SENS.L Regulatory News (SENS)

Sensyne Health Maiden Interim Results 2018

Strong progress in first period as a public company

Oxford, UK; 28 January 2019: Sensyne Health plc (LSE: SENS) ("Sensyne" or the "Company" or the "Group"), the British Clinical AI technology company, today announces its Interim Results for the six months ended 31st October 2018.

Lord (Paul) Drayson, CEO of Sensyne Health, commented:

"I am pleased to report strong progress by Sensyne Health in our first reporting period as a public company, achieving a number of important milestones.

Our business development pipeline is showing good momentum and is on track to meet the objectives set out at our Initial Public Offering ("IPO"). The Company is in an excellent position to capitalise on the data assets and Clinical Artificial Intelligence capabilities provided by its equity partnerships with NHS Trusts and the University of Oxford in order to meet the growing world-wide demand for data-driven healthcare innovation."

ANNOUNCEMENTS TODAY

· Signing of an agreement with Jefferson Health for the clinical and economic evaluation of our GDm-Healthä digital therapeutic product and generation of curated patient data within a US hospital system

· Conditional agreements for two further NHS Trust Strategic Research Agreements ("SRA") with George Eliot NHS Trust and Wye Valley NHS Trust for which they will each be issued with £2.5m in ordinary shares in the Company at £1.75 per share

· Signing of a research agreement with the Big Data Institute at the University of Oxford using Sensyne's anonymised patient data from our existing SRAs and digital health products, focused in the field of chronic disease including chronic kidney disease ("CKD") and cardiovascular disease

OPERATING HIGHLIGHTS (INCLUDING POST-PERIOD EVENTS)

· Increased the number of SRAs with NHS Trusts to six (four at the time of the IPO), increasing the patient population covered by our now five NHS Trust partners from c.2.5 million to c.3m, and data of an additional 2.1m patient admissions while expanding the Real World Evidence ("RWE") population of community care and primary and secondary care integration

· Grown the team to 70 staff in line with plan (41 at the time of the IPO) including highly skilled clinicians, data scientists and software developers 

· Progressed lead Clinical AI project (SH-001) in the field of hypertension identifying nocturnal surge in blood pressure in young and middle-aged patients

· Developed and commenced clinical verification of a proprietary condition tracking algorithm for gestational diabetes; SYNEä GDM/001

· Commencing our first programme on WGS, of asthma patients in collaboration with the University of Oxford and Oxford University Hospitals NHS Foundation Trust

· Undertaken analysis of Phase II & Phase III clinical trial data using Clinical AI and demonstrated our electronic Clinical Research Organisation ("eCRO") Analytics Capabilities

· Chelsea and Westminster have undertaken an analysis of air pollution levels in an Intensive Care Unit using CleanSpaceä

· Launched scalable, cloud-based digital therapeutic product GDm-Healthä for the management of gestational diabetes mellitus ("GDM")

· Increased the number of NHS Trusts adopting Sensyne Health's digital health applications to nine (four at the time of the IPO) in line with plan

· Admitted to the AIM Market of the London Stock Exchange on 17 August 2018, raising £60m in new investment (including transaction costs of £5.5m)

· Relocated to state-of-the-art facilities at the Schrödinger Building at the Oxford Science Park

· Adopted and signed up to the new UK Government code of conduct for data driven health and care technologies

· Formed a consortium with Microsoft, EY, JP Morgan and Peel Hunt and submitted a proposal to the UK Government in response to the Government's consideration of a national, linked health data policy

· Appointed new Interim Non-executive Chairman, Charles Swingland, after Professor Sir John Bell stepped down to avoid any potential conflicts of interest with his role advising UK Government

· Appointed Professor Lionel Tarassenko to the role of Director of R&D and Non-Executive Director

FINANCIAL HIGHLIGHTS

· Cash and cash equivalents of £57.7m at 31 October 2018

· Cash used in operating activities of £5.7m (2017: £1.9m) for the 6 months to 31 October 2018

· Revenues of £39k (2017: £20k) for the 6 months to 31 October 2018

· Adjusted operating loss from continuing operations of £5.1m (2017: £2.9m), which reflects the progress made in recruitment and establishing the Sensyne Health business since formation in May 2017

· Operating loss of £10.3m (2017: £3.4m) for the 6 months to 31 October 2018

· Continued recruitment to support and progress increasing commercial activity is expected to lead to an increased Operating loss for the remainder of the year

Analyst and Investor briefing

Lord Drayson, Chief Executive Officer, and Lorimer Headley, Chief Financial Officer, will present the Interim Results for analysts and investors today at 10.30am GMT. There will be a simultaneous live conference call. 

Dial-in detail are:

Participant local dial-in: +44 (0) 203 0095710

Participant free phone dial-in: 08003767425

Participant US free phone dial-in: +18668692321

Participant code: 6992215

A live webcast of the meeting and the presentation slides, will be available on the investor section of Sensyne Health's website:

https://www.sensynehealth.com/investors/investor-hub

-ENDS-

For more information please contact:

About Sensyne Health

Sensyne Health plc is a healthcare technology company that creates value from accelerating the discovery and development of new medicines and improving patient care through the analysis of real-world evidence from large databases of anonymised patient data in collaboration with NHS Trusts. These anonymised patient data are ethically sourced in that any analysis of anonymised patient data (and hence the Company's access to it) must be pre-approved for each programme on a case-by-case basis by the relevant NHS Trusts. This is to ensure that the purpose of the anonymisation and the proposed analysis are subject to appropriate ethical oversight and information governance, including conformance with NHS principles, UK data protection law and applicable regulatory guidance. Sensyne Health is an early signatory to the Department of Health and Social Care's 'Initial Code of Conduct for data-driven health and care technology'.

Sensyne Health is listed on the AIM Market of the London Stock Exchange (SENS.L). For more information, please visit: www.sensynehealth.com

CEO REVIEW

Introduction

Sensyne Health is enabling the NHS and life sciences companies to collaborate ethically using the Group's Clinical AI technology to analyse anonymised patient medical data across multiple linked datasets to improve patient outcomes, reduce healthcare costs and accelerate medical research. The Group has created a framework for the ethical commercial use of anonymised patient medical data, modelled on its business approach of a double bottom line providing an attractive commercial return and making a positive social impact. This business approach also facilitates investment in effective medical data curation and analysis through equitable deal structures and valuation models.

