CPT.L Regulatory News (CPT)

19 September 2017

Concepta plc ("Concepta" or the "Company")

Interim Results

Concepta plc (AIM: CPT), the pioneering UK healthcare company and developer of a proprietary platform and suite of products targeted at the personalised mobile health market with a primary focus on women's fertility and specifically unexplained infertility, announces its interim results for the six months to 30 June 2017.

Operational Highlights

· Continuing to progress flagship myLotus fertility product towards market launch in China and Europe

· Signed the first distributor agreement in China with Beijing ThinkBrio Medical Technology Consulting Co Ltd ("ThinkBrio")

· First myLotus sales order of £225,000 received from HuanZhong Biotech Co Ltd ("HZ Biotech")

· First shipment of myLotus products from UK production sent to China as part of first sales order to HZ Biotech

· Appointed founding member of Concepta, Zhang Zhi Gang, as Head of China Operations

· Achieved ISO13485 accreditation for myLotus for commercial launch in UK and Europe

· Signed technology transfer agreement with Selective Antibodies to develop stress test for myLotus fertility product

· Appointed Neil Mesher, CEO of Philips (UK and Ireland), as Non Executive Director

Financial Position

· Cash balance at the period end was £1,234,974 (H1 2016 £341,249)

· Loss for the period of £1,083,905 (H1 2016 £414,589)

· Cash outlay for Doncaster factory facilities and equipment was £512,686

Chairman's Statement

I am pleased to report Concepta's half year results for the six months to 30 June 2017. During this period, the Company has made significant inroads towards the launch of its flagship myLotus product in China and towards setting up the infrastructure and resources, both in the UK and China, to support the future scale-up of production and sales.

We have been working hard on the complex process of moving from laboratory prepared product to ISO 13485 certified production facilities and the fit out of the new manufacturing facility in Doncaster, UK has been progressing well. The recruitment of site management and staff, and the installation of equipment, and associated infrastructure has resulted in the expectation that the new facilities in Doncaster will be fully operational by the end of 2017. During this period, limited production has been facilitated at our Colworth site and the first product for sale has been shipped to China. 

In addition to preparation for the launch of our myLotus fertility product in China, the on-going process of achieving CE marking for Europe continues, with clinical and stability trials starting in September 2017. The CE marking accreditation is expected to be achieved by the end of 2017, allowing the launch of myLotus into the UK and German markets in the first half of 2018. 

 Whilst having made significant progress towards commercial launch in both China and in Europe of our myLotus product, some of the key milestones in our development towards these goals during the period have been slower to materialise than expected and this was highlighted in our June statement. These related to changes to the Chinese regulatory framework on health apps, which necessitated additional development work and a delay in our new Doncaster facility becoming fully operational. However, post the period end, both of these issues have been dealt with and we have seen a significant increase in enquiries from various new potential distributors in China and we will keep shareholders fully informed with progress.

Our primary focus during the period has been on the preparation for scale up and production of myLotus, we have also been busy with the development of new products to complement our myLotus range. This includes a stress test, which enables users to monitor stress through quantitative measurement of their levels of stress hormones, of which cortisol is the key one. This new product development has been progressed by utilising the resources of Selective Antibodies, following the technology transfer and licence agreement we signed and announced on 7 February 2017. The development of this new product will take several years to bring to market, but as it extends the product range, it will support ongoing growth in future years.

To support our future plans, the Board of Directors has also been strengthened with the appointment of Neil Mesher, CEO of Philips UK & Ireland, who has brought his significant experience and industry knowledge to contribute to our strategic planning process.

Financial review

· The Group's total comprehensive loss for the six months to 30 June 2017 was £1,083,905 (30 June 2016 £414,589)

· The basic and diluted loss per share was £(0.01) (six months to 30 June 2016 £(0.01)

· Cash balance as at 30 June 2017 was £1,234,974 (30 June 2016 £341,249)

During the period, tight cost control has been implemented and finance facilities for the plant and equipment required for the Doncaster factory has been agreed. 

As the Company is at an early stage of development, it is not anticipated that there will be sufficient earnings arising in the short term that will enable the Board to make the recommendation or pay any dividends.

