Last checked at 24 Jun 2008 07:00
PRESS RELEASE
For immediate release 24th June, 2008
RESULTS FOR THE YEAR ENDED 31st DECEMBER 2007 HIGHLIGHTS * Commercialisation * + Grants of patent for TMT1 in Europe and USA. + Earliest patents to 2021 with broad claims across isobaric tandem mass tagging. + TMT‚® license with Thermo Fisher Scientific Inc. - a major milestone including signature fees, contract manufacturing payments, royalties and sales milestones. + Proteome Sciences retains high value/high volume custom TMTcalibrator¢â€ž¢ and TMT Reference Materials¢â€ž¢. + Major TMT‚® product launch in June at ASMS, Denver by Thermo Fisher. + Global leader in chemoproteomics, Cellzome, adopts TMT‚®. + ProteoSHOP‚® revenue increased 388% in 2007. + Conversion of stroke research licence into full licences slower but in progress. + Intronn Inc. assets sold to VIRxSYS Corp in all stock transaction. Proteome Sciences retains its 43% shareholding. Intronn to participate in upside value of VIRxSYS through preferred stock. + ISO9001 process to be completed Q3, 2008. * Financial * Reduced loss for period ‚£5.25m (2006 : ‚£5.64m). * Unaudited revenue ‚£0.81m for 5 months to May, 2008. * Cash used in operations ‚£4.17m (2006 : ‚£4.96m). * Cash balance ‚£0.53m (2006 : ‚£0.30m). * Additional ‚£2m working capital from increased loan facility. * Consistent and predictable cash burn * Current Outlook * Outstanding prospects for isobaric tandem mass tagging and TMT‚®. * Delivering rapid biomarker and assay solutions to meet needs of pharma and diagnostics. * Strong interest and enquiries for ProteoSHOP‚®. * Proprietary biomarkers benefiting from `in-house' development. * Sustainable and rising revenue from all activities.
Commenting on these results, Christopher Pearce, Chief Executive of Proteome Sciences, said:
"A number of major milestones have been achieved, the most important of which are the grant of the TMT1 patents in Europe and the USA with broad claims across the field of isobaric mass tagging and the exclusive license agreement with Thermo Fisher Scientific for TMT‚®.
These have crystallised Proteome Sciences' position as global leaders in chemical tagging with mass spectrometry and, at the same time, we have established ourselves at the forefront of biomarker discovery, validation and qualification and rapid assay development.
The workflows and tools that have been developed transforms the time and costs in biomarker and assay development, reducing it from years to a number of weeks. We consider that these new solutions will have a profound effect across drug development, disease management and the advances in personalised medicine.
We are most encouraged by the emerging profile and importance of biomarkers and we strongly believe that we are exceptionally placed to capitalise on this through rapid revenue growth from all aspects of our business; the ProteoSHOP‚® services division, TMT‚® and our growing portfolio of proprietary disease biomarkers."
ENDS
Attached: Full text of Chairman's statement, consolidated profit and loss account, consolidated balance sheet, consolidated cashflow statement and notes to the financial information.
For further information please contact:
Proteome Sciences plc
www.proteomics.com Tel: +44 (0)1932 865065
Christopher Pearce, Chief Executive Email: christopher.pearce@proteomics.com
James Malthouse, Finance Director Email: james.malthouse@proteomics.com
Public Relations
IKON Associates Coast Communications
Adrian Shaw Matt Baldwin
Tel: +44 (0)1483 535102 Tel: +44 (0)1233 503200
Mobile: +44 (0)797 9900733 Mobile: +44 (0)7930 439739
Email: adrian@ikonassociates.com Email: matt@coastcommunications.co.uk
Nominated Adviser
Landsbanki Securities (UK) Limited Tel: +44 (0)20 7426 9000
Shaun DobsonClaes SpĴngNotes to Editors:About Proteome Sciences:
Proteome Sciences plc is a global leader in applied proteomics, using high sensitivity proprietary techniques to detect and characterise differentially expressed proteins in diseases for diagnostic, prognostic and therapeutic applications.
