TIDMTEK
RNS Number : 5573W
Tekcapital plc
20 August 2015
TEKCAPITAL Plc
("Tekcapital", the "Company" or the "Group")
Unaudited Interim Results
for the six months ended 31 May 2015
Tekcapital plc (AIM: TEK), an international provider of
technology and intellectual property services, announces its
unaudited interim results for the six months ended 31 May 2015.
Financial Highlights
-- Half year revenues increased 462% to $287,488 (H1 2014: $51,111)
-- Net loss decreased 30.6% to $659,936 (H1 2014: loss of $951,566)
-- Cash and cash equivalents at period end of $3,786,424 (30 November 2014: $1,370,905 )
-- Net assets increased to $4,313,490 (30 November 2014: $1,717,000)
Operational Highlights
-- Significant progress made towards the strategic objectives as
set out in Tekcapital's IPO Admission Document
-- Expansion of the Company's services with the continued
development of InventionEvaluator(R) (acquired in 2014) and the
addition of Tekcapital's technology acquisition and out-license
programme
-- Exclusive licenses to 18 patents acquired during the period
from US universities, across diverse areas of technology and
applications
-- Expansion of the Science Advisory Board from 29 to 40
physicians, scientists and engineers across a wide variety of
disciplines to expand the range of technologies the Company is able
to critically review
-- Successful GBP2 million (net) (approx. $3.12 million) equity
financing to invest further in additional technology acquisitions
and to expand the Company's sales force
Commenting on the results, Dr. Clifford Gross, Executive
Chairman of Tekcapital plc, said:
"We have made significant progress towards achieving the
objectives that we set out when we came to the AIM market in April
2014.
"During the first half of the year, we have established a strong
foundation for future revenue growth including the commercial
launch of our technology acquisition and out-license service.
Furthermore, we believe that the 18 exclusively licensed
intellectual properties we have acquired during the period,
combined with increasing sales momentum, provide a strong
foundation for further growth. All of these technology rights have
been acquired for either cash or equity in Tekcapital and we
believe present significant up-side potential if successfully
commercialised.
"We therefore remain confident in our ambitions to create a
marketplace for recognising and benefiting from the true underlying
value of university intellectual capital."
For further information please contact:
Tekcapital Plc +1 305 200 3450 Ext 305
Clifford M. Gross, Ph.D. info@tekcapital.com
Allenby Capital Limited (Nominated Adviser
& Joint Broker) +44 (0) 20 3328 5656
Jeremy Porter / Alex Brearley
Optiva Securities Limited (Joint Broker) +44 (0) 20 3137 1904
Jeremy King / Vishal Balasingham jeremy.king@optivasecurities.com
Walbrook PR Ltd +44 (0) 20 7933 8780
Paul Cornelius / Paul McManus tekcapital@walbrookpr.com
About Tekcapital - The World's Largest University Network for
Open Innovation
Tekcapital helps clients profit from new, university-developed
intellectual properties. With our proprietary discovery search
engine, linked to 4,000+ universities in 160 countries, coupled
with expert scientific review, we provide a turn-key service to
make it easy for clients to find and acquire the IP they need to
create a competitive advantage. Tekcapital plc is listed on the AIM
market of the London Stock Exchange (AIM: symbol TEK) and is
headquartered in Oxford, in the UK. For more information, please
visit www.tekcapital.com.
Chairman's statement
I am pleased to present our half year results for the period
ended 31 May 2015. Our strategy, as laid out in our IPO Admission
Document, is to scale Tekcapital's business up to a position that
enables us to provide our service offering to a wide range of
clients around the world, with an initial concentration on the UK
and North American markets.
We have also focused on adding additional services, either
organically or through accretive acquisitions, with the aim of
enabling the Group to assist its clients further in determining and
extracting value from IP and the transformative innovations that
they represent.
As planned, we have begun to scale up our sales operations and
have also expanded our service offering with the post-acquisition
development of InventionEvaluator(R) and the launch of our
Technology Acquisition and Out-license service.
These newly expanded services leverage our core competencies and
have enabled Tekcapital to acquire 27 exclusive intellectual
property licenses in the year-to-date. These acquisitions have been
across a diverse range of areas including:
-- wearable optical displays;
-- non-invasive glucose monitoring for diabetics;
-- improved food processes to enhance the nutritional content of widely-consumed foods;
-- portable energy harvesting to power mobile electronics from everyday human movement; and
-- improved air conditioning efficiency using advanced aeronautical designs.
All of these technology rights have been acquired for either
cash or equity in Tekcapital and we believe present significant
up-side potential if successfully commercialised.