Outlook

Concepta is focused on delivering immediate milestones that are linked to the manufacture, marketing and sales of the initial myLotus product offering in the fertility area. The potential of the myLotus platform playing a role in the shift towards Personalised Health is being recognised outside of the Company and we have started to explore the opportunities and to match them to the requirements that will be linked to the rate of growth.

The immediate focus is the launch of myLotus in China and the CE marking to allow its launch into Europe. Following on from the progress in the first half of 2017, the Company expects to achieve both these objectives by the first half of next financial year and in turn begin to generate revenues for the Company. The certification of the Doncaster production facility is expected to be complete by the end of 2017 and to support the planned manufacturing scale up, David Darrock will be joining the Company as Site Manager (COO designate). David has significant experience in the full manufacturing processes in this industry.

Whilst our initial product offering is focused on helping women to conceive, we are currently running a hospital evaluation process in China to extend the use of the myLotus product into early pregnancy monitoring, as there is a very high demand for information on the healthy progression of the pregnancy in the early stages. Depending on the results, the potential application of the product would be utilised by up to 18 million births per year in China and would increase our opportunities to add this product to every market we launch into. Additionally, it would create an additional earnings stream for the Group, and the benefits would be demonstrated during the 2018 financial year.

The transition from a start-up to a fully operational company is always a challenging one. However, despite delays to the initial launch of our myLotus product, I believe that we have made positive progress over the period, laying the foundations required for ongoing rapid growth and, in turn, a successful myLotus product launch and penetration into the Chinese and European markets by the end of this year and 2018 respectively.

Adam Reynolds

Chairman

**ENDS**

Enquiries:

The Company

Adam Reynolds, Chairman

Tel: +44 (0) 7785 908158

SPARK Advisory Partners Limited (Nomad)

Neil Baldwin / Mark Brady

Tel: +44 (0)20 368 3550

Beaufort Securities Limited (Broker)

Jon Belliss

Tel: +44 (0)20 7382 8300

Yellow Jersey PR (Financial PR)

Felicity Winkles / Joe Burgess

Tel: +44 (0) 7748 843 871

About Concepta Plc:

Concepta plc is a pioneering UK healthcare company that has developed a proprietary platform and products targeted at the personalised mobile health market with a primary focus on women's fertility and specifically unexplained infertility*.

Founded in 2013, Concepta has developed a revolutionary flagship product 'MyLotus' for home self-testing that helps women with unexplained infertility to conceive.

MyLotus is the only consumer product which allows both quantitative and qualitative measurements of measurement of a woman's personal hCG and LH hormone levels in an easy to use home test to facilitate higher conception rates and early diagnosis of any fertility problems. Competitor products currently only allow qualitative measurement and are based on the 'average woman'.

Concepta has a defined route to market for its new 'My Lotus' product with Regulatory approvals for launch in China in place for 2016 and CE-Marking for UK and Europe to follow in 2017 where the revenue potential of the Chinese and EU infertility market is worth c.£600m per annum for the company.

*Unexplained infertility refers to women that have been unable to conceive after 6 months of trying. This highly motivated target group of consumers won't typically be offered medical intervention until 12 months of unsuccessfully trying, with IVF not offered until two years. Research indicates couples start to take positive action ahead of this time and there is little medical support to help them do so.

Consolidated statement of comprehensive incomeFor the 6 months ended 30 June 2017

1 Unaudited 5 months to 30 June 2016 relates to Concepta Diagnostics Limited only (prior to reverse takeover of Concepta plc on26 July 2016).

Consolidated statement of financial positionAs at 30 June 2017

The accompanying notes are an integral part of these financial statements.

Consolidated statement of changes in equity

For the months ended 30 June 2017

The accompanying notes are an integral part of these financial statements.

Consolidated statement of cash flows

1 The cash inflow on acquisition (net of cash acquired) in 31 December 2016 relates to the cash and cash equivalent of Concepta PLC as at date of acquisition (26 July 2016).

Significant non-cash transactions

On 26 July 2016 Concepta PLC acquired the entire issued share capital of Concepta Diagnostics Limited for a consideration of £3,025,916, satisfied by the issue of shares of £2,275,796 (non-cash transaction) and cash of £750,120. Also, shares were issued in settlement of Concepta Diagnostics Limited's debt of £650,000.

