Plant Impact Regulatory News (PIM)

A meeting for analysts will be held at 10am today, 26 October 2015, at the offices of Buchanan, 107 Cheapside, London EC2V 6DN. For further details, contact Buchanan on 020 7466 5000

For immediate release 26 October 2015

Plant Impact plc

('Plant Impact', 'PI' or the Group')

Preliminary results for 12 months ended 31 July 2015

Plant Impact plc (AIM: PIM), leads research and development in crop enhancement to create products that growers can rely on to improve the yield and quality of their crops. Today Plant Impact announces its audited preliminary results for the year ended 31 July 2015.

Financial highlights

· Turnover increased substantially to £4.5m in 2015 (2014: £2.5m)

· Gross profit increased to £3.5m in 2015 (2014: £1.8m)

· Gross margin remained strong at 79% in 2015 (2014: 72%)

· Cash at 31 July 2015 was £7.6m (2014: £0.5m); successful fundraising: attracted £6.2m of new investment via share placement

· First reported full year profit after tax of £0.1m (2014: loss of £0.7m)

Operational highlights

· Expansion of Veritas® sales to all soy-growing regions in Brazil

· Soybean product pipeline agreement with Bayer CropScience; £2.0m cash received

· Launch of an £11 million, multi-year investment programme to develop and launch new products for soy and wheat

· Agreement with Arysta LifeScience to distribute Banzai, a new product for cocoa yield in West Africa

· Veritas technology in field testing in soy-growing regions outside Brazil. Second and third crop enhancement product for soy progressing through technical trials

· Wheat R&D programme field tests continue in US and Europe for first product prototypes

· New team capabilities and expertise: key hires in UK and Brazil

John Brubaker, CEO of Plant Impact plc commented:

'We are delighted with the significant growth over the past year. Having achieved a series of strategic milestones, we remain on course to deliver our plans for 2016 and beyond.

The Board remains confident of the Group's strategic direction and financial prospects over the medium term and the longer term scale-up potential. Plant Impact has a strong foundation to substantially grow the business as we focus on our strategy to expand our technologies into global broad acre crops.

We look forward to maintaining the momentum of 2015 and we thank our shareholders for their continued support.' 

For further information, contact:

Plant Impact

John Brubaker, Chief Executive Tel: +44(0) 1582 465 540

Ailish Tracy, Global Communications Manager

www.plantimpact.com

Peel Hunt - Nominated Advisor and Broker

Dan Webster Tel: +44 (0) 207 418 8900

Richard Brown

George Sellar

Buchanan

Charles Ryland Tel: +44(0) 20 7466 5000

Sophie Cowles

Jane Glover

Business overview

Plant Impact plc and our subsidiary companies (together 'the Group'), lead research and development in crop enhancement to create products that growers can rely on to get more yield from their crops. We use our agricultural industry expertise to find efficient, cost effective ways to offer our solutions to those growers, worldwide.

Our head-office and primary research facility are at the Rothamsted Centre for Research and Enterprise in Harpenden, United Kingdom and we have additional offices in São Paulo and Goiânia, Brazil.

Our technology and products

Using our own scientific research and via collaborations with academic and research institutes such as Lancaster University and Rothamsted Research, we have created proprietary technologies. We have developed and registered a range of products, and we protect our intellectual property and products through patents, trade secrets and trademarks. Our success is research-based as we conduct multi-year product efficacy trials which generate robust and differentiating data to support our marketing and help us maintain our leading position.

Reaching growers with the right partners and distributors

We market our products via the regional agrochemical distributors and global strategic partners that growers trust, such as Bayer CropScience AG and Arysta LifeScience. Through these channels we sell in 20 countries. Currently, the Americas account for more than 75% of our turnover.

Keeping consistent quality in manufacturing

All of our products are manufactured within the UK at three, outsourced, contract manufacturers. We operate a "make-to-order" business, placing orders with manufacturers only when we receive a firm purchase order. We have no plans to own or operate production facilities.