We have similarly expanded our Science Advisory Board with 11
new appointments to widen the range of technologies that the
Company is able to review. At the end of the period, our Science
Advisory Board consisted of 40 physicians, scientists and engineers
across a wide variety of industries.
At the beginning of May 2015 we completed an oversubscribed,
follow-on equity financing round, raising approximately GBP2
million (approximately $3.12 million), net of expenses. We finished
the period with strengthened net assets of $4.31 million (30
November 2014: $1.72 million). Furthermore, post period end and in
line with our stated strategy of acquiring compelling new
intellectual property rights for subsequent out-licensing, we have
identified and successfully acquired a portfolio of patented,
energy efficiency-technologies, designed to improve the efficiency
and reduce the carbon footprint of central air conditioning
systems. As with our other acquired property rights, our goal is to
out-license these nine patents to a major manufacturer to empower
them to leverage the competitive advantage derived from these
technology advancements.
Financial Review
Revenue for the period was $0.29 million, representing a 462%
increase over the comparative period last year (H1 2014: $0.05
million). This increase in revenue was a direct result of the
clients using the Company's intellectual property services and the
first full six months of revenue recognition from the acquisition
of InventionEvaluator(R), completed in mid-2014.
Group losses before tax were $0.66 million (H1 2014: loss of
$0.95 million) as the Company continued its strategy to invest for
future growth over the coming years with the addition of new staff,
new routes to market and new product offerings.
On 6 May 2015, the Company raised net proceeds of GBP2 million
(approximately $3.12 million) by way of an oversubscribed equity
placing of 10,750,000 new ordinary shares of 0.4p each at a price
of 20 pence per share.
Loss per share therefore reduced to $0.03 as a result of sales
growth and the increased shares in issue from 17,037,309 to
25,032,898.
Cash and cash equivalents at the period end stood at $3.79
million (FY 2014: $1.37 million) with net assets increased to $4.31
million (H1 2014: $1.44 million).
Current trading and outlook
Having widened our service range, extended our market presence,
and begun to raise our profile, we expect to see net growth in our
business for the remainder of the year and beyond, whilst keeping
expenses and fixed overheads at modest levels.
I would like to take this opportunity to thank our shareholders
for supporting us to date and we look forward to delivering on our
goal to help our clients create market value and profit from new
university developed technologies and intellectual property. I look
forward to providing a full report on progress within our annual
results for the year to 30 November 2015.
Clifford M. Gross, Ph.D.
Executive Chairman
20 August 2015
Unaudited condensed consolidated income statement for the six
month period ended 31 May 2015
Notes Six months Six months Year ended
ended 31 ended 31 30 November
May 2015 May 2014 2014
Unaudited Unaudited Audited
$ $ $
Revenue 287,488 51,111 210,337
Cost of sales - (29,758) -
----------- ----------- -------------
Gross profit 287,488 21,353 210,337
Foreign exchange movements (95) 8,406 (80,112)
Other administrative
expenses (947,352) (406,195) (1,123,936)
Operating loss (659,959) (376,436) (933,711)
Finance income 23 - 142
IPO costs - (575,130) -
----------- ----------- -------------
Loss before taxation (659,936) (951,566) (993,569)
Income tax expense 3 - - (1,300)
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----------- ----------- -------------
Loss after taxation
for the period attributable
to equity holders (659,936) (951,567) (994,869)
=========== =========== =============
Basic and diluted loss
per share ($): 4 (0.03) (0.06) (0.05)
All amounts relate to continuing operations.
