TIDMNSCI
RNS Number : 2777B
NetScientific PLC
03 April 2017
3 April 2016
NetScientific plc
("NetScientific" or the "Group")
NetScientific Full Year Results for the year ended 31 December
2016
London, UK - 3 April 2017 - NetScientific plc (AIM: NSCI), the
transatlantic healthcare IP commercialisation Group, announces its
audited full year results for the year ended 31 December 2016.
Operational highlights:
Portfolio progress:
-- Vortex BioSciences
o Gained CE Mark and FDA Class 1 Registration for its liquid
biopsy VTX-1 system
o Studies presented at the American Association for Cancer
Research (AACR) support the application of Vortex's VTX-1
product
o Leading advisors appointed to the Scientific Advisory Board
led by Massimo Cristofanilli, M.D.
o Appointment of Deborah Neff, ex Chief Operating Officer of
Complete Genomics, as Non-Executive Director
o Exclusive license of a series of four patents covering a novel
cell electroporation technology from Harvard University
o Co-founder and Chief Scientific Advisor, Professor Dino Di
Carlo, received the US Presidential Early Career Award for
Scientists and Engineers, for devising a first-of-its-kind
technique
-- Glycotest
o Medical Advisory Board formed, including leading experts in
liver disease to advise on the development of diagnostic test for
liver related diseases
o Strengthened its intellectual property portfolio with Japanese
Patent grant
o HCC Panel clinical validation study plan developed, with
investigators and sites identified
-- ProAxsis
o Successfully registered a CE Mark to enable commercialisation
in laboratories of its respiratory test, a novel ProteaseTag(R)
Active Neutrophil Elastase Immunoassay (NE), for chronic
respiratory diseases including COPD and Cystic Fibrosis
o Established a leading Scientific Advisory Board to support the
development of its ProteaseTag(R) activity-based immunoassays and
point-of-care tests
o NE immunoassay highlighted as highly predictive for future
respiratory exacerbations in University of Dundee publication
(American Journal of Respiratory and Critical Care Medicine,
December 2016)
o Company awarded research grants from BioMedical Catalyst,
Invest Northern Ireland and Innovate UK
-- Wanda
o Foad Dabiri was appointed Chief Executive Officer, taking over
from Steve Curd, to refocus Wanda on its core strategy and progress
the Company through its commercialisation phase
o Formation of Scientific Advisory Board, including
distinguished physicians, health economics scientists, and
technologists
o Signed contract with Health Resource Solutions, enabling the
organisation to use WANDA's chronic condition digital management
platform to provide improved at home care to its patients
o Wanda selected by Los Angeles-based 24Hr HomeCare to provide
its predictive analytics and behavioural guidance technology to
improve outcomes for at risk-patients and reduce hospital
readmissions
o Collaborative deal with one of the US's biggest hospital
groups, Dignity Health, to launch OncoVerse, the first ever digital
health oncology care platform
-- PDS Biotechnology
o Positive Phase I study results for its PDS0101 immunotherapy
for HPV-related cancers and initiates planning for upcoming Phase
II clinical trials in several HPV-related cancers
o Signed a Co-operative Research and Development Agreement with
the National Cancer Institute, a division of the US National
Institutes of Health, to co-develop novel cancer immunotherapies
through Phase II clinical trials
o Appointed Dr Robert Shepard, M.D., F.A.C.P. as Chief Medical
Officer and Dr Panna L. Dutta, Ph.D. as Vice President of Drug
Development and Manufacturing
o NetScientific converts warrants and loan to increase
shareholding from 14.85% to 17.4%
Corporate highlights:
-- Appointment of Ian Postlethwaite as Chief Financial Officer
-- Professor Stephen Smith joined the Board as Non-Executive Director of NetScientific
Financial highlights:
-- Loss after tax of GBP13.1m (2015: loss GBP12.7m) reflecting
the business model, where the portfolio companies are largely
subsidiaries developing their technologies and are therefore
currently loss making
-- Available cash resources of GBP9.5m (at 31 December 2015:
GBP23.2m). Cash used in operations, was GBP12.9 million (2015:
GBP10.7 million)
Post year end highlights:
-- Vortex BioSciences
o Liquid biopsy VTX-1 commercially launched in 2017
-- Glycotest
o Peer review publication: "Changes in the glycosylation of
kininogen and the development of a kininogen based algorithm for
the early detection of HCC"
Commenting on the Group's 2016 full year results, Francois
Martelet, CEO of NetScientific, said: "NetScientific is a strong
healthcare IP commercialisation group with a world-class portfolio
of disruptive technologies, led by experienced management
teams.