Progress since IPO

Following our successful IPO in August 2018, we have made good progress on executing our stated goals of growing our team of highly skilled clinicians, data scientists and software developers, which, in turn, will enable us to execute our strategy of using the power of Clinical AI applied to anonymised longitudinal data in NHS datasets to improve patient care and accelerate the development of new medicines. At the time of the IPO in August 2018 our headcount was 41 staff which has grown substantially to 70 people now. We have also invested in our facilities to accommodate our growing team and have relocated to the Schrödinger Building on The Oxford Science Park, one of the UK's leading sites for science and technology companies.

During the period we launched our first scalable, cloud-based digital therapeutic product GDm-Health™, the patient app-to-clinician software system for the management of gestational diabetes mellitus. GDm-Health™ is one of a number of data-driven health technology applications under development by the Group in collaboration with the University of Oxford and Oxford University Hospitals NHS Foundation Trust. Feedback from clinicians and patients alike has been very positive and it is being rolled out rapidly with eight NHS Trusts having adopted the product and the system is now live in six of those Trusts. We are in discussions with other NHS Trusts and today announced that we have signed an agreement with Jefferson Health for the clinical and health economic evaluation of GDm-Health™ within a US hospital system. This work will generate additional anonymised patient data which we will be able to add to our growing database of anonymised patient data in the UK to complete the development and verification of our new condition tracking algorithm for gestational diabetes. We also developed and commenced clinical validation of SYNE™ GDM/001. This will provide decision support to clinicians managing women with gestational diabetes.

Our commercial model is gaining traction with the pharmaceutical industry recognising the value in the longitudinal anonymised datasets that we have access to via our SRAs with a growing roster of NHS Trusts together with the expertise that we have in Clinical AI. Our unique business model is gaining increasing recognition as the right way for anonymised NHS patient data to be analysed for discovery purposes, reflected in us signing up to the new Government Code of Conduct for data driven health and care technologies in the period. We look forward to announcing collaborations over the coming months.

Additionally, after the period end, we submitted a proposal to the UK Government for the creation of a national linked anonymised patient data capability, developed in collaboration with Microsoft, EY, JP Morgan and Peel Hunt. We believe that our 'double bottom line' model working in partnership across the NHS is an excellent foundation for a national linked anonymised data strategy that builds a sovereign capability in data-driven healthcare and we look forward to continued discussions with Government.

Since our IPO we have made good progress with our in-house R&D programmes, which are analysing RWE from anonymised patient phenotypic and genotypic data and other relevant datasets with a goal of achieving a better understanding of the mechanisms of action of therapeutic agents in the real world to improve clinical trial design, identify new therapeutic targets, new indications for existing therapies and sub-sets of responding and non-responding patients.

These programmes include:

· SH-001 for Hypertension

· eCRO Project Analysis Phase II and Phase III clinical trials data

· Oxford Genomics project - partnership to carry out whole genome sequencing on the asthma patient population in collaboration with the University of Oxford and Oxford University Hospitals NHS Foundation Trust

· Development of a condition tracking algorithm for gestational diabetes- SYNE™GDM/001

Market & Strategy

Sensyne Health is creating value from accelerating the discovery and development of new medicines and improving patient care through the analysis and commercialisation of RWE from large databases of anonymised patient data in collaboration with NHS Trusts. Using proprietary clinical algorithms developed by researchers at the University of Oxford and Oxford University Hospitals NHS Foundation Trust (OUH NHS Foundation Trust) and exclusively licensed to the Group we are seeking to discover new insights that improve patient care that are of significant value to pharmaceutical companies throughout the research, development and commercialisation process for medicines. These insights lead to the creation of new intellectual property, including patents that we are licensing to pharmaceutical companies in return for upfront payments, milestone payments and royalties. Financial returns generated through the commercialisation of these insights are shared with the Group's NHS Trust partners via equity ownership in the Group and a share of royalties. No data is sold nor is any ownership or control of data transferred to the Group or its pharmaceutical collaborators during this process.

In addition to the anonymised patient datasets analysed in collaboration with NHS Trust partners, we are also generating data from our own digital health software products that are being used by a number of NHS Trust customers. The Group has lead discovery programmes in the following four broad therapeutic areas: respiratory diseases, cardiovascular diseases, neurological diseases, and immunological diseases/cancer.

Sensyne Health's business strategy is built upon three pillars:

· Data library

o access to a large data library comprising multiple datasets of ethically sourced, clinically curated anonymised patient data across large patient populations that have the critical mass and structure to enable analysis using Clinical AI of RWE across a wide range of therapeutic areas, including all of the lead discovery programmes currently being pursued by the Group;

· Portfolio of Clinical AI technologies

o a portfolio of proprietary Clinical AI technologies that combine leading medical and engineering science expertise developed through a longstanding research partnership between the University of Oxford and OUH NHS Foundation Trust; and

· 'double bottom line'

o a 'double-bottom line' business strategy that provides a financial return back to the NHS Trusts that partner with the Group via equity ownership in the Group and a share of royalties.

The use of the Group's proprietary Clinical AI technologies provides patient benefit via two feedback loops. First, the digital health software products provide feedback during their use on the status of patients that enables early and cost-effective intervention by clinicians and prioritisation of care. Second, the data generated by these software products during their use, when anonymised and aggregated into large databases, creates RWE on medical practice that enables us to use Clinical AI to find clinical insights which provide patient benefit to the NHS and other healthcare providers, as well as value to pharmaceutical companies seeking to develop new medicines.

Strategic Research Partners

The NHS is recognised as having the world's largest single-provider healthcare systems providing care from cradle-to-grave for a population of c65m people. This has the potential to provide a world-leading research capability if the anonymised datasets can be linked effectively and made available for analysis using Clinical AI and other techniques. Sensyne has already signed four SRAs with NHS Trusts; two with Oxford University Hospitals NHS Foundation Trust, and one each with South Warwickshire NHS Foundation Trust (SW NHS Foundation Trust) and Chelsea and Westminster Hospital NHS Foundation Trust (C&W NHS Foundation Trust) who are stakeholders and share in the Group's revenues. The Group announced today that these Trusts have been joined by George Eliot and Wye Valley to bring the total SRAs signed to six representing a combined patient population of approximately 3m people and anonymised data of an additional 2.1m patient admissions while expanding the RWE population of community care and primary and secondary care integration. They will both be issued with £2.5m in ordinary shares in the Company at £1.75 per share, subject to the satisfaction of certain conditions including receipt of an independent valuation report by the Company. The Group is in discussion with an additional eight Trusts regarding similar agreements which would meet the Group's ambitions set at IPO to reach a representative patient population of circa 5m. We expect to make further announcements in due course. In addition, the Group is in discussions with other parties relating to them making further complementary data sets available for analysis using the Group's Clinical AI.