Staying ahead with innovative R&D, academic links and rigorous trials

We conduct research and development for new products, as well as lifecycle enhancements of existing products at our primary research facility at the Rothamsted Centre for Research and Enterprise (RoCRE) in Harpenden, United Kingdom. At RoCRE we have on-demand access to glasshouses, controlled growth environments and a 250 hectare research farm, as well as advanced imaging and analytical equipment. Our in-house chemical formulation laboratory has state-of-the-art capability, equivalent to that used by multinational chemical manufacturers. We also conduct field efficacy and analytical trials with contract research organisations in multiple countries. Each year we typically commission many trials with independent trialists worldwide. Over 60 of these took place in Latin America alone last year.

Maintaining compliance with regulations

Our products are typically regulated under national and multinational rules which govern the manufacture and distribution of foliar fertilisers. Since these compounds are well characterised the regulatory process is relatively simple and speedy. This is in contrast to the regulation of pesticides which typically takes many years and requires more extensive testing. We maintain a strict regulatory compliance approach and we continue to monitor the current and evolving regulations related to our current and future products.

Chairman's statement

2015 has been a year of extraordinary achievement for Plant Impact. Our strategy of engagement with senior partners in the crop input business has developed in a most positive way. Four years of field development with soy in Brazil, resulted in the first full commercial season of Veritas® with Bayer CropScience in the region. Also our promising soy R&D portfolio formed the basis of a Product Development and Commercialisation Agreement concluded between the Company and with Bayer CropScience's central strategy and R&D team. These deals and the prospect of geographical expansion in soy are reported more fully in the CEO's note. Suffice to say, the ambitions of both partners are well aligned. For Bayer CropScience, it is for a full range of crop enhancement products in combination with their superior crop protection package. If we achieve this together it will project them emphatically to the top as a soy solutions company. With the weight and coverage of the Bayer CropScience sales team in Brazil behind Veritas® and other Plant Impact products in development, we expect our business to grow such that we will become a global leader in crop enhancement, first in Brazil and then elsewhere. The 'globalise and scale' element of our strategy that aims to achieve success through making big incumbent companies more successful in their own businesses, is beginning to show results.

The last year demonstrated that this approach is attractive to other partners too. Our Europe, Middle East and Africa (EMEA) team struck a second important partnership with a crop protection leader; Arysta LifeScience, the top company in West African crop protection. Arysta is working with Plant Impact to bring crop enhancement products to cocoa growers in West Africa. Cocoa is one of the few high value crops for which Africa is the essential global supplier.

On the back of these tangible successes the Plant Impact board secured additional shareholder funding which, taken together with the break-even operational performance of the business, secures the Group's future on its present trajectory whilst funding investment in our best prospects.

With the Group fully funded, with its broadening R&D opportunities, its partnership responsibilities and its widening geographical spread, Plant Impact embarked on a recruitment campaign last year for a number of senior and operational people across all functions. These staff are becoming fully engaged now. The Board expect their contribution to value will be evident in the coming year's results. In spite of this increase in activity and resource the Group will not lose its habit of disciplined focus, nor that of unwavering diligence in matters of cash spend. The Board is convinced that this gearing up is manageable, is of sufficient quality and is fully justified by the Group's prospects. Further, it is in our view necessary to deliver the level of performance that meets the expectations that our shareholders have evidently invested in us.

I believe that the Board governance procedures are fit for this more intensive management activity and under the guidance of our broker and nominated adviser, Peel Hunt I am satisfied that oversight is clear, that activities are transparent and that the management culture developing under the CEO is characterised by a proper level of prudence and probity. Martin Robinson retired at the end of the financial year after ten years as a NED and an important time as Chairman. He remains an adviser and Board meeting participant until December 2015. His exemplary advice and rigour, especially through the early stages of the Group, including its listing, is appreciated and he leaves with our gratitude and thanks. He is replaced by Chris Tyler, a seasoned CFO of a successful LSE main market listed tech company; Porvair. Chris' experience in governance and City matters is already evident through his participation at Board meetings. We welcome him as a strong addition to the Board.

It is a pleasure to be able to report these achievements in 2015. Many tests and hurdles remain before Plant Impact can declare its potential is substantially achieved but our management team have demonstrated that they are able to realize the foundation of our strategy under very financially constrained circumstances. My Board colleagues and I have full confidence that delivery will accelerate with the additional resources now in place.

