PPG.L Regulatory News (PPG)

25 Jul 2007 07:00

Ipso Ventures PLC25 July 2007 UNAUDITED PRELIMINARY RESULTS 2007 Ipso Ventures plc (AIM: IPS) ("Ipso" or the "Company"), the intellectualproperty commercialisation company, is pleased to announce its unauditedpreliminary results for the year ended 30 April 2007. Highlights * Framework agreement with Loughborough University * Investment in three spin-out companies: - Intelligent Wound Care Limited from Imperial College - medical devices - Therakind Limited from The School of Pharmacy - paediatric drug development - Wildkey Limited from Oxford Brookes University - educational software tools * Admission to AIM in March 2007 raising £4.5 million before expenses * Management team strengthened * Cash and short-term investments totalling £4.25 million Simon Hunt, Chairman of Ipso, said: "Ipso is now well positioned to progressother potential relationships with leading UK and European universities andother establishments where there is scope to commercialise intellectual property. "The current year has started well. We are actively in discussions with a numberof significant universities, as well as pursuing what could be its firstspin-out from Loughborough." Further information, please contact: Ipso Ventures plc: Tel: 020 7812 6042Simon Hunt, Chairman simon@ipsoventures.comNick Rodgers, Chief Executive nick@ipsoventures.com www.ipsoventures.com Rawlings Financial PR Limited Tel: 01756 770376Catriona Valentine catriona@rawlingsfinancial.co.uk www.rawlingsfinancial.co.uk CHAIRMAN AND CHIEF EXECUTIVE'S REVIEW Highlights The year to April 2007 was one of substantial progress for Ipso and one whichconfirmed our position in the university intellectual property ("IP")commercialisation sector, following the commencement of our first universityframework agreement. We raised our first round of external funding in May 2006and within the first six months created two spin-outs, one from Imperial Collegeand one from The School of Pharmacy, made an investment in a spin-out fromOxford Brookes and signed our framework agreement with Loughborough University.The Company was admitted to AIM in March 2007 and raised an additional £4.5million before expenses. Ipso is now well positioned to progress other potential relationships withleading UK and European universities and other establishments where there isscope to commercialise intellectual property and we are expanding our team tocapitalise on this. The executive team has wide experience of the IPcommercialisation process, including business creation, development andcorporate finance skills, enabling us to build strong spin-out companies, raisefurther capital and create value through profitable exits. We also place a greatdeal of emphasis on finding the right management for our spin-out companies at avery early stage in their development. Our team building capability sits at thecentre of Ipso's operations and is led by Simon Haworth. Success for Ipso will depend on its ability to foster good spin-out prospectsfrom university partners, to identify opportunities from concepts and ideasgenerated from this research base and to progress those opportunities through tovalue creation and exit. Whilst we see IPO as one possible exit route for ourspin-outs, we believe that the majority are likely to exit through trade sale,an area in which our team has a great deal of expertise and experience. Loughborough University On Ipso's admission to AIM in March 2007, our framework agreement withLoughborough became unconditional, giving us the right of first refusal toinvest in all new spin-outs set up solely with Loughborough University IP (otherthan IP relating to mobile and telecommunications research). Since March, wehave been actively working through Loughborough's strong pipeline of potentialspin-out opportunities. We are very pleased with our findings from a variety ofareas of research within the university, including renewables, environmental,nanotechnology and materials, software, security and engineering. There is a strong enterprise culture within Loughborough, generating momentumfor commercialisation and spin-out creation. Loughborough's research istypically "applied and practical", which creates more near to marketopportunities which are ideal for spin-out creation. We are working very closelywith Loughborough's highly experienced enterprise office, as well as meetingacademics across the departments, to enhance the pipeline of potential spin-outopportunities. Investments Progress in our current spin-out companies, Intelligent Wound Care Limited fromImperial College, Therakind Limited from The School of Pharmacy and WildkeyLimited from Oxford Brookes University, has been very positive. Since the yearend we have made further agreed investments in Intelligent Wound Care Limitedand Therakind Limited. Outlook