Discovery

We are working to generate significant value from entering into collaborations with pharmaceutical companies to discover new clinical insights from the analysis of RWE. The IP from Clinical AI insights is protected (for example through patents) and then licensed to collaborators on an exclusive or non-exclusive basis. These licenses are structured to provide the Group with an economic interest in any product that may be developed by the licensee via a combination of upfront and milestone payments and royalties on the sale of that product with terms and structures in line with early-stage pharmaceutical development collaborations.

Our commercial model is gaining traction with the pharmaceutical industry recognising the importance of AI as well as Sensyne's unique business model and we are in discussions with a broad range of companies and expect to announce deals over the coming months.

Products

Sensyne has a series of clinically developed products that improve the care quality/outcomes in hospital environments. Our products include prescribed digital applications and hospital systems for clinical care that connect patients, clinicians and researchers whilst generating large databases of phenotypic data, to enable discovery research and improving patient outcomes.

We have developed three clinically validated products, SEND™, GDm-Health™ and EDGE™ in collaboration with the University of Oxford and Oxford University Hospitals NHS Foundation Trust and one product, CleanSpace™, for air pollution monitoring that has been validated by the National Physical Laboratory.

SEND™

System for Electronic Notification and Documentation ("SEND") enables digital charting for vital-sign observations in hospital and the automatic calculation of Early Warning Scores to support clinical decision making. To 31 October 2018, 5.8m patient observations have been recorded and captured using SEND™ in the Oxford University Hospitals NHS Foundation Trust and South Warwickshire NHS Foundation Trust, and represents over 104,000[1] hours of clinician time saved in taking patient observations.

Tablet computers are used for data entry and mounted on the same stands as the physiological monitors used to measure patient vital signs. This extensively researched design is intended to minimise barriers to timely data entry and facilitate viewing of current and historical observations at the point of care whilst unshackling a clinician from a hand-held device to be able to give care. A clinician's 'at-a-glance' dashboard can be accessed remotely and from the nurses' station, to facilitate team-based working and enable clinicians to monitor and prioritise care to patients most in need.

GDm-Health™

GDm-Healthä is a prescribed digital therapeutic for the management of GDM at home. GDM is typically diagnosed in the third trimester of 5-20% of pregnancies and is associated with complications for mother and child during and after birth. The GDm-Healthä system enables clinicians to see at a glance up-to-date blood glucose readings for an individual as recorded by patients, whilst simultaneously monitoring larger groups of patients remotely. This improves care by streamlining communication between midwives and patients, whilst directing attention to those most in need, and importantly freeing up patients and clinicians from unnecessary clinic appointments. GDm-Healthä has been clinically evaluated in over 1,000 patients at the Royal Berkshire NHS Foundation Trust with transformative results and was launched by Sensyne in October 2018.

The GDm-Healthä system comprises a smartphone App which connects to a wireless blood glucose (BG) meter using Bluetooth or NFC (Near Field Communication). A woman's measurements along with any text-based commentary she wishes to log, or request for call back, is then transmitted directly to a clinical dashboard for the multi-disciplinary team to proactively manage.

EDGE™

EDGE is a prescribed digital therapeutic for monitoring chronic obstructive pulmonary disease (COPD) at home. EDGE makes it easy for patients to self-manage their condition by giving them feedback on their physical well-being (through the use of graphs of their vital signs and symptom diary). This proactive patient-to-clinician communication using an adaptive, electronic symptom diary coupled with intelligent algorithms to improve patient compliance and medical adherence can improve a patient's quality of life by supporting them to live independently.

CleanSpace™

CleanSpace™ is a system for monitoring personal exposure to air pollution and helps to research the link between air pollution and chronic disease. CleanSpace™ allows long term monitoring of air pollution to identify hotspots. This data can be used to research links between pollution and chronic disease.

Air pollution is the single biggest environmental health risk (WHO data), linked to 7m premature deaths annually. Air pollution can suppress normal lung function in children and foetal brain development and is linked to the onset of type 2 diabetes, heart disease, lung disease and dementia in adults.

The CleanSpace™ Tags have been tested by the Environmental Research Group at King's College London and the National Physical Laboratory.

Support-HF™

Support-HF is a digital health software system for remote monitoring of heart failure patients outside of the very expensive secondary care settings. The system benefits both the patient and the GP and is designed to ensure that patients' treatment plans are aligned to NICE guidelines. It does this by recording daily vital signs such as blood pressure and weight as well as qualitative supporting information. This information is then shared with specialist cardiology teams and alerts care providers when a patient's data crosses pre-defined warning criteria.

In June 2018, the product was exclusively licensed to Sensyne Health and is an example of the pipeline of digital health software products undergoing research and development at the University of Oxford and OUH NHS Foundation Trust.

BOARD

As announced at the time, Professor Sir John Bell stepped down as Chairman of the Board to avoid any potential conflicts of interest that may have arisen from his role advising the UK Government on the Life Sciences Industrial Strategy. The process to identify his replacement is underway, with Charles Swingland replacing him as Non-executive Chairman on an interim basis before returning to his Non-Executive Director position when a search for a permanent Chairman has concluded. Also during the period we strengthened the Board with the appointment of Professor Lionel Tarassenko as Director of Research & Development and Non-Executive Director of the Board. He also retains his current role as Chairman of the Group's Scientific Advisory Board.

SUMMARY & OUTLOOK

Sensyne Health has made a strong start to its life as a public company and is in an excellent position to capitalise on the growing world-wide demand for data-driven healthcare and RWE. Our business development pipeline is showing good momentum and we believe that Sensyne Health is well positioned for growth and is on track to meet the objectives set out at our IPO.

We expect positive momentum over the remainder of the year with further investments in our teams and business infrastructure as we look to agree further SRAs with new NHS Trusts, progress our R&D programmes, as well as sign collaborations with additional pharmaceutical companies to discover new clinical insights from analysis of RWE.