David Jones

Chairman

Strategic Report

Applying the strategy

The Group continues to operate according to its 2011 strategic plan which aims to direct commercial and product development efforts toward high potential opportunities. This strategic plan has the following three pillars:

· To sell "direct to market" in territories which can be served affordably from the Group's home base in the United Kingdom. This activity is directed at developing and marketing products which improve the post-harvest quality of high-value horticultural crops such as field lettuce, root vegetables, soft fruit and tree fruit. In these markets, such as the United Kingdom, the Netherlands and various markets of the Middle East, the Group provides direct, technical "on-farm" support to the growers who use Plant Impact products and to the distributors who sell them. This element of the Group's strategy continues to develop stable customer relationships and recurring revenue, albeit with modest growth ambitions. The aim is to generate operating cash flow to cover the majority of the operating cost of the Group, both in the near and mid-term.

· To "globalise and scale" by selecting crop targets and countries in which to enter the business of supplying technical inputs to growers of large-scale world crops, such as soy, rice, maize, and wheat. The Group's strategy is to market its products for these crops via strategic partnerships with major agrochemical suppliers. The Group has identified the Brazilian soy market in partnership with Bayer CropScience as its first 'globalise and scale' objective. In the 2015 financial year, the Group also identified the West African cocoa market, in partnership with Arysta LifeScience as a meaningful additional growth opportunity. As the Group achieves the targeted growth from its entry into these world-scale crops, surplus cash will provide additional financial and organisational capacity to develop new products and technologies.

· To "accelerate innovation" by identifying and commercialising new technologies and products to bring a complete crop enhancement portfolio offering to growers of large-scale world crops. This aspect of the strategy follows the improvement in cash flow from sales into the first target crop, Brazilian soy. The Group has set in motion development and marketing plans to build a complete portfolio of new crop enhancement products for soy and wheat crops over the 2013-2018 period.

2015 business results and outlook

The Directors are very pleased to report significant strategic, operational and financial progress in the year ended 31 July 2015.

Most importantly, 2015 was an important year of sales growth for Veritas®®, the Group's flagship product to increase soy yield by improving the soy plant's capacity to fix pods and fill grains at critical growth stages. In August 2014, following a commercial test-marketing pilot in the Brazilian Cerrado region in the prior growing season, we announced a long-term agreement with Bayer CropScience, which will exclusively market Veritas®® as part of its portfolio in Brazil. In the 2014/15 soy season, Bayer CropScience expanded its sales efforts to all growing regions of that country.

In February we announced the expansion of our strong relationship with Bayer CropScience Latin America by entering into a broader agreement with Bayer CropScience AG to develop yield enhancing technologies for soy cultivation. The agreement encompasses a multi-year partnership for Plant Impact to develop, and Bayer CropScience to potentially commercialise, new products in the soy markets of the Americas,

including Brazil, the United States and Argentina. Growers in these three crucial markets are expected to cultivate more than 85 million hectares of soy in the 2015/16 cropping season, and the Americas are responsible for more than 90% of the global export trade in soybeans, soy meal and soybean oil.

This agreement granted Bayer CropScience AG exclusive first rights of commercialisation over Plant Impact's current and future pipeline of products for soybeans throughout the Americas. Bayer CropScience will make payments to Plant Impact of up to $9 million, of which $3 million (£1.9m) was paid to the Group in March of 2015 and up to $6 million will be paid against various milestones. The Group expects to bring new products to market between 2016 and 2019 though the ultimate commercial partner for these products is subject to negotiation and mutual agreement of commercial terms by Plant Impact and Bayer CropScience.

In addition to this critical new agreement in soybeans, in 2015 the Group announced, in conjunction with Arysta LifeScience Africa, India and Middle East (AIME), the launch of Banzai®™, a new product that improves cocoa yields under stressful growing conditions. Banzai®™ is based on Plant Impact's Alethea™ technology, and Arysta LifeScience will become the exclusive marketer for the product in the important cocoa-producing countries of Ivory Coast, Ghana, Cameroon, Nigeria and Togo. Together, these countries account for more than 70 percent of total global cocoa production. This is Plant Impact's first crop enhancement product for cocoa, and important commercial sales are expected in the 2016 financial year.

To continue to deliver on its core strategy, supporting both its partnership with Bayer CropScience and attracting new potential strategic partners, the Group expects to invest, over the next three years, approximately £11 million in the development of new products and technologies to improve the yield and resilience of soy and wheat production. This investment will be funded by the net proceeds of a £6.2m placing completed in March 2015, with the remainder expected to be funded by existing and internally-generated cash. It is expected that this product and technology investment programme will also underpin additional geographic expansion, particularly to the important American markets for soy and wheat production such as the United States, Canada and Argentina.