The current year has started well. We are actively in discussions with a numberof significant universities as well as advancing what will be our first spin-outfrom Loughborough. Strategic review During the year, our sector has seen a number of developments which haveincreased activity and momentum considerably. Most notably, these developmentsincluded: * IP Group's securing of a further five university agreements; * the IPO of Imperial Innovations; and * Biofusion's agreement with Cardiff University. The opportunities available to Ipso, both in the UK and elsewhere, remainconsiderable and we are building very strong relationships with a view tosecuring further agreements in the near future. University partnership business We completed our first university framework agreement with Loughborough inOctober 2006, conditional on our fund raising on AIM in March 2007. Followingour admission to AIM, we have been working through Loughborough's pipeline ofover fifty projects and developing relationships with other academics to bringthrough additional opportunities. The link with Loughborough gives us access toa wide number of technologies including software, mechanical engineering,nanotechnology and materials, renewables and environmental sciences, electricalengineering and sports sciences. We see Loughborough as an excellent coreuniversity which will fit well with its other prospective university partners. Corporate developments We were very pleased to attract the support of a number of highly respectedinvestors, who have a detailed understanding of, and a high level of interestin, the IP commercialisation sector. We would like to thank them for theirsupport. In March, we recruited Dr Tim Carter as a Commercialisation Manager. He bringsstrong experience of the commercialisation process, having been involved in spinout activity at Queen Mary College, London and Imperial College, London. Financial and operational review Overview The Group's finances were strengthened with an investment of £1.5 million fromRAB Capital in May 2006 and then with the IPO on March 2007, which raised £3.75million net of expenses. A subsequent small placing raised a further £106,000.As part of the IPO, the Group's structure was changed with the insertion of anew holding company Ipso Ventures plc. Investment activities During the year the Group made three investments totalling £435,000. In May 2006, we created Intelligent Wound Care Limited to commercialisetechnology for certain medical devices being developed at Imperial College by DrDanny O'Hare. The devices are designed to measure various physiologicalparameters, which will allow a clinician to make an informed assessment of thefunctional status of tissues and organs. The devices will assist in earlyidentification and tracking of pathological conditions both during clinical/surgical procedures and following surgery. An initial investment of £270,000 wasmade in this company and a further investment of £270,000 was made after theyear end. In October 2006, working closely with The School of Pharmacy in London, wecreated Therakind Limited in response to new European legislation on PaediatricMedicines. Therakind is capitalising on the paediatric drug developmentexpertise of Ian Wong, Professor of Paediatric Medicines Research at The Schoolof Pharmacy. Paediatric medicine is an area of significant unmet need. Aninitial £120,000 investment was made, which has been followed since the year endwith a further £300,000. Also in October 2006 we invested in WildKey Limited, a spin-out from the FieldBiology department of Oxford Brookes University. WildKey provides simple to usesoftware tools for the education and leisure markets, which enable users toidentify, record and capture data on a range of handheld devices. We invested£45,000 in this company. Operating costs Operating costs increased this year as the Group's activities were significantlyexpanded in May 2006 with the initial investment from RAB Capital. We increasedour staffing level over the year to support the framework agreement withLoughborough and to provide the appropriate level of management and control asan AIM-listed company. Operating costs also included £270,000 of research anddevelopment expenses for Intelligent Wound Care Limited, which is currently awholly owned subsidiary. Cash At the year end, the Group had cash and short-term investments totalling£4,248,000. Simon Hunt, Executive ChairmanNick Rodgers, Chief Executive 25 July 2007 CONSOLIDATED INCOME STATEMENT (UNAUDITED)For the year ended 30 April 2007 2007 2006 Note £ £ Continuing operationsRevenue - -Cost of sales - - ---------- ---------- Gross profit - - Administrative expenses (647,242) (62,290)Research and development expenses (270,000) - ---------- ---------- Operating loss (917,242) (62,290)Investment revenues 49,080 7 ---------- ----------Loss before tax (868,162) (62,283)Taxation (490) - ---------- ----------Loss for the year attributable to equity holders of the parent (868,652) (62,283) ========== ==========Loss per shareBasic and diluted 4 (18)p (2)p ========== ========== CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)For the year ended 30 April 2007 Share Share Share option Other Retained capital premium reserve reserve earnings Total £ £ £ £ £ £ At 1 May 2005 - - - - - -Issue of share capital 1,177 - - - - 1,177Loss for the year - - - - (62,283) (62,283)At 30 April 2006 1,177 - - - (62,283) (61,106) ------- ------- ------- ------- ------- -------Issue of share capital 625,647 4,941,281 - (176,469) - 5,390,459Transfer of shares on reverse acquisition (1,177) - - 1,177 - -Consolidated loss for the year - - - - (868,652) (868,652)Employee share option charge - - 13,676 - - 13,676 ------- -------- ------ ------- ------- -------At 30 April 2007 625,647 4,941,281 13,676 (175,292) (930,935) 4,474,377 ======= ======== ======= ======= ======= ======= CONSOLIDATED BALANCE SHEET (UNAUDITED)At 30 April 2007 2007 2006 Note £ £ Non current assetsProperty, plant and equipment 12,146 -Investments 5 175,582 - ---------- ---------- 187,728 - ---------- ---------- Current assetsTrade and other receivables 158,256 9,089Cash and cash equivalents 4,247,641 1,074 ---------- ---------- 4,405,897 10,163 ---------- ---------- Total assets 4,593,625 10,163 ---------- ---------- Current liabilitiesTrade and other payables (118,758) (71,269) ---------- ---------- Net current assets/(liabilities) 4,287,139 (61,106) ---------- ---------- Non current liabilitiesDeferred tax liabilities (490) - ---------- ---------- Total liabilities (119,248) (71,269) ---------- ---------- Net assets/(liabilities) 4,474,377 (61,106) ========== ========== EquityShare capital 625,647 1,177Share premium 4,941,281 -Share option reserves 13,676 -Other reserve (175,292) -Retained earnings (930,935) (62,283) ---------- ---------- Equity attributable to equity holders of the parent 4,474,377 (61,106) ========== ========== CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)For the year ended 30 April 2007 2007 2006 £ £ Net cash from operating activities (1,001,446) (110) ---------- ---------- Investing activitiesInterest received 49,080 7Purchases of property, plant and equipment (15,942) -Payments to acquire investments (175,582) - ---------- ---------- Net cash (used in)/from investing activities (142,444) 7 ---------- ---------- Financing activitiesProceeds on issue of shares 6,135,995 1,177Cost of share issue (745,538) - ---------- ---------- Net cash from financing activities 5,390,457 1,177 ---------- ---------- Net increase in cash and cash equivalents 4,246,567 1,074 Cash and cash equivalents at beginning of year 1,074 - ---------- ---------- Cash and cash equivalents at end of year 4,247,641 1,074 ========== ========== NOTES TO THE ACCOUNTS 1. Basis of preparation Whilst the financial information included in this preliminary announcement hasbeen computed in accordance with International Financial Reporting Standards(IFRSs), this announcement does not itself contain sufficient information tocomply with IFRSs. The Company expects to publish full financial statements thatcomply with IFRSs in July 2007. The financial information set out in the announcement does not constitute thecompany's statutory accounts for the years ended 30 April 2007 or 2006. Thefinancial information for the year ended 30 April 2006 is derived from thestatutory accounts of Ipso Management Limited for that year which have beendelivered to the Registrar of Companies. The auditors reported on thoseaccounts; their report was unqualified and did not contain a statement under s.237(2) or (3) Companies Act 1985. The statutory accounts for the year ended 30April 2007 will be finalised on the basis of the financial information presentedby the directors in this preliminary announcement and will be delivered to theRegistrar of Companies following the company's annual general meeting. 2. Significant accounting policies The announcement is prepared on the basis of the accounting policies as statedin the previous year's financial statements of Ipso Management Limited, with theexception of those that have been changed in order to comply with the company'stransition to IFRS. No adjustments arose as a result of the transition to IFRS. The principal accounting policies adopted are set out below: Basis of consolidation On 28 February 2007, the Company became the legal parent of Ipso ManagementLimited in a share for share transaction of a reverse acquisition. Under the requirements of the Companies Act 1985, it would normally be necessaryfor the Company's consolidated accounts to follow the legal form of the businesscombination. In that case, the pre-combination