Unaudited consolidated statement of comprehensive income for the
six month period ended 31 May 2015
Notes Six months Six months Year ended
ended 31 ended 31 30 November
May 2015 May 2014 2014
Unaudited Unaudited Audited
$ $ $
Loss for the year (659,936) (951,567) (994,869)
Other comprehensive
income
Currency translation (37,290) - -
difference
=========== =========== =============
Other comprehensive (37,290) - -
income
Total comprehensive
income (697,226) (951,567) (994,869)
=========== =========== =============
Unaudited condensed consolidated statement of financial position
as at 31 May 2015
Notes As at 31 May 2015 As at 31 May 2014 As at 30 November 2014
Unaudited Unaudited Audited
$ $ $
Assets
Non-current assets
Intangible assets 523,244 - 350,251
Property, plant and equipment 4,130 17,434 6,628
------------------ ------------------ -----------------------
527,374 17,434 356,879
Current assets
Trade and other receivables 188,717 106,403 90,568
Cash and cash equivalents 3,786,424 2,131,569 1,370,905
------------------ ------------------ -----------------------
3,975,141 2,237,972 1,461,473
Total assets 4,502,515 2,255,406 1,818,352
================== ================== =======================
Equity and liabilities
Current liabilities
Trade and other payables 189,025 810,736 100,052
Current income tax liabilities - - 1,300
Loans and borrowings - - -
------------------ ------------------ -----------------------
Total liabilities 189,025 810,736 101,352
Capital and reserves
Share capital 5 223,677 148,438 154,842
Share premium 5,896,007 2,364,667 2,673,905
Merger reserve (72,169) (72,159) (72,169)
Retained earnings (1,734,025) (996,276) (1,039,578)
Total equity attributable to equity holders
of the parent 4,313,490 1,444,670 1,717,000
Total equity and liabilities 4,502,515 2,255,406 1,818,352
================== ================== =======================
Unaudited condensed consolidated statement of cash flows for the
six month period ended 31 May 2015
Notes Six months ended 31 May Six months ended 31 May Year ended 30 November
2015 2014 2014
Unaudited Unaudited Audited
$ $ $
Cash flows from operating
activities
Loss before income tax (659,936) (951,567) (993,569)
Adjustments for:
Depreciation 1,870 - 2,003
Amortisation 6,803 - 3,605
Share based payment 2,779 - -
expense
Finance costs (net) (23) - (142)
------------------------- -------------------------- --------------------------
Operating profit before working
capital changes (648,507) (951,567) (988,103)
Changes in working
capital:
Increase in trade and other
receivables (98,150) (94,519) (78,685)
Increase in trade and other
payables 88,973 763,037 52,354
Tax paid (1,300)
Net cash used in operating
activities (658,984) (283,049) (1,014,434)
Cash flows from investing
activities
Acquisition of property, plant and
equipment (55) (17,434) (8,631)
Disposals of property, plant and
equipment 419 - (33,306)
Interest received 23 - 142
------------------------- -------------------------- --------------------------
Net cash from/(used in) investing
activities 387 (17,434) (41,795)
Cash flows from financing
activities
Repayment of loans - - -
Loans from related - - -
parties
Proceeds from issuance of Ordinary
Shares 3,286,060 3,342,800 3,337,882
Costs of raising finance (164,456) (924,648) (924,648)
------------------------- -------------------------- --------------------------
Net cash from financing activities 3,121,604 2,418,152 2,413,234
Net increase in cash and cash
equivalents 2,463,007 2,117,669 1,357,005
Net foreign exchange (47,488) - -
difference
Cash and cash equivalents at the
beginning of the period 1,370,905 13,900 13,900
Cash and cash equivalents at the
end of the period 3,786,424 2,131,569 1,370,905
========================= ========================== ==========================
During the period ended 31 May 2015 the Company's material
non-cash transactions consisted of shares issued on acquisition of
licences, as disclosed in note 5.
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Unaudited condensed consolidated statement of changes in equity
for the six month period ended 31 May 2015
Share capital Share premium Retained earnings Merger reserve Total equity
attributable to
equity holders of
the parent
$ $ $ $ $
Unaudited
Balance at 1 December
2014 154,842 2,673,905 (1,039,578) (72,169) 1,717,000
Issue of Ordinary
Shares, net of issue
costs 68,835 3,222,102 - - 3,290,937
Share based payments - - 2,779 - 2,779
Comprehensive income
Loss for the period - - (659,936) - (659,936)
Other comprehensive
expense
Currency translation
differences - - (37,290) - (37,290)
-------------- -------------- ------------------ --------------- ---------------------
Total comprehensive
expense - - (697,226) - (697,226)
Balance at 31 May 2015 223,677 5,896,007 (1,734,025) (72,169) 4,313,490
============== ============== ================== =============== =====================
Unaudited
Balance at 1 December
2013 94,953 - (44,709) (72,159) (21,915)
Comprehensive income
Loss for the period - - (951,567) - (951,567)
-------------- -------------- ------------------ --------------- ---------------------
Total comprehensive
income for the period - - (951,567) - (951,567)
Share capital issues on
initial public
offering 53,485 3,289,315 - - 3,342,800
Cost of share issue - (924,648) - - (924,648)
-------------- -------------- ------------------ --------------- ---------------------
Balance at 31 May 2014 148,438 2.364,667 (996,276) (72,159) 1,444,670
============== ============== ================== =============== =====================
Audited
Balance at 1 December
2013 94,953 - (44,709) (72,159) (21,915)
Comprehensive income
Loss for the period - - (994,869) - (994,869)
-------------- -------------- ------------------ --------------- ---------------------
Total comprehensive
income for the period - - (994,869) - (994,869)
Acquired with new
subsidiary - - - (10) (10)
Share capital issues on
initial public
offering 59,889 3,598,553 - - 3,658,442
Cost of share issue - (924,648) - - (924,648)
-------------- -------------- ------------------ --------------- ---------------------
Balance at 30 November
2014 154,842 2,673,905 (1,039,578) (72,169) 1,717,000
============== ============== ================== =============== =====================
Share capital represents the amount subscribed for share capital
at nominal value.