We are confident of being able to deliver on our vision of becoming a world-leading Clinical AI company creating value, improving patient care and accelerating the development of new medicines.

FINANCIAL REVIEW

Sensyne Health closed the period with cash and cash equivalents of £57.7m having raised net proceeds of £54.5m from its IPO on the AIM Market of the London Stock Exchange on 17 August 2018.

The proceeds have primarily been invested in scaling up the business, with our headcount having risen to 70 people from the 41 employees at the time of the IPO. These hires have been across the business with a focus on expanding our R&D and business development teams to manage and support the increase in our R&D and commercial activities.

In September we moved into new offices at the recently opened Schrödinger Building in the Oxford Science Park, where we have invested £0.5m in capital expenditure to tailor the building to our needs and create an environment that promotes the effective working of our growing staff. This investment will be predominantly offset by the significant rent-free period that was agreed as part of our move to the latest office development at the Oxford Science Park.

Our Adjusted operating loss from continuing operations[2] was £5.1m (2017: £2.9m), which reflects the investment made in establishing and growing the Sensyne Health business since our formation in May 2017.

We incurred a total of £5.5m in IPO costs, of which £2.9m has been capitalised as Share Premium and £2.6m recognised as an Exceptional Item during the period.

Each of the four Strategic Research Agreements with our NHS and Academic Partners have been capitalised as Intangible Assets at £5m, reflecting the equity we provided them in our business. The amortisation of these constitute the majority of the £1.3m charge to Operating loss (2017: £0.4m).

All of our Employees, the Management Team and Executive Directors participate in the Share Incentive Scheme that was put in place at the time of the IPO, as we believe that sharing in the long-term value created for our Shareholders provides recognition, support, incentive and alignment to the long-term objectives of Sensyne Health. This resulted in £1.2m (2017: nil) being recognised for Share-Based-Payments in the period.

Prior to the IPO, the Drayson Technologies Group undertook a legal and financial restructuring to enable the separation and listing of the Sensyne Health business on the London Stock Exchange. Under the requirements of IFRS 3: Business Combinations, these financial statements show the historical trading of the consolidated Drayson Technologies Group, with the Sensyne Health business presented as 'Continuing Operations' and all other aspects of the Drayson Technologies Group as 'Discontinued Operations' (see note 13). The Operating loss for the period including the Discontinued Operations was £13.3m (2017: £43.8m).

Summary Outlook

In line with the expectations set at the IPO, we expect to continue to expand the recruitment of our team to support and progress our increasing commercial activity and deliver on our internal and external R&D programmes leading to an increased Operating loss for the remainder of the year.

Independent review report to Sensyne Health plc

REPORT ON THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Our conclusion

We have reviewed Sensyne Health PLC's Condensed Consolidated Interim Financial Statements (the "interim financial statements") in the interim financial report of Sensyne Health PLC for the 6 month period ended 31 October 2018. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the AIM Rules for Companies.

What we have reviewed

The interim financial statements comprise:

· the Condensed Consolidated Interim Statement of Comprehensive Income for the period ended 31 October 2018;

· the Condensed Consolidated Interim Statement of Financial Position as at the period then ended;

· the Condensed Consolidated Interim Statement of Cash Flows for the period then ended;

· the Condensed Consolidated Interim Statement of Changes in Equity for the period then ended; and

· the explanatory notes to the interim financial statements.

The interim financial statements included in the interim financial report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the AIM Rules for Companies.

As disclosed in note 1 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the directors

The interim financial report, including the interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim financial report in accordance with the AIM Rules for Companies which require that the financial information must be presented and prepared in a form consistent with that which will be adopted in the Company's annual financial statements.

Our responsibility is to express a conclusion on the interim financial statements in the interim financial report based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of complying with the AIM Rules for Companies and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What a review of interim financial statements involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

PricewaterhouseCoopers LLP

Chartered Accountants

London

28 January 2019

The notes on pages 16 to 35 are an integral part of these Condensed Consolidated Interim Financial statements.

The notes on pages 16 to 35 are an integral part of these Condensed Consolidated Interim Financial statements.

Share premium represents the excess of the issue price over the par value on shares issued less transaction costs arising on the issue (note 14).

Other reserves include share option reserve, translation reserve and capital reorganisation reserve.

The notes on pages 16 to 35 are an integral part of these Condensed Consolidated Interim Financial statements.

Notes to the Condensed Consolidated Interim Financial Information

For the six month period ended 31 October 2018

1. Summary of significant accounting policies

General information

Sensyne Health PLC (the 'Company') is a Public Limited Company incorporated and domiciled in England and Wales. The address of its registered office is Schrödinger Building, Heatley Road, Oxford Science Park, Oxford, England, OX4 4GE.

The Company and its subsidiary undertakings are referred to in this report as the Group, ('Group').

The Condensed Consolidated Interim Financial Statements were approved for issue on 28 January 2019.

The financial information for the six months ended 31 October 2018 is unaudited and does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006, but has been reviewed in accordance with IRSE 2410 by the Group's statutory auditors.

Basis of Preparation

The Condensed Consolidated Interim Financial Statements for the six months ended 31 October 2018 included in this Interim Financial Report have been prepared in accordance with IAS 34 'Interim Financial Reporting' (IAS 34) as adopted by the European Union and have been prepared on a going concern basis as described further below.

The Company was incorporated on 20 June 2018 and acquired the Drayson Technologies Limited Group on 7 August 2018 as detailed in note 13. In accordance with IFRS 3 'Business Combinations' the consolidated financial statements of the Company for the 6 months to 31 October 2018 have been prepared as a continuation of the Drayson Technologies Limited (DTL) business and to account for its acquisition by insertion of the holding Company (Sensyne Health PLC).

In doing so, the comparatives for the 6 months to 31 October 2018 and year to 30 April 2018 have been presented as if the Group had always existed in its current form. Refer to note 13 for details of the Group reorganisation.

Going concern

The Directors have prepared the Condensed Consolidated Interim Financial Information on a going concern basis. In considering the going concern basis, the Directors have considered the principal risks and uncertainties set out in this note. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, support the conclusion that there is a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future and a period of not less than twelve months from the date of this report. Accordingly, the going concern basis has been adopted in preparing the interim financial report.