"2016 was a year of execution, where we focused on delivering
the individual development milestones within each of our portfolio
companies, paving the way in 2017 for continued progress and
maturation of our investments.
"We continue to believe that we have a world-class portfolio of
companies, experienced and relevant management teams and the
business and financing strategies to support their development and
attract the necessary third-party validation capital."
Meeting and conference call for analysts
Francois Martelet, Chief Executive Officer, and Ian
Postlethwaite, Chief Financial Officer, will hold a presentation
and simultaneous conference call with Q&A for analysts today at
09:30 at Stifel's offices, 150 Cheapside, London, EC2V 6ET. Gene
Walther, Chief Executive Officer of Vortex BioSciences, and Foad
Dabiri, Chief Executive Officer of WANDA, will join via the
conference call to give updates on the progress of their respective
businesses. The presentation will be available on NetScientific's
website shortly before the call at
http://netscientific.net/investors/presentations.
Participant dial-in: 08006940257
International dial-in: +44 (0) 1452 555566
Participant code: 67358107
For more information, please contact:
NetScientific Tel: +44 (0)20 3514 1800
François R. Martelet,
M.D., CEO
Ian Postlethwaite, CFO
Stifel Nicolaus Europe Tel: +44 (0)20 7710 7600
Limited (NOMAD and broker)
Jonathan Senior/ David
Arch/ Ben Maddison
Consilium Strategic Tel: +44 (0)20 3709 5700
Communications netscientific@consilium-comms.com
Mary-Jane Elliott /
Jessica Hodgson / Chris
Welsh / Laura Thornton
About NetScientific
NetScientific is a transatlantic healthcare technology group
with an investment strategy focused on sourcing, funding and
commercialising technologies that significantly improve the health
and well-being of people with chronic diseases. For more
information, please visit the website at www.netscientific.net
CHAIRMAN'S AND CHIEF EXECUTIVE OFFICER'S STATEMENT
NetScientific is a transatlantic healthcare IP commercialisation
Group focused on sourcing, funding and commercialising technologies
and companies that have the potential to treat chronic diseases and
significantly improve the health and well-being of people.
The UK is the global hub for IP commercialisation with
transatlantic businesses selecting the UK as listing destination
due to the strength of the peer group and understanding of the
sector. NetScientific is well placed amongst its peer group to
benefit from the appreciation and understanding of this sector. The
Group is highly international in its approach and differentiated by
its global network and majority shareholding positions in its
portfolio assets.
During 2016, the Group has continued to significantly progress
its breakthrough technologies towards commercialisation, with
portfolio assets across the Diagnostics, Therapeutics and Digital
Health sectors.
Great progress has been achieved with the lead portfolio
companies, which are either beginning, or poised for,
commercialisation. Notably, Vortex Biosciences, which is developing
a novel liquid biopsy technology that aims to revolutionise cancer
diagnosis, monitoring and treatment by isolating and collecting
intact circulating tumour cells, launched its first product, the
VTX-1 instrument, at Tri-Conference on Molecular Medicine on 21
February 2017. NetScientific also made a further investment in PDS
Biotechnology to help support the development of its novel and
highly promising broad-based cancer immunotherapy, the Versamune(R)
platform, which is about to commence multiple Phase II clinical
programmes. ProAxsis, an early warning diagnostic test for
infection in cystic fibrosis and COPD patients, gained a CE Mark
for its ProteaseTag immunoassay, and is preparing to launch its
point-of-care (POC) test, NEATstik(R), this year. Glycotest, a
liver diagnostics company, completed a head-to-head clinical
evaluation of its liver cancer panel which demonstrated
significantly better results versus the current industry standard,
with further development of commercial grade kits for CLIA
laboratory use underway. Another important milestone in 2016 was
Wanda's collaboration with Dignity Health, Inc. on Oncoverse, a
virtual care and treatment plan for cancer patients. Dignity Health
manages one of the largest healthcare systems in the US.