The Group made good initial technical progress against this development plan in 2015. Technical results from 2014/15 Brazilian growing season tests for "F1", our second soy crop enhancement product prototype, continue to look very promising. "S1", our third product prototype for soy, is also making very rapid progress through early formulation, glasshouse and field screening tests. Trade names for these products will be announced on commercial launch.

At the same time, our research and technical development teams continue to make progress with the Group's product prototypes for its first entry into the wheat market as field screening continues in European markets and the United States. As this product nears commercial testing phases we aim to announce additional commercial partnerships.

Finally, the Group has secured key additions to its senior management, R&D and market development teams in 2015, ensuring that we have ability to deliver on our growth commitments, but also to carefully manage the scope and expense of a significantly increased scale of business.

Outlook

The Board remains confident of the Group's strategic direction and financial prospects over the medium term and the longer term scale-up potential.

Over the 2016 financial year, substantial growth is anticipated in the Brazilian market, as Veritas®® will continue to expand its reach to soy growers in all parts of that country.

In Northern Europe, the smaller of the Group's sales regions, the Group's products continue to enjoy consistent, year-over-year use by growers of key horticultural crops. The Group has recently recruited additional senior commercial and marketing leadership for this area of the business and continues to review and expand its distribution channels. These initiatives, along with a reinvigorated product offering for turf and a selected white label product launch with a major distributor, create a modest growth expectation for FY2016 in this region.

Middle-Eastern sales are expected to continue to expand as Plant Impact extends its reach in the significant Turkish market and sees continued growth in Egypt.

The first commercial year of Banzai®® is also expected to be successful, starting in Cameroon and the Ivory Coast and exploiting the strong cocoa grower network already serviced by Arysta LifeScience in these locations.

The Group's sales and marketing plans for FY2016 include significant expansion of commercial programmes, in line with plans announced in 2015. These programmes involve further growth in Brazil and Latin American staffing to secure Veritas®® sales in Brazil and develop the product's potential in other soy growing countries. The Group will also expand its support for Banzai® in West Africa and for new distributors in Turkey and France.

Product development (R&D) investment is planned to increase in FY2016 as the Group retains additional scientific talent to deliver its previously announced, multi-year programme to develop and launch new crop enhancement products for soy and wheat. In addition, field trial programmes for key pipeline projects will expand across the Americas and in select European and West African markets.

The Group has invested considerable historical development expense and maintains intellectual property rights over a number of patents for TGT-101, an effective low-residue insecticide used for the treatment of mites, whitefly and aphids on commercially important crops such as vegetables, almonds and apples. This technology was de-prioritised relative to other products and technologies in 2012, however some development and pre-commercial work has been ongoing for the past three years. Following regulatory approval of the product by the US Environmental Protection Agency in 2012, the Group began work to secure a Californian registration. The process, started in September 2014, is continuing to generate inquiries from the Californian Department of Pesticide Registration, the latest of which were received in August 2015. The Group is moving forward with evidence to support the responses, and looks forward to commercial planning once the registration is received.

Comparable Period Data

Turnover

The Group's customers are agrochemical distributors and global strategic partners who will each typically place orders for physical volumes of the Group's products once or twice for each agricultural selling and growing season. Customers in the United States, Europe and the Middle East will typically order products between October and February and take delivery between February and May. Southern hemisphere customers (Brazil, reported in the Americas geographic segment) will place orders between March and July and typically take delivery between August and November.

Revenue relating to the Initial Fee received from Bayer Crop Sciences will be recognised over a five year term. £194k was recognised in the year, leaving £1,748k in deferred revenue. This revenue will be released to the Income Statement over the next 54 months.

1. Americas

Sales in the Americas grew materially in FY15, to £3,540k vs. £1,507k in the prior year. This was a result of the first commercial year of shipments of Veritas® to Brazil. Sales of Veritas® for use on soy in Brazil are continuing as per expectation. The Group has current and prospective distributors in Canada, Mexico and the United States, sales to whom are also reported in the Americas segment.