Segmental operations

The Directors consider that the Group operates in predominantly one business segment, being the development and commercialisation of digital health products, and that there are therefore no additional segmental disclosures to be made in these financial statements.

The impact of the new International Financial Reporting Standards

New accounting standards, amendments to standards and IFRIC interpretations which became applicable during the period are noted below.

IFRS 15 'Revenue from Contracts with Customers'

This standard was adopted from the date of initial application - 1 May 2018. The five step model for revenue recognition has been applied to each revenue generating contract. No significant impact on the financial statements following adoption of the standard has been identified.

Revenue comprises the fair value of consideration received or receivable for licence income and the rendering of services in the ordinary course of the Group's activities. Revenue is shown net of value added tax and trade discounts. Revenue is generated as follows:

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

Summary of significant accounting policies (continued)

a) Licence income

Technology and product licensing revenue represents amounts earned for licences granted under licensing agreements, including up-front payments. Revenues are recognised over time when the Group's obligations related to the revenues have been completed.

b) Rendering of services

Services relate to implementation and deployment fees for the technology and products licensed to customers. Revenue is recognised when it is considered highly probable that the related performance criteria will be met in the accounting periods in which the services are rendered.

Under IFRS 15 revenues shall be disaggregated into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors, and reconciled with the segment information.

The nature, amount, timing and uncertainty of licence income and rendering of services are affected by the same economic factors, being those derived from implementing and granting access for the technology and products.

IFRS 16 Leases

The Group has applied IFRS 16 from 1 May 2018. This standard is mandatory for the accounting period beginning on 1 January 2019 but the Group early adopted it on 1 May 2018 under the simplified approach. This standard replaces IAS 17 and sets out the principles for the recognition, measurement, presentation and disclosure of leases.

IFRS 16 assesses the use of off-balance sheet leases, bringing most lessee leases on-balance sheet and eliminating the distinction between operating and finance leases. The business has assessed the impact of the standard which replaces IAS 17 and sets out the principles for the recognition, measurement, presentation and disclosure of leases.

At inception, the Group assesses whether a contract is or contains a lease. The Group recognises a Right Of Use (ROU) asset and a lease liability at the commencement of the lease. The lessee recognises a liability for lease obligations, initially measured based on the present value of the lease payments. Correspondingly, a ROU asset is capitalised which is generally the equivalent to the present value of the future lease payments, plus initial direct costs and the cost of obligations to refurbish the asset, less any incentives received. The ROU is subject to the testing for impairment if there is an indicator for impairment and is amortised over the useful life.

ROU assets are included in the statement of financial position, and the lease liability is included separately under current and non-current liabilities. The payments for such leases are recognised in the income statement on a straight-line basis over the lease term. During the application of IFRS 16 to operating leases, the ROU of the single leased asset was measured at the amount of the lease liability based on the Company's weighted average cost of capital of 18%.

The Group has another lease agreement which will expire in less than 12 months from the initial adoption of IFRS 16. In accordance with IFRS 16 the exemption for disclosing further details on that lease has been applied and disclosed the cost related to that lease in Note 12.

IFRS 9 Financial instruments

This does not have a material impact on the financial statements as a whole.

Intangible assets

a) Research and development costs

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

An internally-generated intangible assets arising from the Company's development are recognised if, and only if, all of the following conditions have been demonstrated:

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

Summary of significant accounting policies (continued)

· the technical feasibility of completing the intangible asset so that it will be available for use or sale;

· the intention to complete the intangible asset and use or sell it;

· the ability to use or sell the intangible asset;

· how the intangible asset will generate probable future economic benefits;

· the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible assets; and

· the ability to measure reliably the expenditure attributable to the intangible asset during its development.

The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognised, development expenditure is recognised in the income statement in the period in which it is incurred. Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

Amounts capitalised include an allocation of R&D staff payroll costs based on a time-sheet system and of externally provided works similarly on a scope and time invoiced basis. In respect to payroll costs, senior management and Directors are specifically excluded.

Intangible assets are amortised on a straight-line basis over their expected useful life of 3 years once fully completed and the amortisation is classified within research and development expenses in the income statement.

b) Software licences

Acquired software licences are stated at cost less accumulated amortisation and accumulated impairment losses. Software is amortised over its estimated useful life, on a straight-line basis and is classified within research and development expenses in the income statement.

Where factors, such as technological advancement or changes in market price, indicate that residual value or useful life have changed, the residual value, useful life or amortisation rate are amended prospectively to reflect the new circumstances.

The assets are reviewed for impairment if the above factors indicate that the carrying amount may be impaired.

c) Other licences

Other licences include;

· Licences acquired from third parties with a finite life for the further development and commercialisation of intellectual property and products in the field of digital health, and;

· Strategic Research Agreements with certain NHS Trust with a 5 year term that provide the Group with the option to license the further development of intellectual property and products in the field of digital health, but also access to specific patient data sets derived by these NHS Trusts.

These licences have a finite useful life equal to the term of the contract and are amortised over this term accordingly on a straight-line basis. Amortisation charges are classified within research and development.

Where factors, such as technological advancement or changes in market price, indicate that residual value or useful life have changed, the residual value, useful life or amortisation rate are amended prospectively to reflect the new circumstances.

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

Summary of significant accounting policies (continued)

The assets are reviewed for impairment if the above factors indicate that the carrying amount may be impaired.

d) Intellectual property

Intellectual property comprising patents and trademarks has a finite useful life and is carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of intellectual property over its estimated useful life, subject to any additional impairment that might arise and is classified within research and development in the income statement. The estimated useful lives of patents and trademarks are as follows:

Patents - 5 years on a straight-line basis

Trademark - 5 years on a straight-line basis

Until an item of intellectual property is granted and registered, costs are capitalised and are not amortised until the assets has been fully developed and is operational.

Property, plant and equipment

Property, plant and equipment assets are carried at historical cost less accumulated depreciation and any recognised impairment in value. Depreciation is charged so as to write off the costs of assets over their estimated useful lives, using the straight-line method, as follows:

Leasehold improvements - up to 3 years

Fixtures and fittings - up to 5 years

Plant and machinery - up to 3 years

At each period end date, property, plant and equipment is reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable. When a review for impairment is conducted, the recoverable amount is assessed by reference to the net present value of expected future pre-tax cash flows of the relevant cash-generating unit or fair value, less costs to sell, if higher. Any impairment in value is charged to the income statement in the period in which it occurs.