results would be those of IpsoVentures plc, which would exclude Ipso Management Limited and its subsidiaryundertakings. Ipso Management Limited would then be brought into the Group from28 February 2007. However, this would portray the combination as an acquisitionof Ipso Management Limited by Ipso Ventures plc and would, in the opinion of theDirectors, fail to give a true and fair view of the substance of the businesscombination. Accordingly, the Directors have adopted reverse acquisitionaccounting as the basis of consolidation in order to give a true and fair view. As a consequence of applying reverse acquisition accounting, the results for theyear ended 30 April 2007 comprise the results of Ipso Management Limited for itsyear ended 30 April 2007, together with those of IPSO Ventures plc from the dateof acquisition. The difference arising on the reverse acquisition is recorded asan other reserve. The comparative figures are those of Ipso Management Limitedfor the period ended 30 April 2006. Business combinations Subsidiaries include all entities, including investee companies, controlled bythe Company. The acquisition of subsidiaries is accounted for using the purchase method. Thecost of the acquisition is measured at the aggregate of the fair values, at thedate of exchange, of assets given, liabilities incurred or assumed, and equityinstruments issued by the Group in exchange for control of the acquiree, plusany costs directly attributable to the business combination. The acquiree'sidentifiable assets, liabilities and contingent liabilities that meet theconditions for recognition under IFRS 3 are recognised at their fair value atthe acquisition date, except for non-current assets (or disposal Groups) thatare classified as held for sale in accordance with IFRS 5 'Non-Current AssetsHeld for Sale and Discontinued Operations', which are recognised and measured atfair value less costs to sell. Any goodwill arising on acquisition is recognised as an asset and initiallymeasured at cost, being the excess of the cost of the business combination overthe Group's interest in the net fair value of the identifiable assets,liabilities and contingent liabilities recognised. If, after reassessment, theGroup's interest in the net fair value of the acquiree's identifiable assets,liabilities and contingent liabilities exceeds the cost of the businesscombination, the excess is recognised immediately in profit or loss. The interest of minority shareholders in the acquiree is initially measured atthe minority's proportion of the net fair value of the assets, liabilities andcontingent liabilities recognised. Investments in associates An associate is an entity over which the Group is in a position to exercisesignificant influence, but not control or joint control, through participationin the financial and operating policy decisions of the investee. Significantinfluence is the power to participate in the financial and operating policydecisions of the investee but is not control or joint control over thosepolicies. The Group's equity investments are held with a view to realisation of capitalgains and for this reason the Directors have designated such investments inassociates to be measured at fair value through profit or loss in accordancewith IAS 39 'Financial Investments: Recognition and Measurement'. Other investments Investments over which the Group does not exercise control or significantinfluence are recognised at fair value. Operating loss Operating loss is stated before investment income and finance costs. Retirement benefit costs Payments to defined contribution retirement benefit schemes are charged as anexpense as they fall due. Taxation The tax expense represents the sum of the tax currently payable and deferredtax. The tax currently payable is based on taxable profit for the year. Taxableprofit differs from net profit as reported in the Income statement because itexcludes items of income or expense that are taxable or deductible in otheryears and it further excludes items that are never taxable or deductible. TheGroup's liability for current tax is calculated using tax rates that have beenenacted or substantively enacted by the balance sheet date. Deferred tax is the tax expected to be payable or recoverable on differencesbetween the carrying amounts of assets and liabilities in the financialstatements and the corresponding tax bases used in the computation of taxableprofit, and is accounted for using the balance sheet liability method. Deferredtax liabilities are generally recognised for all taxable temporary differencesand deferred tax assets are recognised to the extent that it is probable thattaxable profits will be available against which deductible temporary differencescan be utilised. Such assets and liabilities are not recognised if the temporarydifference arises