2. Europe

Europe had a disappointing season, with the Group's Ametros product revenue affected by the Russian boycott of European apples. Sales in the region were £698k compared to £789k in the prior year. Spanish sales were also affected by difficult growing conditions. Sales of products in France, Germany and Benelux were steady year over year.

3. Middle East

FY15 saw the beginning of a recovery of sales in the Middle East, with a modest increase in overall business from £205k to £275k. Plant Impact made its first shipments of product to a new distributor in Turkey early in the year and expanded into a new relationship with a dealer in Jordan. Both Egypt and Turkey are expected to continue to grow in FY16.

Gross Profit

Gross profit margins increased from 72% to 79% due to proportionately higher sales in FY15 to Europe and the Americas with lower margins made on sales to distributors in the Middle East. In addition, the Group booked £194k of initial fees, which have a 100% gross margin.

Expenses

Expenses increased from £2.7 million to £3.8 million, reflecting the increased headcount and associated on-costs. The Group continues to carefully control expenses, but expects to expand its cost base to fully resource growth in the Americas, in both Brazil and other markets such as Argentina, Paraguay and the United States. Further expenditure is planned for Research and Development, which was £1.4 million this year (£1.3m expensed plus £0.1 million capitalised), as the Group continues to pursue its £11 million investment plan announced in March 2015.

Share Based Payments

The Group continues to issue stock options to incentivise employees and recruit high calibre experts to its management team and functional specialities.

The value of the share options is expensed in the Group Income Statement. The value of each option granted is determined at the time of grant using the trinomial valuation method, and expensed pro-rata over the options vesting period.

A new category of stock options was issued during the year, following adoption at the Annual General Meeting in November 2014. These Value Creation Plan options are intended to incentivise key senior managers and executive directors without a heavy cash investment by the Group. Options issued under this scheme only vest under exceptionally positive circumstances. These VCP options will be valued at the time of grant using a variation of the Black Scholes model - a binomial valuation method, called the Chaffe model. The first options were issued on 31 July 2015. A significant non-cash charge will be expensed to the P&L in FY2016.

Income Tax

The Group benefits from Research and Development tax credits, in the form of a cash refund. £243k was received in the year, reflecting an under accrual of the tax credit receivable of £125k at 31 July 2014. This, plus the expected tax credit for the current year of £288k, brings the R&D tax credit to £412k.

The Group currently has an accumulated tax loss of £8.7 million. There is no income tax liability in the UK for the foreseeable future. However the Group paid Brazilian income tax of £45k in the year. The net tax position in the Group Income Statement was a credit of £368k.

The Group does not intend to recognise the Deferred Tax Asset in the current year. The asset should only be recognised if it is probable that there will be sufficient taxable profits against which the loss can be utilised. The Group is currently still in an operating loss position, and therefore the Directors consider that it is not currently probable that there would be sufficient future taxable profits to offset the £1.8 million deferred tax asset.

Receivables

Trade and Other receivables at 31 July 2015 were £1.3 million compared to £0.5 million at 31 July 2014. This balance was predominantly the first shipments of Veritas® to Brazil for the 2015/16 growing season, which were all collected by the report date.

Borrowings

The Group operated without any long-term debt during the year to 31 July 2015.

Cash Flow and Cash

The cash balance at 31 July 2015 was £7.6 million (2014: £0.5 million). Cash inflow from operating activities was £1.2 million. This included an initial fee of £1.9m, of which £1.7m was included in Deferred Revenue as at 31 July 2015. Excluding this fee, cash outflow from operating activities was £0.5 million (2014: nil). £0.3 million was spent on the purchase of assets (2014: £0.4 million). £6.3 million was raised through the sale of shares, including a stock option exercise (2014: nil).

Shares were offered for sale through a placement in February 2015 in order to finance the £11 million investment programme over the next three years.

The Group has sufficient funds to support its near- and mid-term operating requirements and has the operational flexibility to reduce or increase expenditure to respond to challenges or opportunities.

Risks and Uncertainties

The Group is subject to various risks and uncertainties which the Board and Management monitor on a regular basis. These Principal Risks and Uncertainties can be found in the Directors' Report.

On behalf of the Board

John BrubakerChief Executive Officer

Group Statement of Comprehensive Income

For the year ended 31 July 2015

The Group has no other comprehensive income or expenses. Accordingly the total comprehensive profit / (loss) for the period is equal to the profit / (loss) for the period, and no separate Group Statement of Total Recognised Gains and Losses has been shown.