Vortex Biosciences
Vortex Biosciences gained a CE Mark approval for its VTX-1
instrument during the period, and VTX-1 was registered as a Class I
medical Device with the FDA. Vortex published key results in the
November 2016's edition of the journal, Oncotarget, showing that
its next-generation circulating tumour cells (CTC) capture system
helped enhance the clinical assessment of a cancer's mutation
profile and metastatic status. Combining CTC capture and analysis,
with separate and complementary evaluation of cfDNA (circulating
free DNA), offers a better understanding of dynamic tumour profiles
and a patient's disease. Both of these were significant milestones
on the path towards making the VTX-1 instrument commercially
available in early 2017 and generating sales into the clinical
market in the US.
Wanda
Wanda, our lead digital health company, has developed an
artificial intelligence (AI) platform for remote patient monitoring
that enables care teams to help patients live longer, with more
efficient and lower cost care. In 2016, significant efforts were
made to establish contracts and patient user plans in the home
care, nursing, direct-to-consumer and B2B segments. Initial client
base results have demonstrated the power of Wanda's in-line
predictive analytic capabilities in managing patients with chronic
disease conditions.
Wanda has been able to agree a number of deals with clients
across a broad cross-section of home healthcare providers, but has
faced a number of commercial headwinds in determining the best
route forward for optimal revenue and profit generation. During the
previous 12 months, despite an upgraded product suite, the company
has achieved only limited business traction and revenues in the
market have been below expectations. This, in combination with the
competitive, complex and fast-changing digital health commercial
environment has made gaining momentum difficult. Based on a
strategic review, we took the decision to restructure the Company
to focus on its core capabilities. Foad Dabiri, Wanda's Chief
Technology Officer, was recently promoted to Chief Executive
Officer to lead Wanda based on his strong expertise in the digital
health sector.
Also as a result of an in-house impairment review, we have taken
a provision in these results on the debt provided to Wanda,
reducing the outstanding debt from GBP8.8 million to GBP3.8
million. This has no impact at Group level, but is nevertheless
significant at Company level.
OncoVerse is a digital health platform designed to enable cancer
patients' care teams to collaborate in real-time to allow
clinicians across all disciplines to work together to determine the
most effective treatment plan for cancer patients. OncoVerse was
initially conceived by a Dignity Health physician who wanted a tool
to improve team collaboration, especially when evaluating a complex
cancer case and determining the appropriate patient treatment plan.
Dignity Health engaged Wanda to develop the software due to the
Company's proven track record supporting informed treatment
decisions and reducing administrative costs. The collaboration with
Dignity Health is now well advanced and the concept attracts
interest from major corporations.
PDS Biotechnology
PDS Biotechnology continued to see strong progress with its
T-cell activating technology platform, Versamune(R), which combines
three critical attributes for an effective immunotherapy: T-cell
induction, reduced tumour suppression and priming of a potent
anti-tumour response without the conventional associated
toxicities. PDS's oncology pipeline includes compounds for
prostate, ovarian, breast and colorectal cancers, in addition to
its lead PDS0101 programme for several HPV-related cancers. PDS
made some important advances through the year in progressing its
lead Versamune(R) T-cell Activating platform, and presented results
at a number of conferences (most recently PDS0101 Phase I/IIa data
from a number of HPV-induced cancers at the Society for
Immunotherapy of Cancer meeting in November 2016). A key event for
the company was the meeting with the FDA in August 2016 regarding
the design of the Phase II clinical studies in several HPV related
cancers.
Glucosense
Glucosense, our smallest portfolio company and the focus of
minimal investment in the period was dissolved after it had reached
a go/no-go point and failed to replicate its initial in vitro
results. The investment in Glucosense totalled only GBP0.7m in
equity and loans.
Seed Portfolio
During the year, the company reviewed its portfolio of five seed
stage investments (the 'Seed Portfolio'). The review concluded that
there were no plans to invest additional funds in the Seed
Portfolio because it was unlikely that NetScientific's investment
criteria of gaining initial majority control would be achieved.
Limited investment has been made to date, mostly in the form of
convertible loans. Nevertheless, these investments are reviewed
periodically in tandem with the companies' business plans and
progress.
Conclusion
In summary, 2016 saw continued progress across most of the
portfolio as the companies strengthen their individual positions
working toward raising new funds. Additionally, NetScientific
continues to evaluate new opportunities for investment, as it moves
new technologies towards an eventual valuable exit in line with
business strategy.