Long-term deposits

Long term deposits are rent deposits which are receivable in more than one year from the period end.

Financial instruments

a) Trade receivables

Trade receivables are measured at initial recognition, do not carry any interest and are stated at their fair value and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in the income statement when there is evidence that the asset is impaired.

b) Cash and cash equivalents

Cash and cash equivalents in the Condensed Consolidated Statement of Financial Position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less and bank overdrafts. In the Condensed Consolidated Statement of Financial Position, bank overdrafts are shown within borrowings in current liabilities.

c) Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into.

d) Trade payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

Summary of significant accounting policies (continued)

Provisions for liabilities

Provisions are recognised in the Condensed Consolidated Statement of Financial Position when there is a present legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are measured at the Directors' best estimate of the expenditure required to settle the obligation at the period end date. Where the effect is material, the provision is determined by discounting the expected future cash flows at a pre-tax rate which reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Share-Based Payments and taxation implications

The Group grants share options to employees, Directors and certain contractors. In accordance with IFRS 2, "Share Based Payments", equity-settled share based payments are measured at fair value at the date of grant.

Fair value is measured using the Monte Carlo pricing model, as appropriately amended, taking into account the terms and conditions of the share based awards.

The fair value determined at the date of grant of the equity-settled share based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of the number of shares that will eventually vest. Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Statement of Comprehensive Income, with a corresponding adjustment to equity.

When the options are exercised and are satisfied by new issued shares, the proceeds received net of any directly attributable transaction costs are credited to share capital and share premium.

The share based payments charge is included in 'operating expenses' with a corresponding increase in 'Other reserves'.

In the UK, the Group is entitled to a tax deduction for amounts treated as compensation on exercise of certain employee share options and on the vesting of conditional share awards under UK's tax rules. A compensation expense is recorded in the Group's Statement of Comprehensive Income over the period from the grant date to the vesting date of the relevant options and conditional share awards. As there is a temporary difference between the accounting and tax bases a deferred tax asset arises but is not recognised on the basis that it is not probable that future profits will arise against which the deferred tax asset may be utilised. The deferred tax asset arising is calculated by comparing the estimated amount of tax deduction to be obtained in the future (based on the Company's share price at the period end date) with the cumulative amount of the compensation expense recorded in the Statement of Comprehensive Income. If the amount of estimated future tax deduction exceeds the cumulative amount of the remuneration expense at the statutory rate, the excess is recorded directly in equity against retained earnings.

Exceptional Items

The Group considers exceptional items to be those which derive from events or transactions which are significant for separate disclosure by virtue of their size or incidence in order for the user to obtain a proper understanding of the Group's financial performance. These items include, but are not limited to, transaction costs associated with the Initial Public Offering ('IPO') and Group reorganisation as explained in note 13 and 14 to the condensed interim consolidated financial statements.

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

Summary of significant accounting policies (continued)

Critical accounting judgements and sources of estimation uncertainty

The most critical accounting policies in determining the financial condition and results of the business are those requiring the greatest degree of subjectivity or complex judgement. These relate to the valuation of acquired intangibles.

a) Intangible assets impairment reviews

When a review for impairment is conducted the recoverable amount of an asset is determined based on the higher of market value or value-in-use calculations prepared on the basis of management's assumptions and estimates.

b) Valuation of Strategic Research Agreements as included in intangible assets

The basis of valuation is on the basis that each party willingly enters into the terms of the contract which is in exchange for equity in the Company.

c) Capitalisation of Internally Generated Intangible Assets

The Group Health Operations follows the guidance of IAS38 to determine when internally generated intangible assets should be capitalised. The determination requires judgement. In making this judgement, management

assess each project against each of the capitalisation criteria. If one of the conditions is not met then the costs attributable to the project would not be capitalised.

d) Share Based Payments

Estimates have been made in the period around the fair value of the share options granted to the Directors, employees and non-employees of the Group for services provided and expected to vest based on non-market conditions.

e) Fair value of discontinued operations

Fair value of net assets at the time the decision was made to demerge the discontinued operations

Financial risk management

The Group finances its operations through shareholders' funds. This approach seeks to minimise financing costs and generate optimum shareholder value through efficient use of those funds.

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

2. Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

As net losses were recorded in the six months ended 31 October 2018 and in each of the comparative periods, the dilutive potential shares are anti-dilutive and therefore were excluded from the earnings per share calculation.

3. Revenue

Revenue represents amounts derived from the provision of goods and services which fall within the business's ordinary activities after deduction of trade discounts and Value Added Tax. These goods and services are technology and product licensing revenues earned from licences granted under licensing agreements, including up-front payments.

All turnover arose from the principal activity of the business. The origin of revenue is:

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

4. Operating loss

Transaction costs totalling £5.5m were incurred in respect to the application made to the London Stock Exchange for all the issued and to be issued Ordinary share capital to be admitted to trading on AIM of which £2.6m has been included within the operating loss to 31 October 2018 and £2.9m was offset against the Share Premium account in accordance with IAS 32 'Financial Instruments: Presentation.'

5. Employees and staff costs

Staff costs, including Directors, comprised the following:

£544k (H1 FY18: £78k, FY18 £362k) of the wages and salaries figure above has been capitalised in the period in line with the accounting policy on research and development costs.

6. Other income

Included in Other Income and Indirect and Direct Tax Debtors is £180k in relation to a R&D tax credit (H1 2018: £Nil) for the year ended 30 April 2018. This represents the credit receivable by the Group for activity during the period. These have been estimated at a rate of 14.5% of the surrenderable loss arising from the R&D incentive, being the prevailing R&D tax credit rate at the time.

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

7. Intangible assets

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

8. Property, plant and equipment

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

9. Trade and other receivables

10. Trade and other payables

11. Financial instruments

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

Financial instruments (continued)

The business does not hold any other form of financial assets.

The business has the following financial liabilities whose carrying amount and fair values were as follows:

Financial risks

The business has exposure to the following principal financial risks in the operation and management of its business:

(i) Liquidity risk; and

(ii) Credit risk

Liquidity risk

The business's treasury policies are designed to ensure that sufficient cash is available to support current and future business requirements. Cash and working capital management is a core feature of the Board's business model and rolling cash flow forecasts, updated on at least a monthly basis, are reviewed to manage these requirements.