from the initial recognition of goodwill or from the initialrecognition (other than in a business combination) of other assets andliabilities in a transaction that affects neither the tax profit nor theaccounting profit. Deferred tax liabilities are recognised for taxable temporary differencesarising on investments in subsidiaries and associates, except where the Group isable to control the reversal of the temporary difference and it is probable thatthe temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheetdate and reduced to the extent that it is no longer probable that sufficienttaxable profits will be available to allow all or part of the asset to berecovered. Deferred tax is calculated at the tax rates that are expected to apply in theperiod when the liability is settled or the asset is realised. Deferred tax ischarged or credited in the Income statement, except when it relates to itemscharged or credited directly to equity, in which case the deferred tax is alsodealt with in equity. Deferred tax assets and liabilities are offset when there is a legallyenforceable right to set off current tax assets against current tax liabilitiesand when they relate to income taxes levied by the same taxation authority andthe Group intends to settle its current tax assets and liabilities on a netbasis. Property, plant and equipment Fixtures and equipment are stated at cost less accumulated depreciation and anyrecognised impairment loss. Depreciation is charged so as to write off the cost or valuation of assets overtheir estimated useful lives, using the straight-line method, on the followingbases: Computer equipment 3 years Fixtures and equipment 5 years Internally-generated intangible assets - research and development expenditure Expenditure on research activities is recognised as an expense in the period inwhich it is incurred. An internally-generated intangible asset arising from the Group's research anddevelopment activities is recognised only if all of the following conditions aremet: - _ an asset is created that can be identified (such as software and newprocesses);- _ it is probable that the asset created will generate future economicbenefits; and- _ the development cost of the asset can be measured reliably. Internally-generated intangible assets are amortised on a straight-line basisover their useful lives. Where no internally-generated intangible asset can berecognised, development expenditure is recognised as an expense in the period inwhich it is incurred. Impairment of tangible and intangible assets excluding goodwill At each balance sheet date, the Group reviews the carrying amounts of itstangible and intangible assets to determine whether there is any indication thatthose assets have suffered an impairment loss. If any such indication exists,the recoverable amount of the asset is estimated in order to determine theextent of the impairment loss (if any). Where the asset does not generate cashflows that are independent from other assets, the Group estimates therecoverable amount of the cash-generating unit to which the asset belongs. Anintangible asset with an indefinite useful life is tested for impairmentannually and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs to sell and value inuse. In assessing value in use, the estimated future cash flows are discountedto their present value using a pre-tax discount rate that reflects currentmarket assessments of the time value of money and the risks specific to theasset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated tobe less than its carrying amount, the carrying amount of the asset(cash-generating unit) is reduced to its recoverable amount. An impairment lossis recognised as an expense immediately, unless the relevant asset is carried ata revalued amount, in which case the impairment loss is treated as a revaluationdecrease. Where an impairment loss subsequently reverses, the carrying amount of the asset(cash-generating unit) is increased to the revised estimate of its recoverableamount, but so that the increased carrying amount does not exceed the carryingamount that would have been determined had no impairment loss been recognisedfor the asset (cash-generating unit) in prior years. A reversal of an impairmentloss is recognised as income immediately, unless the relevant asset is carriedat a revalued amount, in which case the reversal of the impairment loss istreated as a revaluation increase. Financial instruments Financial assets and financial liabilities are recognised in the Group's Balancesheet when the Group becomes a party to the contractual provisions of theinstrument. Trade receivables Trade receivables are measured at initial recognition at fair value, and aresubsequently measured at amortised cost using the effective interest ratemethod. Appropriate allowances for estimated irrecoverable amounts arerecognised in profit or loss when there is objective evidence that the asset isimpaired. The allowance recognised is measured as the difference between theasset's carrying amount and the present value of estimated future cash flowsdiscounted at the effective interest rate computed at initial recognition. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, and othershort-term highly liquid investments that are readily convertible to a knownamount of cash and are subject to an insignificant risk of changes in value. Financial liabilities and equity Financial liabilities and equity instruments are classified according to thesubstance of the contractual arrangements entered into. An equity instrument isany contract that evidences a residual interest in the assets of the Group afterdeducting all of its liabilities. Trade payables Trade payables are initially measured at fair value, and are subsequentlymeasured at amortised cost, using the effective interest rate method. Equity instruments Equity instruments issued by the Company are recorded at the proceeds received,net of direct issue costs. Provisions Provisions are recognised when the Group has a present obligation as a result ofa past event, and it is probable that the Group will be required to settle thatobligation. Provisions are measured at the Directors' best estimate of theexpenditure required to settle the obligation at the balance sheet date, and arediscounted to present value where the effect is material. Share-based payments The Group has applied the requirements of IFRS 2 'Share-based Payment'. The Group issues equity-settled share-based payments to certain employees.Equity-settled share-based payments are measured at fair value at the date ofgrant. The fair value determined at the grant date of the equity-settledshare-based payments is expensed on a straight-line basis over the vestingperiod, based on the Group's estimate of shares that will eventually vest andadjusted for the effect of non market-based vesting conditions. Fair value is measured by use of the Black Scholes model. 3. Business segments University partnership Intelligent business Wound Care Consolidated 2007 2007 2007 £ £ £Income statementAdministrative expenses (633,192) (14,050) (647,242)Research and development expenses - (270,000) (270,000) --------- --------- ---------Operating loss (633,192) (284,050) (917,242)Finance income - interest receivable 49,080 - 49,080 --------- --------- ---------Loss before taxation (584,112) (284,050) (868,162)Tax (490) - (490) --------- --------- ---------Loss attributable to equity holders (584,602) (284,050) (868,652) --------- --------- --------- Balance sheetAssets 4,593,625 - 4,593,625Liabilities (106,198) (13,050) (119,248) --------- --------- ---------Net assets 4,487,427 (13,050) 4,474,377 --------- --------- --------- Other segment itemsCapital expenditure 15,942 - 15,942Depreciation 3,796 - 3,796 University Intelligent Consolidated partnership Wound Care business 2006 2006 2006 £ £ £Income statementAdministrative expenses (62,290) - (62,290)Research and development expenses - - - --------- --------- ---------Operating loss (62,290) - (62,290) ---------- --- ----------Finance income - interest receivable 7 - 7 --------- --------- ---------Loss before taxation (62,283) - (62,283)Tax - - - --------- --------- ---------Loss attributable to equity holders (62,283) - (62,283) --------- --------- --------- Balance sheetAssets 10,163 - 10,163Liabilities (71,269) - (71,269) --------- --------- ---------Net liabilities (61,106) - (61,106) --------- --------- --------- Other segment itemsCapital expenditure - - -Depreciation - - - 4. Loss per share The basic and diluted loss per ordinary share is based on losses attributable toordinary shareholders for the year of £868,652 (2006: £62,283). The basic lossper share is based on the weighted average number of ordinary shares of4,906,679 in issue during the year (2006: 3,113,772). 5. Investments - available for sale investments (fair value) Unquoted companies £Therakind Limited 129,962WildKey Limited 45,620 ---------- 175,582 ---------- 6. Post balance sheet events The Group has agreed to invest a further £300,000 in Therakind Limited. TheGroup has invested a further £270,000 in Intelligent Wound Care Limited. 7. Availability of statutory accounts Copies of the full statutory accounts will be available from the registeredoffice at 62 - 65 Chandos Place, Covent Garden, London WC2N 4LP from Monday 13August 2007 and will also be available from the website at www.ipsoventures.com. 8. Annual General Meeting The Annual General Meeting will be held at the offices of Memery Crystal 44Southampton Buildings, London WC2A 1AP on 10 September 2007 at 12 noon. This information is provided by RNS The company news service from the London Stock Exchange