Finance
For the year, the Group made a loss of GBP13.1 million (2015:
loss GBP12.7 million) which is split between continuing and
discontinued operations as follows:
- Continuing operations GBP12.4 million (2015: GBP10.4 million)
- Discontinued operations GBP0.7 million (2015: GBP2.3 million)
The loss reflects the business model, where the portfolio
companies are largely subsidiaries developing their technologies
and are therefore currently loss making.
Cash
Cash on the balance sheet as at 31 December 2016 was GBP9.5
million (2015: GBP23.2 million). Cash used in operations, was
GBP12.9 million (2015: GBP10.7 million).
Going concern
The Directors have prepared and reviewed budget forecasts which
were approved by the board of directors in the board meeting of
March 2017. The budget considered amongst other things the timing
of the Series A funding rounds of the subsidiary companies and the
cash position of the Group at the beginning of 2017. After due
consideration of these forecasts and current cash resources, the
Directors consider that the Company and Group have adequate
financial resources to continue in operational existence for the
foreseeable future (being at least twelve months from the date of
this report), and for this reason the financial statements have
been prepared on a going concern basis.
Board changes
Peter Thoms stepped down as NetScientific Chief Financial
Officer on 26th January 2016, and we thank him for his contribution
to the Group.
On 17 February 2016, the Group was pleased to announce the
appointment of Professor Stephen Smith as Non-Executive Director.
Stephen has held senior leadership roles in the NHS and academia.
He has had a long and distinguished career as a clinician
scientist, Head of Department, Dean and CEO with the Medical
Research Council, University of Cambridge, Imperial College, London
and Imperial College Healthcare NHS Trust. During his career,
Stephen has also spun out two companies from Cambridge University -
Metris Therapeutics Ltd and GNI Group Ltd. GNI was established as a
start up in Japan in 2001 and successfully achieved an Initial
Public Offering (IPO) on the Tokyo Stock Exchange six years
later.
On 15 June 2016, Ian Postlethwaite was appointed Chief Financial
Officer of the Group. Ian had been the Finance Director of Allergy
Therapeutics plc for 14 years and was a significant contributor to
the success of the company. During that time, Allergy Therapeutics
listed on AIM, achieved a number of financial goals, including two
fund raisings in 2015 to support the Company's clinical and other
development plans, and grew revenues from products on sale in
Europe.
Summary and Outlook
In 2016, the NetScientific Group delivered on a number of
development milestones critical to enhance the competitiveness and
value of the individual portfolio companies. Whilst new pipeline
opportunities will continue to be reviewed, the aim in 2017 is to
focus on the growth of the Company on a number of levels, including
further maturation of each lead portfolio Company's platform,
including striking corporate deals in order to underline a coherent
strategy and progression towards translation of technology success
into commercial success. We continue to believe that we have a
world-class portfolio of companies, experienced and relevant
management teams and the business and financing strategies to
support their development and attract the necessary third-party
validation capital.
Sir Richard Sykes Francois R. Martelet,
M.D.
Non-Executive Director Chief Executive Officer
and Chairman
31 March 2017 31 March 2017
Consolidated Income Statement
For the year ended 31 December 2016
Notes 2016 2015
restated
GBP000's GBP000's
Continuing Operations
--------------------- -----------
Revenue 518 21
Cost of sales (255) (6)
--------------------- -----------
Gross profit 263 15
Other operating income 68 44
Research and development costs (7,443) (6,838)
General and administrative
costs (5,001) (2,843)
Other costs (316) (887)
Loss from operations (12,429) (10,509)
Finance income 94 77
Finance expense (8) -
Share of loss of associates (49) -
Loss before taxation (12,392) (10,432)
Income tax (charge)/credit (18) 12
--------------------- -----------
Loss for the year from continuing
operations (12,410) (10,420)
Discontinued Operations
--------------------- -----------
Loss for the year from discontinued
operations (666) (2,326)
--------------------- -----------
Total loss for the year (13,076) (12,746)
--------------------- -----------
Owners of the parent (11,195) (10,842)
Non-controlling interests (1,881) (1,904)
--------------------- -----------
(13,076) (12,746)
Basic and diluted loss per
share from continuing and
discontinued operations attributable
to owners of the parent during
the year: 4
Continuing operations (20.8p) (24.4p)
Discontinued operations (1.1p) (4.0p)
From loss for the year (21.9p) (28.4p)
--------------------- -----------
Consolidated Income Statement and Other Comprehensive Income
For the year ended 31 December 2016
2016 2015
GBP000's GBP000's
Loss for the year (13,076) (12,746)
Items that may be subsequently
reclassified to profit or
loss:
Exchange differences on translation
of foreign operations 634 134
Total comprehensive loss for
the year (12,442) (12,612)
---------------------- --------------------
Attributable to:
Owners of the parent (10,084) (10,596)
Non-controlling interests (2,358) (2,016)
--------- -----------
(12,442) (12,612)
--------- -----------
All other comprehensive income will be reclassified to retained
earnings on the ultimate sale of any relevant subsidiary or
investment company.