Group Statement of Changes in Equity

For the year ended 31 July 2015

Other reserve

The other reserve comprises the fair value of share based payments granted in accordance with IFRS 2.

Merger reserve

The merger reserve arose on the acquisition of PI Bioscience Limited which was accounted for under UK GAAP. This business combination took place prior to 1 April 2006, the Group's date of transition to IFRS, and as such the Group has elected not to apply IFRS 3 Business Combinations.

The reclassification between merger reserve, retained earnings and share premium has been made in order to bring the Group reserves into line with the Company reserves.

Group Statement of Financial PositionAs at 31 July 2015

The Group financial statements were approved and authorised for issue by the Board of Directors on 23 October 2015 and were signed on its behalf by

D Jones, Chairman

Plant Impact plcCompany number: 5442961

Group Cash Flow StatementFor the year ended 31 July 2015

Notes to the Preliminary Results

1. Nature of Operations and General Information

The financial information for the years ended 31 July 2015 and 31 July 2014 included in this preliminary announcement, which was approved by the Board on 23 October 2015, is derived from the full Group audited financial statements for the year ended 31 July 2015 and does not constitute the statutory financial statements within the meaning of section 434 of the Companies Act 2006. The Group financial statements for the year ended 31 July 2015, on which the auditors have given an unqualified report which does not include a reference to any matter to which the auditor drew attention by way of emphasis of matter and does not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the financial statements for 2015, will be delivered to the Registrar of Companies in due course.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards, as adopted by the European Union (EU) (IFRS), this announcement does not in itself contain sufficient information to comply with IFRS.

The statutory financial statements for the year ended 31 July 2014 have been delivered to the Registrar of Companies.

The Company is a limited liability company incorporated and domiciled in England & Wales and whose shares are quoted on AIM, a market operated by The London Stock Exchange. The consolidated financial information of Plant Impact plc is presented in round thousands Sterling (£), which is also the functional currency of the Group.

2. Going Concern

The Group has demonstrated its capability in securing contractual arrangements and maintaining customer relationships which increase the probability of improving revenues.

The Group has undertaken a review of forecasts and projections, which have been prepared for the period to 31 January 2017. These indicate growth in product revenues and cash flows. The projections take into account the new business opportunities highlighted in the Strategic Report, the timing and quantum of which will affect the Group's cash requirements, which are continually monitored by the Board. The sensitivity analysis undertaken included a number of scenarios surrounding uncertainties achieving forecast product revenues and a review of the

Notes to the Preliminary Results continued

ability of the Group to manage its cost base to meet working capital and funding requirements in the event that forecast revenues and cash flows are not achieved. This review supports the Directors' conclusion that the Group should be able to operate within the level of its current cash resources and on this basis the Directors believe that the Group is well placed to manage its business risks successfully.

In summary, the Group's financial resource procedures are managed in a way that identify potential risks, are forward looking and provide sufficient time to respond to these risks while maintaining a going concern status. The Group's financial resource management includes regular reporting to the Board. This reporting includes up to date cash resource visibility and forward looking projections of the Group's financial position.

After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Group Financial Statements.

3. Segment information

The Group's operating segments have been identified based on internal management reporting information that is regularly reviewed by the chief operating decision maker.

All of the results for the year ending 31 July 2015 related to Crop Nutrients, other than £16k (2014: £21k) of costs relating to Pest Control.

The Group further monitors its business based on geography. These segments are monitored and strategic decisions are made on the basis of the segment results for the year ended 31 July 2015, which are as follows:

Notes to the Preliminary Results continued

The segment results for the Year ended 31 July 2014 are as follows:

* Other non-cash movements represent share-based payments.

All research and development is incurred by P I Bioscience Limited.

Only one customer constituted more than 10% of the Groups sales, with revenue of £3,408k (2014: two customers: £1,450k and £157k respectively).

4. Income Tax Credit

Recognised in the Group Income Statement

Notes to the Preliminary Results continued

Reconciliation of effective tax rate

Unrelieved tax losses of £8.7m (2014: £9.3m) remain available to offset against future taxable trading profits.

5. Deferred income tax

No provision has been made for deferred income tax on losses carried forward as they will only be available for offset when the Group makes sufficient taxable profits arising from the same trade. As the availability of future profits is uncertain, it has been assumed that the losses will not be recoverable in the foreseeable future.