ProteoSHOP‚® provides integrated proteomic services for biomarker discovery, validation and measurement in clinical trials and in vitro diagnostics. Key features include the proprietary isobaric tandem mass tag technology TMT‚® for accurate and reliable biomarker quantification and the ability to rapidly develop highly reproducible quantitative biomarker assays.
The main focus of its research addresses neurological, oncology and cardiovascular conditions and has discovered blood biomarkers in stroke, brain damage, solid organ transplant rejection and Alzheimer's disease. Proteome Sciences is based in Cobham, UK with facilities in London and Frankfurt.
Dear Shareholder,
The year ended 31st December 2007 has been successful and productive for our Company and the momentum that was established then has carried over and increased in 2008, with further major new technical and commercial milestones being attained.
The profile of biomarkers has risen dramatically over the last five years as they increasingly become an essential requirement for the development of new diagnostic and prognostic assays and for determining the efficacy and safety of new drugs. The discovery and validation of biomarkers, however, has continued to be a highly time consuming and costly exercise.
Proteome Sciences has developed a range of ground breaking isobaric mass tagging reagents, TMT‚®, with workflows that are transforming the discovery, validation and routine measurement of protein biomarkers by mass spectrometry. Of equal importance, the ProteoSHOP‚® TMT‚® workflows also provide novel time and cost-effective ways to overcome the challenges of immunoassay development, radically reducing the development time for biomarker assays from several years down to a matter of weeks. These features address the increasing requirements of the global regulatory system, led by the FDA in the USA and the EMEA in Europe, to use biomarkers and biomarker data to accelerate and improve drug development and to support the advances in personalised medicine.
In May and November 2007, patents for isobaric tandem mass tagging (TMT1) were granted in Europe and the USA respectively, with the earliest patents extending to 2021. These provide broad claims across the field of isobaric tandem mass tagging and the ability to exploit TMT‚® in the major global jurisdictions, both as a set of products in their own right and also for third party licences for the manufacture or use of any type of isobaric tandem mass tags. In April 2008 Proteome Sciences completed the commercialisation of TMT‚® through an exclusive license agreement with Thermo Fisher Scientific Inc., a global leader supplying scientific equipment and reagents. Proteome Sciences retained the use of TMT‚® for its own research as well as custom labelling and assay development under its ProteoSHOP‚® services division.
As a result of the increased marketing emphasis, ProteoSHOP‚® services division revenue experienced a considerable uplift in 2007. This will be further enhanced by TMT Reference Materials¢â€ž¢ and TMTcalibrator¢â€ž¢. Such TMT‚® applications are high value, high volume revenue applications that will address and open up substantial new markets and opportunities. Feedback from the pharma and life sciences industry has been very positive and this has been reflected in a strong growth in revenue. This has continued into 2008 in which unaudited revenue in the five months to 31st May 2008 was ‚£805,000, including income from the TMT‚® license agreement.
The combination of the developments highlighted above transforms the prospects for Proteome Sciences and from which we expect sustainable and rising revenue from all areas of our activities.
In 2007, over 70 patents were granted across 13 patent families including TMT‚®, Sensitizer‚®, stroke, organ transplant rejection and cancer and new patent applications have been filed for mass labels, stroke, Alzheimer's disease, renal transplant, brain damage and Huntington's disease.
Reagents
Whilst waiting for the European and US patent applications for TMT‚® isobaric tandem mass tagging to be granted in 2007, Proteome Sciences was able to use that time to develop and optimise the chemical synthesis processes for the full range of TMT‚® isobaric tandem mass tags (TMTzero¢â€ž¢, TMTduplex¢â€ž¢ and TMTsixplex¢â€ž¢). With this process completed and in anticipation of the impending outlicense of TMT‚® products, substantial amounts of TMT‚® reagents were produced in order to enable the licensee to have materials available for an early product launch.
As a consequence, Thermo Fisher Scientific was able to have TMT‚® products available at the ASMS meeting for mass spectrometry in Denver, USA, the global showpiece event in mass spectrometry, less than eight weeks after signing the exclusive licence agreement. The high profile launch started with a well attended user meeting and was accompanied and endorsed by eight scientific posters/ papers presented by Proteome Sciences and a number of global scientific leaders in the field, confirming the utility and performance of TMT‚® isobaric mass tags across a broad range of different applications. Thermo Fisher started shipping TMT‚® products in June.