Consolidated Statement of Financial Position
As at 31 December 2016
Notes 2016 2015
GBP000's GBP000's
---------- ----------
Assets
Non-current assets
Property, plant and equipment 779 285
Investments in equity accounted 357 -
associates
Available for sale investments 6 2,863 1,807
Derivative financial assets 18 100
Other receivables 37 754
---------- ----------
Total non-current assets 4,054 2,946
---------- ----------
Current assets
Trade and other receivables 1,578 560
Cash and cash equivalents 9,456 23,239
---------- ----------
Total current assets 11,034 23,799
---------- ----------
Total assets 15,088 26,745
---------- ----------
Liabilities
Current liabilities
Trade and other payables (2,044) (2,156)
Loans and borrowings (128) (50)
---------- ----------
Total current liabilities (2,172) (2,206)
---------- ----------
Non-current liabilities
Loans and borrowings (80) -
Total non-current liabilities (80) -
---------- ----------
Total liabilities (2,252) (2,206)
---------- ----------
Net assets 12,836 24,539
---------- ----------
Issued capital and reserves
Attributable to the parent
Called up share capital 2,554 2,554
Share premium account 47,233 47,233
Capital reserve account 237 237
Foreign exchange reserve 1,802 691
Retained earnings (35,115) (24,371)
---------- ----------
Equity attributable to the
owners of the parent 16,711 26,344
Non-controlling interests (3,875) (1,805)
---------- ----------
Total equity 12,836 24,539
---------- ----------
Consolidated Statement of Changes in Equity
As at 31 December 2016
Shareholders' equity
---------- ---------- ---------- ---------- ------------------------------------
Foreign Non-
Share Share Capital Retained exchange controlling Total
capital premium reserve earnings reserve Total interests equity
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ -----------
1 January 2015 1,795 30,845 237 (13,529) 446 19,794 (1,098) 18,696
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ -----------
Loss for the
year - - - (10,842) - (10,842) (1,904) (12,746)
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ -----------
Other
comprehensive
income
Foreign
exchange
differences - - - - 245 245 (111) 134
Total
comprehensive
income - - - (10,842) 245 (10,597) (2,015) (12,612)
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ -----------
Increase in
subsidiary
shareholding - - - (171) - (171) 220 49
Disposal of
subsidiaries - - - - - - 1,088 1,088
Issue of share
capital 759 17,450 - - - 18,209 - 18,209
Costs of share
issue - (1,062) - - - (1,062) - (1,062)
Share-based
payments - - - 171 - 171 - 171
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ -----------
31 December
2015 2,554 47,233 237 (24,371) 691 26,344 (1,805) 24,539
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ -----------
Loss for the
year - - - (11,195) - (11,195) (1,881) (13,076)
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ -----------
Other
comprehensive
income
Foreign
exchange
differences - - - - 1,111 1,111 (477) 634
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ -----------
Total
comprehensive
income - - - (11,195) 1,111 (10,084) (2,358) (12,442)
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ -----------
Decrease in
subsidiary
shareholding - - - 39 - 39 (20) 19
Disposal of
subsidiaries - - - 171 - 171 308 479
Share-based
payments - - - 241 - 241 - 241
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ -----------
31 December
2016 2,554 47,233 237 (35,115) 1,802 16,711 (3,875) 12,836
--------------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ -----------
Consolidated Statement of Cash Flows
As at 31 December 2016
2016 2015
GBP000's GBP000's
---------- ----------
Cash flows from operating
activities
Loss after income tax including
discontinued operations (13,076) (12,746)
Adjustments for:
Depreciation of property,
plant and equipment 141 130
Amortisation of intangible
assets - 55
Loss on disposal of property,
plant and equipment (1) 3
Share of loss of associates
and joint venture 49 400
Gain on sale of associates
and joint venture - (214)
Loss on disposal of subsidiaries 483 508
Impairment of intangible
assets - 191
Provision against recoverability
of loan 75 177
Share-based payments 241 171
Bad debt written off - 4
Foreign exchange gains (121) (85)
Finance income (94) (77)
Finance costs 8 50
Tax charge 18 (108)
(12,277) (11,541)
Changes in working capital
Increase in trade and other
receivables (237) (55)
(Decrease)/Increase in trade