Credit risk

The business's principal financial assets are cash, trade and other receivables, corporation tax and prepayments and accrued income, the carrying values of which represent the business's maximum exposure to credit risk in relation to financial assets, as shown in this note. The business's credit risk is primarily attributable to its cash.

The credit risk on cash is limited because the counterparties are banks with triple-A credit ratings assigned by international credit-rating agencies or banks that have been financed by their government.

The majority of the business unit's other receivables are due from "Blue Chip" organisations or equivalents (NHS Trusts) where the risk of default is considered low.

The amounts presented in the Condensed Consolidated Statement of Financial Position are net of any allowances for doubtful receivables, estimated by the Group's management based on prior experience and their assessment of the current economic environment.

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

12. Lease assets and liabilities

Leased assets are capitalised at the commencement date of the lease and comprise the initial lease liability amount, initial direct costs incurred when entering into the lease less any lease incentives received.

Lease liabilities

The lease liability is measured at the present value of the fixed and variable lease payments net of cash lease incentives that are not paid at the period end date. Lease payments are apportioned between the finance charges and reduction of the lease liability to achieve a constant rate of interest on the remaining balance of the liability. Lease payments for buildings exclude service fees for cleaning and other costs.

The Group has another lease agreement which will expire in less than 12 months from the initial adoption of IFRS 16. In accordance with IFRS 16 the exemption for disclosing further details on that lease has been applied. The cost incurred with respect to this lease for the 6 months to 31 October 2018 was £189,840.

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

13. Group restructure and Initial Public Offering

As part of the Offer and Admission of the Ordinary share capital of the Company to the Alternative Investment Market (AIM) of the London Stock Exchange, a restructuring was carried of the Drayson Technologies Group, where DTL was the ultimate parent company. DTL held the wholly owned subsidiary Drayson Technologies (Europe) Limited (DTEL), that contained the Sensyne Health business and other operations. The restructuring resulted in the Sensyne Health business now being held under the ultimate Group parent Sensyne Health PLC. The remaining business of DTEL is now held under the separately owned Drayson Holdco 2 Limited (DH2L) Group.

The steps carried out from this date through to the Offer and Admission and their impact on the Condensed Consolidated Interim Financial Statements are set out below.

Incorporation of Sensyne Health PLC

Sensyne Health PLC was incorporated on 20 June 2018, as Drayson Holdco Limited and later renamed Sensyne Health Limited prior to its re-registration as a PLC on 13 August 2018.

Share for share exchange - capital reorganisation

On 7 August 2018, Sensyne Health PLC acquired the entire share capital of DTL with the consideration being the issue and allotment of shares in the Company. The total consideration of the share for share exchange transaction was £132,487k. This resulted in the Company having acquired DTL for £132,487k and Sensyne Health PLC replaced DTL as the ultimate parent Company of the Group. Please see note 14 'Share Capital' for further details of this transaction.

The issue of shares to acquire DTL fell within the provisions of merger relief (section 612 of the Companies Act 2006) such that the Company was prohibited from recording share premium. In accordance with s615 of the Companies Act 2006 and as permitted by IFRS, the Company has recorded its investment in DTL an amount equal to the aggregate nominal value of the shares issued. 

The insertion of a new Company on top of an existing Group by issuing shares to the existing shareholders does not meet the definition of a 'business combination' in accordance with IFRS 3. This is because, if the transaction was defined as a business combination, it would be characterised as a reverse acquisition with DTL being deemed to be the accounting acquirer. However, in accordance with in IFRS 3 Appendix B para 19, the accounting acquirer (Sensyne Health PLC) must meet the definition of a business for the transaction to be accounted for as a reverse acquisition.

The transaction is not a business combination and should be accounted for as a capital reorganisation and the share for share exchange transaction accounted for in accordance with IFRS 3 'Business Combinations'.

In these condensed consolidated interim financial statements, the transaction to insert the new holding Company, Sensyne Health PLC, has been presented as though the capital reorganisation results in a continuation of the consolidated financial statements of its predecessor holding Company, DTL.

The consolidated financial statements of the new entity will be presented using the carrying values from the consolidated financial statements of the previous Group holding Company, DTL. The equity structure −that is, the issued share capital - reflects that of the new Company, with other amounts in equity (such as retained earnings, translation reserves) being those from the consolidated financial statements of the DTL Group. The resulting difference that arose is recognised as a component of Other Reserves. The acquirer's (i.e. Sensyne Health PLC) consolidated financial statements include the acquired entity's (DTL) full year's results (including comparatives), even though the transaction occurred part of the way through the year.

Share reorganisation

On 7 August 2018, the Company undertook a share reorganisation in readiness for the demerger of its interests in DTEL. Please see note 14 'Share Capital' for further details of this transaction.

DTL transfers the entire investment in DTEL to Sensyne Health PLC

On 8 August 2018, DTL transferred its entire investment in DTEL to the Company at book value prior to the planned demerger in the next step.

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

Group restructure and Initial Public Offering (continued)

Demerger of DTEL via a reduction and repayment of capital

On 8 August 2018, the Company demerged DTEL whereby the share capital was reduced, with £2,486k - representing the fair market value of this company on the same date - being repaid, the repayment being satisfied by the transfer by the Company to DH2L of the entire share capital of DTEL, in consideration of the allotment and issue by DH2L of one Drayson Holdco 2 Limited share for each Sensyne Health PLC share held by the Sensyne Health PLC shareholders at the date of the demerger. The net assets of DTEL as at the date of the demerger, 8 August 2018, was £2,486k, resulting in nil gain nil loss on distribution of £2,486k.

Capital reduction to create distributable reserves for future use

On 9 August 2018, the Company entered into a capital reduction to free up distributable reserves for future use. Please see note 14 'Share Capital' for further details of this transaction.

Re-registration as a PLC

On 13 August 2018, the Company re-registered itself as Sensyne Health PLC in preparation for its Offer and Admission to AIM.

Bonus issue and share re-designation of entire share capital

Immediately prior to Admission, on 17 August 2018, the Company issued bonus share capital to its shareholders to ensure the number of shares is appropriate to achieve the target share price of £1.75 per share on Admission and on the same date re-designated each class of share in issue at that same date as Ordinary shares such that the Company has only one class of shares prior to the IPO. Please see note 14 'Share Capital' for further details of this transaction.