Under the terms of the license, Proteome Sciences will manufacture the TMT reagents exclusively for Thermo Fisher Scientific, which will market and sell them globally through their product lines. Proteome Sciences receives a mixture of signature fees, contract manufacturing payments and royalties on sales with additional sales milestone payments from the license. The earliest TMT‚® patents extend to 2021 and the license enables Thermo Fisher Scientific to provide third-party commercial licenses for use of any type of isobaric tandem mass tags. Proteome Sciences expects strong double-digit growth in the market for isobaric mass tags products over the next five years.
Ahead of completion of the TMT‚® license agreement in March, a letter of opposition was lodged at the European Patent Office (EPO) to Proteome Sciences issued, granted and enforceable patent for TMT‚® in Europe. Before grant, the European TMT‚® patent went through an extensive examination process and was subjected to anonymous `third party observations' at that time. These were dismissed .
Following thorough review by Proteome Sciences and its patent counsel, it was confirmed that the opposition does not raise any grounds of objection that prejudice the validity of the patent. A highly robust and comprehensive response was submitted to the EPO in June 2008.
This does not in any way affect the existing status of the TMT‚® patent in Europe which is issued and enforceable and which means that any manufacture or use of products utilising isobaric tandem mass tags that come under the broader scope of the TMT‚® patent may need licenses from Proteome Sciences.
Having recognised the improvements in speed and reproducibility of programmes with TMT‚®sixplex, Cellzome AG from Heidelberg, Germany, one of the global leaders in protein-drug and protein-protein interactions adopted TMT‚® for its chemo-proteomics platform in April 2008. This moves TMT‚® into new high value applications in drug discovery/development, an area highly complementary to the initial applications envisaged in biomarker discovery, validation and assay development.
TMT‚® products provide a patented technology that delivers fast, flexible and cost-efficient workflows using mass spectrometry. The future for TMT‚® looks outstanding.
ProteoSHOP‚®
The ProteoSHOP‚® services division experienced a considerable improvement in revenue and activity in 2007, with a near fourfold increase in turnover. Continued progress is expected for the future.
The increased emphasis on marketing ProteoSHOP‚® has been a significant factor behind this success, and this is very much a continuing process. The introduction of the full range of TMT‚® isobaric tandem mass tags has been responsible for stimulating considerable further interest and opportunities.
Under the license agreement with Thermo Fisher Scientific, Proteome Sciences retains the use of TMT‚® for its own research as well as custom labelling and assay development for its customers using TMTcalibrator¢â€ž¢ and TMT Reference Materials¢â€ž¢. By relying on Thermo Fisher's comprehensive sales channels for volume catalogue products, Proteome Sciences can focus on custom labelling services and products. Considerable demand is projected for these high-value/ high volume bespoke applications and as such they should substantially expand the size and market value of isobaric mass tagging technology, services and applications.
Two new products announced in 2007, TMTcalibrator¢â€ž¢ and TMT Reference Materials ¢â€ž¢, have been developed with specific applications for key areas of unmet need:
TMTcalibrator¢â€ž¢ enables the absolute quantitation of multiple biomarker proteins in a single experiment by providing multipoint calibration curves for all proteins of interest.
TMT Reference Materials¢â€ž¢ allow the accurate relative quantitation of hundreds to thousands of proteins in large and complex biomarker programmes.
The effects of these will be far reaching commercially and in research.
Clinical laboratories typically use reference materials to calibrate and certify assays. Until now, proteomics lacked the materials to benchmark performance. TMT Reference Materials¢â€ž¢ are the solution and provide a defined proteome reference for blood, plasma, urine, tissue and other samples. Using this as a control sample, it is now possible for scientists to have quality control and share and replicate their results worldwide. TMT Reference Materials¢â€ž¢ will significantly speed up discovery and development of biomarkers. We are developing a range of universal standards using TMT Reference Materials¢â€ž¢ and also offer production of custom reference standards for individual customers under the ProteoSHOP‚® services division.