6. Profit / (loss) per ordinary share

The profit per ordinary share is based on the profit after taxation of £119k (2014: loss £668k) and 71,207,446 (2014: 64,896,513) ordinary shares of 1 pence each, being the weighted average number of shares in issue during the period.

Notes to the Preliminary Results continued

7. Impairment Review

During the year, goodwill and development costs for Crop Nutrient and Pest Control segments were tested for impairment in accordance with IAS 36 Impairment of Assets. The recoverable amount exceeded the carrying amount of goodwill recorded. The recoverable amount has been measured on a value in use calculation.

Key Assumptions

Crop Nutrients

The Group has a number of commercially available products and continues to generate new products and new product use from its current technologies. These products are currently generating commercial revenues in Europe, the Americas, Middle East and Africa.

The impairment review for Crop Nutrient products includes management's development, review and sensitivity analysis of a financial forecast for the products and technologies which comprise the segment. This forecast includes a country-by-country review which details:

o key crops;

o the number of hectares and actual addressable market;

o Plant Impact products available for sale or planned for commercialisation and their applicability to that market; and

o the potential route to market and necessary distribution discounts.

Pest Control

The Group has invested considerable historical development expense and maintains intellectual property rights over a number of patents for TGT-101 (formerly referred to as "BugOil"), an effective, low-residue insecticide used for the treatment of mites, whitefly and aphids on commercially important crops such as vegetables, almonds and apples.

Arysta LifeScience has licensed TGT-101 in the European Union and selected Eastern European countries, in Africa and several countries of the Middle East as well as in Mexico, Japan and South Korea. Plant Impact maintains all other global commercial rights to the product and commercial freedom to operate in other markets such as the United States, South America, Asia (including China, India and Southeast Asia) and Australasia.

The Group received its first global registration for the product in the United States in April 2012. Since then, the Group has conducted some additional field studies to confirm the product's technical efficacy and develop data to be used for marketing purposes and for securing a registration in California.

Notes to the Preliminary Results continued

The Group filed the registration in California on 28 May 2014. The registration process continues to progress. Further queries were put to Plant Impact in August 2015, prompting a new round of information gathering.

The Group pursues these registrations, including the intention for further register TGT-101 in other US States, with the intent of commercialising TGT-101 under a to-be-announced trade name. Relative to the above commercial and development strategy, the impairment review for Pest Control includes management's development, review and sensitivity analysis of a financial forecast for the Group's direct sales of TGT-101 as well as potential royalties from Arysta.

Specifically, the Group has forecast:

· a revenue, margin and cost projection taking into account Plant Impact's ability to commercialise the product via direct access to agrochemical distributors in California and other US states and Brazil;

· sales growth year on year, being 2.5%; and

· royalties and milestone payments from Arysta taking into account the regulatory timeframes and forecasts of Arysta sales in markets where Arysta retains distribution rights to the product.

The forecast has been made on the basis that there are currently no sales of TGT-101 by Plant Impact. The cash inflows for the impairment review are expected sales based on available market share information. These cashflow are dependent on the Group obtaining registrations in the US and securing that market share.

A period of 10 years has been selected for cash flow estimates for both the Crop Nutrient and the Pest Control segments. This is greater than the IAS 36 requirement of five years; however this is due to the long product lifecycles in agriculture. Management believe that the forecasts developed were and are conservative.

A pre-tax discount rate of 12% was used for the value in use calculation. This discount rate is based on industry standards in the agrochemical sector.

The Directors believe that there have been no significant changes to the situation involving TGT-101, and therefore there is no basis for impairment.

8. Availability of the Financial Statements

Copies of the full statutory financial statements will be available from the registered office from 4 November 2015 and will also be available from the Group's website at www.plantimpact.com in accordance with AIM Rule 20 from 28 October 2015.

Notes to the Preliminary Results continued

9. Annual General Meeting

The Annual General Meeting will be held on 25 November 2015 between the hours of 9:00 am and 11:00am at Rothamsted Conference Centre, Room 104, Rothamsted, West Common, Harpenden, Herts, AL5 2JQ. Existing and interested investors who plan to attend are requested to register their attendance by email to investorrelations@plantimpact.com

For further information please visit: www.plantimpact.com