and other payables (364) 882
---------- ----------
Cash used in operations (12,878) (10,714)
---------- ----------
Income tax received 94 83
---------- ----------
Net cash used in operating
activities (12,784) (10,631)
---------- ----------
Cash flows from investing
activities
Investment in joint venture - (35)
Investment in associate (363) (25)
Proceeds from sale of associate - 25
Disposal of discontinued
subsidiaries, net of cash
disposed of - (108)
Purchase of property, plant
and equipment (470) (137)
Proceeds from sale of property,
plant and equipment 13 1
Purchase of intangible assets - (164)
Interest received 46 38
Purchase of available for (898) -
sale investments
Net cash used in investing
activities (1,672) (405)
---------- ----------
Cash flows from financing
activities
Proceeds from borrowings 50 50
Proceeds on change in subsidiary
shareholding 20 1
Proceeds from share issue - 18,208
Share issue cost - (1,062)
--------- ---------
Net cash from financing activities 70 17,197
--------- ---------
(Decrease) / increase in
cash and cash equivalents (14,386) 6,161
Cash and cash equivalents
at beginning of year 23,239 16,866
Exchange gains on cash and
cash equivalents 603 212
--------- ---------
Cash and cash equivalents
at end of year 9,456 23,239
--------- ---------
Notes to the Financial Information for the Year Ended 31
December 2016
1. GENERAL INFORMATION
The Company is a public limited company incorporated on 12 April
2012 and domiciled in England with registered number 08026888 and
its shares are listed on the Alternative Investment Market (AIM) of
the London Stock Exchange.
2. BASIS OF PREPARATION
The preliminary results of the year ended 31 December 2016 have
been extracted from audited accounts which have not yet been
delivered to the Registrar of Companies.
The Financial Information set out in this announcement do not
constitute statutory accounts for the year ended 31 December
2016.
The report of the auditors on the statutory accounts for the
year ended 31 December 2016 was unqualified and did not contain a
statement under Section 498 of the Companies Act 2006. The
Financial Statements for the year ended 31 December 2016 included
in this announcement were authorised for issue in accordance with a
resolution of the Board of Directors on 31 March 2017.
3. SIGNIFICANT ACCOUNTING POLICIES
The Group financial information has been prepared in accordance
with International Financial Reporting Standards as adopted by the
European Union that are effective for accounting periods beginning
on or after 1 January 2016.
While the financial information included in this preliminary
announcement has been prepared in accordance with IFRS, this
announcement does not in itself contain sufficient information to
comply with IFRS.
4. LOSS PER SHARE
The basic and diluted loss per share is calculated by dividing
the loss for the financial year by the weighted average number of
ordinary shares in issue during the year. Potential ordinary shares
from outstanding options at 31 December 2016 of 3,412,324 (see note
26) are not treated as dilutive as the entity is loss making.
2016 2015
GBP000's GBP000's
------------------------------------- ----------- -----------
Loss attributable to equity holders
of the Company
Continuing operations 10,623 9,310
Discontinued operations 572 1,532
----------- -----------
Total 11,195 10,842
----------- -----------
Number of shares
Weighted average number of ordinary
shares in issue 51,075,695 38,228,552
-------------------------------------- ----------- -----------
5. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
The Group had the following subsidiaries at 31 December
2016:
Proportion Proportion
of ownership of ownership
Proportion Proportion interest interest
of of held by held by
ownership ownership non-controlling non-controlling
Country interest interest interests Interests
Primary of at 31 at 31 at 31 at 31
trading incorporation December December December December
Name address or registration 2016 2015 2016 2015
-------------------- --------- ----------------- ---------- ---------- ---------------- ----------------
NetScientific
UK Limited (a) UK 100% 100% - -
ProAxsis Ltd (b) UK 56.5% 56.5% 43.5% 43.5%
Glucosense
Diagnostics
Limited* (iv) (a) UK 60.7% 60.7% 39.3% 39.3%
Healthbox Israel
LLP (ii) (a) UK 50% 50% 50% 50%
IsraelScientific
Ltd (a) UK 100% 100% - -
NetScientific
America, Inc. (c) USA 100% 100% - -
Vortex BioSciences,
Inc. (i) (d) USA 95% 95% 5% 5%
Wanda, Inc.