Historically, the cost and timescales for developing multiplex biomarker assays in drug development has been a barrier to widespread adoption in the pharmaceutical industry. Antibody-based approaches typically cost between $1m and $3m per protein and take up to 18 to 36 months to implement. Using TMT‚® in combination with other ProteoSHOP‚® technology, multiplex assays can be rapidly and inexpensively developed in several months. Here again, Proteome Sciences is providing solutions to a major and growing unmet need that opens up substantial new revenue and market opportunities.
ProteoSHOP‚® has experienced high levels of interest and enquiries in 2008, in particular from the meetings/conferences attended in Philadelphia, Manchester, Cyprus, Denver and San Diego and this is expected to significantly increase orders for our services division.
As a consequence of the high levels of activity at our Frankfurt facility, the completion of the ISO 9001 certification process is expected in the third quarter.
Biomarkers
Biomarkers are increasingly becoming an essential requirement for the development of novel diagnostic and prognostic assays and for determining the efficacy and safety of new drugs. The goal of our proteomics research programmes has been to discover and validate differentially expressed protein biomarkers in major human diseases for exactly these purposes. The key role that biomarkers have established is being driven by the ever growing requirement of the global regulatory systems led by the FDA in the USA, to use biomarkers and biomarker data not only for diagnostic applications, but to accelerate and improve drug development and to support the advances in personalised medicine.
Proteome Sciences continues to be at the forefront in the development and application of its ProteoSHOP‚® workflows to deliver rapid biomarker discovery, validation and assay solutions for its customers and its own internal research activities. Our proprietary programmes have been amongst the first to benefit from the development of TMT‚® workflows and their integration with other complementary technologies. This accelerates biomarker discovery and validation, and allows us to re-visit existing samples and data with much greater speed and coverage. This can be seen from the eight scientific abstracts/posters presented recently at ASMS covering a broad spread of different applications from both our internal data and results and those from the programmes of a number of global scientific leaders in the field with whom we have collaborations.
The improvements offered by TMT‚® are best illustrated in stroke. The discovery and validation work in our programmes has spanned a ten year period with around 20 biomarkers identified. Towards the end of 2007, one of the original sample sets was re-visited using TMT‚® and other ProteoSHOP‚® workflows. In under ten weeks we were able to reproduce the great majority of differentially expressed proteins previously discovered, confirming their utility, but at the same time considerably increasing the total number of differentially expressed proteins visualised using our state of the art discovery tools and workflows.
Extensive validation of our stroke marker panels has been undertaken and this has resulted in four research licenses for high throughput stroke with global leaders in clinical diagnostics. Our research continues to generate new data and biomarkers to enhance the IP position and to further improve the performance of the stroke panel for the early detection of stroke and the management and treatment of the condition. Progress is being made by the licensees, albeit at a slower pace than we would like, and we remain confident that the research licensees previously announced should convert into full-commercial licenses as the testing and integration processes come to completion in 2008.
In 2007 we decided to concentrate our own biomarker programmes primarily on neurological/ neurodegenerative conditions where strong additional results have flowed through from our proprietary research, in particular for brain damage and Alzheimer's disease. Considerable media attention has focused on the subsequent data following the high profile publication on Alzheimer's disease (AD) in the scientific journal Brain. The 36 differentially expressed proteins discovered in blood are being evaluated for their utility for diagnosis and monitoring AD.
Using post-mortem CSF as a model of massive brain injury and cell death, results were published from our collaborative biomarker research programme in CSF that identified 299 proteins, of which 172 were not previously known to be present in CSF. The identification of these proteins, when combined with validation in plasma, demonstrates the power of this approach to discover brain injury biomarkers in blood and the potential to measure those in diagnostic tests which address a range of different neurodegenerative disorders and the way to utilise and test these biomarkers for novel diagnostic, prognostic and therapeutic applications with our ProteoSHOP‚® toolbox.
Intronn Inc. / Veri-Q Inc.
As previously notified to shareholders last September, VIRxSYS Corporation acquired the core technology and assets of Intronn Inc. (a company in which Proteome Sciences retains a 43 per cent shareholding) in exchange for the issuance of preference stock in VIRxSYS.
