reflect the expected and actual levels of vesting.
Cancellations of equity instruments are treated as an
acceleration of the vesting period and any outstanding charge is
recognised in full immediately.
Fair value is measured using a Black Scholes pricing model. The
key assumptions used in the model have been adjusted based on
management's best estimate for the effects of non-transferability,
exercise restrictions and behavioural considerations.
As at 30 June 2017, there were 6,245,084.50 options in existence
over ordinary shares of the Company.
On 14 October 2015, 10,804,840 share options were granted to
Gavin Burnell, the Company's former chief executive. Following the
post-Share Re-Organisation, including the consolidation of shares
and subsequent sub-division, these options now equate to a quarter
of the original options issued. The 2,701,210 options held by Gavin
Burnell, issued on 14 October 2015 are exercisable at a price of
0.7p per share (pre-Share Re-Organisation) at any time before 14
October 2025.
On 14 October 2015, Luke Cairns, a non-executive director of the
Company, was granted 2,701,210 share options. Following the
post-Share Re-Organisation, including the consolidation of shares
and subsequent sub-division, these options now equate to a quarter
of the original options issued. The 675,302.50 options held by Luke
Cairns, issued on 14 October 2015 are exercisable at a price of
0.7p per share (pre-Share Re-Organisation) at any time before 14
October 2025.
The aggregate fair value of the share options issued on 14
October 2015 as at 30 June 2017 is GBP30,812.
Following the RTO and subsequent re-admission to AIM on 3 May
2017 ("Admission"), the following options over new ordinary shares
were granted under the Company's share option scheme and are
exercisable at a price of 7p per share:
Luke Cairns 717,143 options
David Templeton 717,143 options
Paul Titley 1,434,286 options
The above share options are exercisable following the third
anniversary of Admission, being 3 May 2020. In the case of Paul
Titley, the exercise of options over 717,143 ordinary shares is
subject to certain performance conditions. These options are
exercisable at a price of 7 pence per share at any time before 14
October 2025.
The fair value of the share options issued on 3 May 2017 is
GBP35,845. The total fair value of share options in issue and not
yet exercised as at 30 June 2017 is GBP66,657.
b) Warrants
In addition to the Placing on 3 May 2017 which raised
GBP1,500,000 before fees and expenses, the Company issued placing
warrants on a 1 for 1 basis at an exercise price of 8.5p per
placing warrant. This resulted in the issue of 21,428,571 warrants
exercisable at 8.5p.
As at 30 June 2017, the total number of warrants in issue was
22,710,923.
The warrants entitle holders to subscribe for new ordinary
shares at any time in the period of two years following the grant
of the warrants. The expiry date of the placing warrants is 3 May
2019. No warrants issued on 3 May 2017 have been exercised.
A previous placing by the Company when trading as Onzima
Ventures Plc resulted in the issue of 15,000,000 investor warrants
issued at an exercise price of 2p per warrant. These warrants
expired on 7 June 2017.
Of these investor warrants, 12,000,000 were exercised before the
expiry date resulting in the balance of 3,000,000 warrants
expiring. Details of the warrants exercised are set out below. Due
to the post-Share Re-Organisation and the 4:1 consolidation of
shares, the warrants exercised resulted in the issue of 1 share for
every 4 warrants.
Details of the warrants exercised during the period are as
follows:
-- Exercise of 1,500,000 warrants over ordinary shares of 0.4p
each at an exercise price of 2p per warrant for 375,000 shares.
-- Exercise of 1,750,000 warrants over ordinary shares of 0.4p
each at an exercise price of 2p per warrant for 437,500 shares.
-- Exercise of 4,000,000 warrants over ordinary shares of 0.4p
each at an exercise price of 2p per warrant for 1,000,000
shares.
-- Exercise of 4,750,000 warrants over ordinary shares of 0.4p
each at an exercise price of 2p per warrant for 1,187,500
shares.
During the period, an amount of GBP228,000, representing the
exercised warrants, has been recognised against share premium and
GBP12,000 to share capital. The fair value of the warrants in issue
and not yet exercised was determined using the Black Scholes model.
The fair value of the warrants at 30 June 2017 was GBP111,621.
8. Earnings per share
Basic earnings per share is calculated by dividing the loss
after tax attributable to the equity holders of the Company by the
weighted average number of shares in issue during the period.
Diluted earnings per share is calculated by adjusting the
weighted average number of shares outstanding to assume conversion
of all potential dilutive shares, namely share options and
warrants.
The basic earnings per share for each comparative period before
the acquisition date shall be calculated by dividing the profit of
N4 UK in each of those periods by the historical weighted average
number of Ordinary shares outstanding multiplied by the exchange
ratio.
9. Related Party Transactions
During the period to 30 June 2017, the non-executive directors'
fees amounted to GBP8,000 (6 months to 30 June 2016: GBPnil); and 6
months to 31 December 2016: GBPnil).
During the period to 30 June 2017, the Company charged N4 UK
GBP4,800 in respect of 50 per cent. of the fees paid to
non-executive directors for the services rendered to N4 UK (6
months to 30 June 2016: GBPnil; and 6 months to 31 December 2016:
GBPnil).
10. Subsequent events
There are no significant subsequent events which require
adjustment or disclosure in these interim condensed consolidated
financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGUACBUPMGMC
(END) Dow Jones Newswires
September 25, 2017 02:01 ET (06:01 GMT)
N4 Pharma (LSE:N4P)
Historical Stock Chart
From Apr 2024 to May 2024
N4 Pharma (LSE:N4P)
Historical Stock Chart
From May 2023 to May 2024