(i)(iii) (e) USA 70.9% 71.3% 29.1% 28.7%
Glycotest,
Inc. (i) (f) USA 87.5% 87.5% 12.5% 12.5%
For all undertakings listed above, the country of operation is
the same as its country of incorporation or registration.
All of the ownerships shown above relate to ordinary
shareholdings.
(i) Options have been issued by Vortex BioSciences, Inc., Wanda,
Inc. and Glycotest, Inc. which if exercised would dilute the
Company's shareholding by 30%, 11% and 21% respectively.
(ii) The Group holds 50% of the voting shares and has the
casting vote. The Group is entitled to 80% of profits subsequent to
repayments of capital and member operational expenses.
(iii) Following issue of further shares during the year the
Group's interest was reduced to 70.9% on 31 July 2016.
(iv) An application to strike-off Glucosense Diagnostics Limited
was filed shortly after the year end.
6. AVAILABLE FOR SALE INVESTMENTS
Represent unquoted equity
securities
2016 2015
GBP000's GBP000's
--------------------------- ---------- ----------
At 1 January 1,807 1,807
Warrant exercised 100 -
Additions 956 -
At 31 December 2,863 1,807
---------------------------- ---------- ----------
Country of % of issued Currency
Name incorporation share capital denomination GBP000's
------------------ --------------- -------------- ------------- --------
PDS Biotechnology
Corporation USA 17.4% US$ 2,713
CytoVale, Inc. USA 2.15% US$ 150
Other -
------------------ --------------- -------------- ------------- --------
2,863
---------------------------------- -------------- ------------- --------
Valuation of unquoted equity investments
The fair value of unlisted securities is established using
International Private Equity and Venture Capital Valuation
Guidelines (IPEVCVG). Given the nature of the Group's investments
in seed, start-up and early-stage companies, where there are often
no current and no short-term future earnings or positive cash
flows, it can be difficult to gauge the probability and financial
impact of the success or failure of development or research
activities and to make reliable cash flow forecasts.
The Group considers that fair value estimates that are based
entirely on observable market data will be of greater reliability
than those based on assumptions and accordingly where there has
been any recent investment by third parties, the price of that
investment will generally provide a basis of the valuation.
Consequently, the most appropriate approach to determine fair value
is a methodology that is based on market data, that being the price
of a recent investment.
The length of period for which it remains appropriate to use the
price of recent investment depends on the specific circumstances of
the investment and the stability of the external environment. Where
the Group considers that the price of recent investment,
unadjusted, is no longer relevant and there are limited or no
comparable companies or transactions from which to infer value, the
Group carries out an enhanced assessment based on milestone
analysis and/or industry and sector analysis. In applying the
milestone analysis approach to investments in companies in early or
development stages the Group seeks to determine whether there is an
indication of change in fair value based on a consideration of
performance against any milestones that were set at the time of the
original investment decision, as well as taking into consideration
the key market drivers of the investee company and the overall
economic environment.
If there is no readily ascertainable value from following the
'price of recent investment' methodology, the Group considers
alternative methodologies in the IPEVCVG guidelines, being
principally discounted cash flows and price-earnings multiples
requiring management to make assumptions over the timing and nature
of future earnings and cash flows when calculating fair value.
Factors which the Group considers include, inter alia, technical
measures such as product development phases and patent approvals,
financial measures such as cash burn rate and profitability
expectations, and market and sales measures such as testing phases,
product launches and market introduction.
Where a fair value cannot be estimated reliably, the investment
is reported at the carrying value at the previous reporting date
unless there is evidence that the investment has since been
impaired.
At present, there is a significant range of possible fair value
estimates and the probabilities of the various estimates cannot be
reliably measured.
The investment includes a warrant with an identified fair value
of GBP18k. This has been separately recognised.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR FLLLBDZFZBBQ
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