The combination of the technologies is highly synergistic with SMaRT¢â€ž¢ providing a strong pipeline of RNA products for the VIRxSYS lentiviral vector delivery platform. By virtue of an all stock transaction, both companies directly participate from the considerable upside potential of the combined platforms and remove duplication of costs and effort.
Further results are expected in 2008 from the Phase II trials in HIV for VRX496, VIRxSYS' lead application using lentiviral vectors. Shareholders will be appraised of significant developments at VIRxSYS.
The programme to develop further antibodies against the deprotecting groups at Veri-Q has been completed. These have been lodged at the American Type Culture Collection for secure storage, and a marketing plan and strategy to exploit the commercial value from deprotection impurities in synthetic oligonucleotides is under preparation. Completion of antibody production was later than anticipated, but it is timely given the increased focus on synthetic nucleic acid as therapeutic agents in RNAi and antisense drugs, and as pharmacogenonic assays are being developed for widespread use. With antibodies secured and the marketing strategy refocused, Veri-Q is ideally placed to leverage value from these developments.
Results
The financial results for the twelve month period ended 31st December 2007 show a loss before taxation of ‚£5,464,433 compared with ‚£6,007,799 in 2006. Non cash costs, (depreciation and a charge under IFRS 2 for share-based payment costs) were ‚£759,800 against ‚£754,343 in 2006.
The loss on ordinary activities after taxation for the twelve month period ended 31st December 2007 was ‚£5,252,029 (2006 : ‚£5,637,690). The cash used in operations for the year was ‚£4,166,151 (2006 : ‚£4,460,913).
At the year end, cash in hand and held on deposit stood at ‚£530,195 (2006 : ‚£ 304,225).
The cash spend in 2007 has remained consistent with that of previous years and this pattern is expected to continue in 2008. The licences announced and the commercialisation and grant income anticipated should provide significant cash inflows for the Company and have a positive effect on its financial requirements. A loan facility of up to ‚£6 million has been made available to the Company from C.D.J. Pearce, the Chief Executive.
The directors have assumed that the timing of the cash inflows from the anticipated commercial income will be appropriate to meet the cash requirements of the business; however, due to the current rate of cash expenditure, the timing of receipt of the aforementioned cash inflows remains important and therefore there can be no certainty regarding the availability of funding for the next 12 months.
Having regard to the assumptions made in respect of the timing of receipt of the anticipated commercial income, combined with grant income, and other cash inflows, including the loan facility of up to ‚£6 million made available by C.D.J. Pearce, the directors continue to adopt the going concern basis in preparing the accounts, and accordingly the financial statements do not contain any adjustments that would result if sufficient commercial income were not to be received on a timely basis.
In relation to the additional loan facility from C.D.J. Pearce, the Directors of the Company, (with the exception of C.D.J. Pearce who, in view of his interest in the transaction, has taken no part in the consideration thereof), having consulted with its nominated adviser, consider that the terms of this transaction are fair and reasonable insofar as shareholders are concerned.
As previously announced, the Company filed a claim on 29th December 2005 in the District Court of Frankfurt am Main ("the Court") against Sanofi-Aventis Deutschland GmbH ("Sanofi-Aventis") under which it is seeking damages of up to ¢â€š¬30 million for, amongst other things, the breach of certain warranties provided by Sanofi-Aventis at the time of the acquisition of Xzillion Proteomics GmbH & Co KG (now Proteome Sciences R&D GmbH & Co KG) on 4th July 2002. Having filed for a declatory judgement that was initially dismissed, an appeal has been lodged and has been set down for a hearing in June 2009. Full provision of all costs arising in 2007 in connection with the claim has been made in the 2007 financial statements. Whilst it is not possible to predict the outcome of this matter, the Directors are continuing to pursue this action vigorously and will keep shareholders informed of material developments.