Admission to AIM

On 13 August 2018, the Company announced its Initial Public Offering (IPO) to place its existing 94,285,800 £0.10 Ordinary shares and a further placing of 34,285,714 £0.10 Ordinary shares to be issued by the Company pursuant to the placing offered at a price of £1.75 per share. The placing shares to be issued by the Company represented 26.7% of the enlarged share capital. The IPO occurred on 17 August 2018. Please see note 14 'Share Capital' for further details of this transaction.

Discontinued operations

a) Description

During 2018, the Group set out a plan to demerge the Sensyne Health business from DTL. In accordance with IFRS 3 'Business Combination' the demerger transaction would represent a return of capital and capital distribution to the shareholders of Sensyne Health PLC the ultimate parent Company.

This requires that except for transactions of the Sensyne Health business, all other DTL transactions are reclassified as discontinued operations and the associated assets and liabilities were consequently presented as held for distribution to it owners in the condensed consolidated financial statements, to comply with IFRS 5 'Assets held for sale and discontinued operations'.

DTEL was the trading subsidiary of DTL that held both the Sensyne Health Business and other businesses of the DTLGroup. DH2L was incorporated as a separate entity to the DTL Group.

On 8 August 2018, the Company entered into a capital reduction to cancel its share capital of £2,486k. A capital repayment for a value of £2,486k was then made to shareholders that was satisfied by the Company transferring the entire issued share capital of DTEL to a separate entity DH2L, in consideration for DH2L issuing shares to the shareholders of the Company (at nil gain to Sensyne Health PLC).

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

Group restructure and Initial Public Offering (continued)

Discontinued operations in 2018 include the results of DTEL for the period up to 8 August 2018, when it was demerged from Sensyne Health PLC by way of a capital reduction. Prior year comparatives in the condensed consolidated income statement have been restated accordingly in accordance with IFRS 5 'Assets Held for Sale and Discontinued Operations'.

b) Results of discontinued operations

DTEL was demerged on 8 August 2018 and is reported in the current period as a discontinued operation. Financial information relating to the discontinued operation for the period to the date of disposal is set out below.

* Exceptional items relate to impairment charges to intangible assets from a previous restructuring of DTEL which should no longer be applied to the operations of the discontinued business.

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

Group restructure and Initial Public Offering (continued)

c) Details of the disposal of discontinued operations

Included in the analysis below are the carrying amounts of assets and liabilities as at the date of disposal.

d) Assets and liabilities held for distribution to owners

The following assets and liabilities were reclassified as held for distribution to owners in relation to the discontinued operation as at each of the comparative reporting dates:

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

14. Share Capital

On incorporation on 20 June 2018, the Company issued a single Ordinary share with a nominal value of £1 per share.

On 24 July 2018, the issued Ordinary share capital was sub divided into 100 £0.01 Ordinary shares. On the same day, 5,655 Ordinary shares with a nominal value of £0.01 per share were issued and then the Company carried out a consolidation of Ordinary shares to provide 1 Ordinary share with a nominal value of £57.55 per share.

On 7 August 2018, the Company issued 433,199 Ordinary shares, 1,033,560 preferred A1 shares, 93,047 preferred A2 shares, 465,290 preferred B shares and 277,025 preferred C shares each class with a nominal value of £57.55 per share to the shareholders of Drayson Technologies Limited in exchange for 100% of the share capital of this Company. The total nominal value of share for share exchange was £132,487,064.

On 7 August 2018, the Company undertook a share reorganisation such that each existing share class is sub-divided into one FV share with a nominal value of £1.08 per share and one H share with a nominal value of £56.47 per share. The FV shares would entitle the shareholder to a share of the assets of the Freevolt business and H shares would entitle the shareholder to a share of the assets of the Health business. The total nominal value of the FV shares is £2,486,291 and the total nominal value of the H shares is £130,000,773.

On 8 August 2018, the Company entered into a capital reduction to cancel its entire FV share capital of £2,486,291. A capital repayment for a value of £2,486,291 was then made to shareholders that was satisfied by the Company transferring the entire issued FV share capital of Drayson Technologies (Europe) Limited to a separate entity Drayson Holdco 2 Limited, in consideration for Drayson Holdco 2 Limited issuing shares to the shareholders of the Company (at nil gain to Sensyne Health PLC).

Notes to the Condensed Consolidated Interim Financial Information continued

For the six month period ended 31 October 2018

Share Capital (continued)

On 9 August 2018, the Company entered into a capital reduction to reduce the nominal value of H share capital from £56.47 per share down to £0.10 per share reducing the total nominal value of H share capital to £230,212. The capital reduction of £129,770,561 has been credited to retained earnings.

On 9 August 2018, the Company issued preferred C shares at £73.77 with a total nominal value of £20,333 and total share premium of £14,979,667 in connection with the acquisition of Strategic Research Agreements with 3 NHS trusts in the United Kingdom.

On 17 August 2018, the Company issued 62,114 £0.10 preferred C shares as a result of a performance clause in the Company's articles. The bonus issue was debited to the Share Premium account.

Immediately prior to Admission, on 17 August 2018, the Company issued bonus share capital of 91,718,231 £0.10 ordinary H shares to its shareholders and on the same date re-designated each class of share in issue at that same date as Ordinary shares such that the Company has only one class of shares prior to the IPO. This resulted in a total share capital of 94,285,800 £0.10 Ordinary shares prior to Admission. The bonus shares at IPO were debited to the Share Premium account.

On 17 August 2018, the Company was admitted to AIM with a placing of 34,285,714 new £0.10 Ordinary shares at £1.75 per shares fully paid up for a total consideration of £60m. £56.6m has been credited to share premium account with expenses of £2.9m offset against this account.

15. Related parties

Included within trade and other payables is a balance due to Drayson Technologies (Europe) Limited of £608k.

This company was demerged from the Group during the period as set out in note 13 and is a related party by virtue of common control.

16. Contingent liabilities and financial commitments

The Group has no contingent liabilities, financial commitments or provisions.

17. Subsequent events

The Company has signed two additional Strategic Research Agreements on 27 January 2019, with George Eliot NHS Trust & Wye Valley NHS Trust, for which they will be issued with an aggregate total of £5m in ordinary shares in the Company at £1.75 per share, subject to the satisfaction of certain conditions including receipt of a s593 report by the Company.