Notes to the audited interim financial information for the 6 months ended 30 June 2017

1. General information

Concepta PLC (the "Company", formerly, Frontier Resources International PLC until 26 July 2016) is a public limited company incorporated and domiciled in England and Wales. The registered office of the Company is 1 Park Row, Leeds, England, LS1 5AB. The registered company number is 06573154.

The principal activity of the Company and its subsidiary is in the development and commercialisation of mobile health diagnostics medical devices. 

2. Significant accounting policies

Basis of preparation

The interim financial information for the six months ended 30 June 2017, which was approved by the Board of Directors on 18 September 2017, does not constitute statutory accounts as defined by section 434 of the Companies Act 2006.

The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRSs), as adopted by the European Union ("adopted IFRSs") and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

The financial information presented is unaudited and has been prepared using the same accounting policies as those adopted in the financial statements for the period ended 31 December 2016 and expected to be adopted in the financial year ending 31 December 2017.

The interim financial information include unaudited comparative figures for the unaudited 5 months to 30 June 2016 of Concepta Diagnostics Limited (prior to reverse takeover on 26 July 2017) and comparatives for the year ended 31 December 2016 that have been extracted from the audited financial statements for that year.

The financial statements for the year ended 31 December 2016 were reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain an adverse statement under section 498 (2) or (3) of the Companies Act 2006.

In the opinion of the Directors, the interim financial statements for the period present fairly the financial position and the results from operations and cash flows for the period.

No new IFRS standards, amendments or interpretations became effective in the six months to the 30 June 2017 which had a material effect on this consolidated interim financial information.

Going concern

The Directors have prepared a cash flow forecast covering a period extending beyond 12 months from the date of these financial statements.

The forecast contains certain assumptions about the performance of the business including growth in future revenue, the cost model and margins; and importantly the level of cash recovery from trading. The Directors are aware of the risks and uncertainties facing the business but the assumptions used are the Directors' best estimate of the future development of the business.

After considering the forecasts and the risks, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For these reasons, they continue to adopt the going concern basis of accounting in preparing the annual financial statements. The financial information does not include any adjustments that would result from the going concern basis of preparation being inappropriate.

3. Segment information

The Group has one operating segment which is involved in the provision of diagnostic healthcare products. The operating segment has no revenue reported for the period to 30 June 2017 as it is in an early stage of its operation.

4. Cost of sales

The cost of sales in the 6 months to June 2017 relates to costs incurred in the running of batches of products for trial testing, employees and contractors costs and running costs of the new manufacturing site at Doncaster.

5. Earnings per share

Basic earnings per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period. The weighted average number of shares for the current and prior years included 30,343,950 shares issued by Concepta PLC as consideration for the acquisition of Concepta Diagnostics Limited as if they had always been in issue.

Due to the loss in the periods, the effect of the share options was considered anti-dilutive and hence no diluted loss per share information has been provided.

6. Taxation

The tax credit represents the research and development tax credit for current interim and prior periods.

7. Property, plant and equipment

During the period the Group spent £117,863 for the fit-out of the new manufacturing site at Doncaster and purchase of new plant and equipment of £394,823.

8. Intangible assets

The Group capitalised development costs of £117,149 during the interim period.

9. Related Party Transactions

During the period, the Company entered into the following transactions with related parties:

Amount outstanding at year end (included in Trade and other payables)

1. Dr. Ian Gilham has an interest in Stowheath Limited. He resigned as a director of Concepta Diagnostics Limited on 25 July 2016.

2. Mr. Erik Henau has an interest in Adaxis Limited. The fees paid for the period 30th June 2016 and 31st December 2016 were for his consultancy work on the reverse takeover transaction before he was employed by Concepta PLC. Mr Henau is a director of Concepta PLC and Concepta Diagnostics Limited.

3. Mr. Adam Reynolds, a non-executive director of Concepta PLC is a director of and has an interest in Reyco Limited.

4. Service fees were paid to CFPro Limited and Cambridge Financial Partners LLP for accounting and consultancy support, companies in which Barbara Spurrier has an interest. Barbara Spurrier is a director of Concepta PLC.

5. Mr. Neil Herbert, a non-executive director of Concepta PLC has an interest in Cambrian Limited.

6. Dr. Mark Wyatt, a non-executive director of Concepta plc has an interest in Mercia Investments Limited.