Current Outlook
The exclusive license agreement with Thermo Fisher Scientific Inc. for TMT‚® products in April marked a major milestone in the Company's development. The agreement provides Proteome Sciences with a strong cash flow, which transforms the prospects with sustainable, rising revenue from all areas of our activities. This confirms the value and importance of isobaric tandem mass tagging and allows Proteome Sciences to concentrate its resources on its proprietary biomarker programmes, on ProteoSHOP‚® with high value, high volume custom labeling with TMTcalibrator¢â€ž¢ and TMT Reference Materials¢â€ž¢ and from the development of further tagging reagents and applications with its licensee.
TMT‚® workflows deliver rapid biomarker and assay solutions seamlessly from discovery, through validation to clinical development. These will accelerate the utility and application of biomarkers in drug development and diagnostics to make personalised medicine a reality.
This provides the pharmaceutical and life sciences industry with a much neededsolution to the long standing challenges in biomarker validation andqualification and, against this background, the prospects for our business lookmost encouraging.Steve HarrisChairman 24th June, 2008 Year ended Year ended 31st December 2007 31st December 2006 ‚£ ‚£ Continuing operations Revenue 265,593 68,469 Cost of sales (112,976) (47,928) __________ __________ Gross profit 152,617 20,541 Administrative expenses (5,449,722) (5,754,536) Share of results of associates 123,928 (282,002) __________ __________ Operating loss (5,173,177) (6,015,997) Investment revenues 10,839 44,835 Finance costs (302,095) (36,637) __________ __________ Loss before taxation (5,464,433) (6,007,799) Tax 212,404 370,109 __________ __________ Loss for the period from continuing (5,252,029) (5,637,690) operations __________ __________ Attributed to shareholders of the (5,252,029) (5,637,690) company __________ __________ Loss per share Basic and diluted (3.99p) (4.29p) __________ __________
Unaudited consolidated statement of recognised income and expense
For the year ended 31st December 2007
Year ended Year ended 31st December 2007 31st December 2006 ‚£ ‚£ Exchange differences on translation of 30,773 (93,375) foreign operations __________ __________ Net income/(expense) recognised 30,773 (93,375) directly in equity Loss for the period (5,252,029) (5,637,690) __________ __________ Total recognised income and expense for (5,221,256) (5,730,065) the period __________ __________ 2007 2006 ‚£ ‚£ Non-current assets Goodwill 4,218,241 4,218,241 Property, plant and equipment 438,413 546,509 Interest in associates 777,577 652,813 Other investments - - __________ __________ 5,434,231 5,417,563 __________ __________ Current assets Inventories 106,529 - Trade and other receivables 562,410 673,998 Cash and cash equivalents 530,195 304,225 __________ __________ 1,199,134 978,223 __________ __________ Total assets 6,633,365 6,395,786 __________ __________ Current liabilities Trade and other payables (1,097,784) (984,036) Current tax liabilities (42,673) (34,762) Short-term borrowings (5,936,599) (1,634,637) Short-term provisions (1,235,039) (648,000) Deferred grant income (261,663) (268,855) __________ __________ (8,573,758) (3,570,290) __________ __________ Net current liabilities (7,374,624) (2,592,067) __________ __________ Non-current liabilities Deferred grant income (188,043) (188,043) Long-term provisions (36,531) (49,282) __________ __________ (224,574) (237,325) __________ __________ Total liabilities (8,798,332) (3,807,615) __________ __________ Net (liabilities)/assets (2,164,967) 2,588,171 __________ __________ Equity Share capital 1,314,654 1,314,654 Share premium account 29,150,563 29,150,563 Equity reserve 1,834,832 1,795,971 Other reserve 10,755,000 10,755,000 Translation reserve (61,602) (92,375) Retained loss (45,158,414) (40,335,642) __________ __________ Total (deficit)/equity (2,164,967) 2,588,171 __________ __________ Group Group Year ended Year ended 31st December 31st December 2007 2006 ‚£ ‚£ Cash flows from operating activities Cash used in operations (4,166,151) (4,460,913) Interest paid (302,094) (36,637) Tax refunded 375,010 891,968 __________ __________
Net cash outflow from operating (4,093,235) (3,605,582) activities
__________ __________ Cash flows from investing activities Purchases of property, plant and (23,277) (357,411) equipment Interest received 10,839 44,735 __________ __________ Net cash outflow from investing (12,438) (312,576) activities __________ __________ Financing activities Proceeds on issue of shares - 4,934 New loans raised 4,301,962 1,634,637 __________ __________ Net cash from financing activities 4,301,962 1,639,571 __________ __________ Net increase/(decrease) in cash and 196,289 (2,278,587) cash equivalents Cash and cash equivalents at 304,225 2,587,155 beginning of period Effect of foreign exchange rate 29,681 (4,343) changes __________ __________ Cash and cash equivalents at end of 530,195 304,225 period __________ __________
1. The preceding financial information does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The financial information for the year to 31st December 2006 (the comparative financial information) is extracted from the statutory accounts for that year but differs from the information reported in those financial statements as the comparative financial information has been restated in respect of conversion to IFRS. These accounts, upon which the auditors issued an unqualified opinion, and which did not contain any statement under Section 237(2) or (3) of the Companies Act 1985, have been delivered to the Registrar of Companies.