Share premium represents the amount subscribed for share capital
in excess of nominal value and net if any issue costs.
The merger reverse relates to the share for share exchange
undertaken by the Company with Tekcapital Europe Limited on 18
February 2014.
Accumulated losses represent all other net gains and losses and
transactions with owners not recognised elsewhere.
Notes to the financial information
1. General information
The Company's registered office is at 5 Fleet Place, London,
EC4M 7RD. The nature of the Company's operations and its principal
activities are to act as the holding company of a group engaged in
the provision of international technology and intellectual property
services.
2. Basis of preparation
The financial information for the six months ended 31 May 2015
set out in this interim financial information is unaudited and does
not constitute statutory financial statements.
The interim condensed financial information has been presented
in US Dollars ("$").
The Directors do not propose a dividend for the period.
The Directors approved the interim financial information for the
six months ended 31 May 2015 on 19 August 2015.
Copies of the interim financial information will be available on
the Company's website: www.tekcapital.com.
The principal accounting policies used in preparing the interim
results are those the Group expects to apply in its financial
statements for the year ending 30 November 2015.
The Company was incorporated on 3 February 2014 and entered into
an agreement to acquire the entire issued and to be issued share
capital of Tekcapital Europe Limited on 18 February 2014. The
acquisition was effected by way of issue of shares.
In determining the appropriate accounting treatment for this
transaction, the Directors considered IFRS 3"Business Combinations"
(revised 2008). However, they concluded that this transaction fell
outside the scope of IFRS 3 (revised 2008) since the transaction
described above represents a combination of entities under common
control.
In accordance with IAS 8 "Accounting Policies, changes in
accounting estimates and errors", in developing an appropriate
accounting policy, the Directors have considered the pronouncements
or other standard setting bodies and specifically looked to
accounting principles generally accepted in the United Kingdom ("UK
GAAP") for guidance (FRS 6 - Acquisitions and Mergers) which does
not conflict with IFRS and reflects the economic substance of the
transaction.
Under UK GAAP, the assets and liabilities of both entities are
recorded at book value, not fair value (although adjustments are
made to achieve uniform accounting policies), intangible assets and
contingent liabilities are recognised only to the extent that they
are recognised by the legal acquirer in accordance with applicable
IFRS, no goodwill is recognised, any expenses of the combination
are written off immediately to the income statement and comparative
amounts, if applicable, are restated as if the combination had
taken place at the beginning of the earliest accounting period
presented.
Therefore, although the Group reconstruction did not become
unconditional until 18 February 2014, these consolidated financial
statements are presented as if the Group structure has always been
in place, including the activity from incorporation of the Group's
principal subsidiary. Both entities had the same management as well
as majority shareholders.
Furthermore, as the Company was incorporated on 3 February 2014,
while the Enlarged Group had been trading previously, the Statement
of Comprehensive Income and Consolidated Statement of Changes in
Equity and Consolidated Cash Flow Statements are proforma. On this
basis, the Directors have decided that it is appropriate to reflect
the combination using merger accounting principles as a group
reconstruction under FRS 6 - Acquisitions and Mergers in order to
give a true and fair view. No fair value adjustments have been made
as a result of the combination.
3. Taxation
No charge to taxation has arisen in the six month period ended
31 May 2015 (31 May 2014: GBPnil).
4. Loss per share
Basic earnings per share is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average
number of Ordinary Shares outstanding during the period.
In calculating the weighted average number of Ordinary Shares
outstanding (the denominator of the earnings per share calculation)
during the period in which the share transaction occurs:
-- The number of Ordinary Shares outstanding from the beginning
of that period to the acquisition date shall be computed on the
basis of the weighted average number of Ordinary Shares of the
legal acquiree (accounting acquirer) outstanding during the period
multiplied by the exchange ratio established in the merger
agreement; and
-- The number of Ordinary Shares outstanding from the
acquisition date to the end of that period shall be the actual
number of Ordinary Shares of the legal acquirer (the accounting
acquire) outstanding during the period.
The basic earnings per share for each comparative period before
the acquisition date presented in the consolidated financial
information following a share for share exchange shall be
calculated by dividing:
-- The profit or loss of the legal acquire attributable to
ordinary shareholders in each of those periods; by
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