The statutory accounts for the year ended 31st December 2007 will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be posted to shareholders on the 27th June, 2008. After that time, they will also be available at the Company's registered office: Coveham House, Downside Bridge Road, Cobham, Surrey KT11 3EP.
2. As set out in the results section of the Chairman's Statement in this preliminary announcement, a material uncertainty is identified regarding the company's ability to continue as a going concern. Whilst it is anticipated that the company will receive an unqualified audit report for the year ended 31st December, 2007, the audit report will contain the following additional paragraph:
"Emphasis of matter - Going Concern
Without qualifying our opinion, we draw attention to the disclosures made in note 3 of the financial statements concerning the Group's ability to continue as a going concern. The Group incurred a net loss of ‚£5,252,029 during the year ended 31st December 2007, from operating activities of ‚£4,093,235. This, along with other matters as set forth in note 3 (which are set out in the results section of this preliminary announcement), indicates the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern."
3. Following the loss for the year of ‚£5,252,029, the Directors do not recommend the payment of a dividend.
4. The calculation of the loss per share for the year ended 31st December, 2007 is based on the loss for the financial period of ‚£5,252,029 and on 131,465,447 Shares, being the number of shares in issue and ranking for dividend during the period (year ended 31st December 2006 - re-stated loss ‚£5,637,690, weighted average number of Ordinary Shares in issue and ranking for dividend, 131,453,301
International Financial Reporting Standard 33 requires presentation of diluted EPS when a company could be called upon to issue shares that would decrease net profit or increase net loss per share. For a loss making company with outstanding share options, net loss would only be increased by the exercise of out-of-the-money options. Since it seems inappropriate to assume that the option holders would act irrationally, no adjustment has been made to diluted EPS for out-of-the-money share options.
5. Notes to the unaudited consolidated cash flow statement
Group Group 2007 2006 ‚£ ‚£ Operating loss (5,173,177) (6,015,997) Adjustments for: Depreciation of property, plant and 172,060 291,682 equipment Share of (profit)/loss of associates (123,928) 282,002 Share-based payment expense 468,118 462,661 __________ _________ Operating cash flows before movements (4,656,927) (4,979,652) in working capital (Increase) in inventories (106,529) - Increase in receivables (19,096) (924) Increase in payables 629,152 574,318 Decrease in provisions (12,751) (54,655) __________ _________ Cash used in operations (4,166,151) (4,460,913) ___ ___
6. Unaudited consolidated statement of changes in equity
Group Group 2007 2006 ‚£ ‚£ (Loss)/profit for the financial period (5,252,029) (5,637,690) Gain/(loss) on foreign currency 30,773 (92,375) translation New share capital subscribed (net of - 4,932 issue costs) Share-based payment 468,118 462,661 __________ _________ Net (reduction)/increase in equity (4,753,138) (5,262,472) Equity at 1st January 2,588,171 7,850,643 __________ _________ Equity at 31st December (2,164,967) 2,588,171 ___ ___ Chairman's Statement
For the year ended 31st December 2007
Unaudited consolidated profit and loss account
For the year ended 31st December 2007
Unaudited consolidated balance sheet
As at 31st December 2007
Unaudited consolidated cash flow statement
For the year ended 31st December 2007
Notes to the financial information
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