BUILDING ON A LEADING POSITION IN THE LIQUID BIOPSY MARKET
FDA SUBMISSION ON TRACK FOLLOWING POSITIVE RESULTS FROM BREAST CANCER CLINICAL STUDY
GUILDFORD, SURREY / ACCESSWIRE / July 31, 2019 / ANGLE plc (AIM: AGL OTCQX: ANPCY), a world leading liquid biopsy company, today announces unaudited results for the year ended 30 April 2019.
Operational Highlights
400 subject FDA clinical study enrolment using the Parsortix® system in metastatic breast cancer completed by four leading US cancer centres with positive primary and exploratory objectives announced post period end, a key milestone for the Company. FDA submission on track and expected early Q4 CY19
Extensive optimisation of HyCEADTM Ziplex® molecular analysis platform successfully completed, demonstrating exceptionally high sensitivity enabling the detection and characterisation of as low as a single cancer cell
Ovarian cancer clinical verification study established with leading US cancer centre. Pre-study phase completed successfully; 200 subject study expected to start in Q3 CY19
Leveraged partnership strategy delivers further validation, new uses and commercial progress with key developments in circulating tumour cell clusters
24,000 blood samples processed during the year (2018: 19,000) and an installed base of c.200 Parsortix instruments has led to a growing body of published evidence from internationally recognised cancer centres, with a further 10 peer reviewed publications during the year (2018: 6)
Financial Highlights
Loss for the year £8.9 million (2018: loss £7.5 million) reflecting planned investment
Revenue and grant income £0.9 million (2018: £0.7 million)
Cash balance at 30 April 2019 of £11.0 million (30 April 2018: £7.6 million)
Post year end fundraising of £18.0 million (£16.9 million net of expenses)
Garth Selvey, Non-Executive Chairman of ANGLE plc, commented:
“We announced the successful completion of the Company’s 400 subject FDA clinical study, with positive results after the period end, which is a key milestone for the business. Significant progress has also been made with the related analytical studies, such that ANGLE remains on course to submit its regulatory filing to the FDA during the current calendar year. Strong progress has also been made with our test for ovarian cancer in women with an abnormal pelvic mass; a 200 patient clinical verification study is expected to initiate in the third quarter, with completion expected in Q1 CY20.
The recent successful fundraise strengthens the balance sheet and provides us with a cash runway into the next phase of the Company’s development, which will include key product development activities and, for the first time, the establishment of a clinical laboratory offering Parsortix clinical tests.
We expect that the next 12 months will see several key milestones for the Company, with the prospect of FDA clearance in early CY20, and we look forward to updating the market as we progress the FDA clearance process as well as our ovarian cancer clinical verification study.”
Details of webcast
Please see https://angleplc.com/investor-relations/regulatory-news/ for details.
For further information ANGLE:
ANGLE plc
+44 (0) 1483 343434
Andrew Newland, Chief Executive
Ian Griffiths, Finance Director
finnCap Ltd (NOMAD and Joint Broker)
Corporate Finance – Carl Holmes, Simon Hicks, Max Bullen-Smith
ECM – Alice Lane, Sunila de Silva
+44 (0)20 7220 0500
WG Partners (Joint Broker)
Nigel Barnes, Nigel Birks, Andrew Craig, Chris Lee
+44 (0) 203 705 9330
FTI Consulting
Simon Conway, Ciara Martin
Matthew Ventimiglia (US)
+44 (0) 203 727 1000
+1 212 850 5624
For Frequently Used Terms, please see the Company’s website on http://www.angleplc.com/the-parsortix-system/glossary/
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the EU Market Abuse Regulation (596/2014). Upon the publication of this announcement via a regulatory information service, this information is considered to be in the public domain.
These Preliminary Results may contain forward-looking statements. These statements reflect the Board’s current view, are subject to a number of material risks and uncertainties and could change in the future. Factors that could cause or contribute to such changes include, but are not limited to, the general economic climate and market conditions, as well as specific factors including the success of the Group’s research and development and commercialisation strategies, the uncertainties related to regulatory clearance and the acceptance of the Group’s products by customers.
CHAIRMAN’S STATEMENT
Introduction
ANGLE has continued to strengthen its leading position in the liquid biopsy market. Most significantly, the positive results from its US clinical study examining the potential of the Parsortix system to harvest and enable the analysis of circulating tumour cells from metastatic breast cancer patients, reported just after the period end, and was a major milestone for the Company. The data will underpin the Company’s regulatory submission to the FDA to potentially enable the Parsortix system to be the first liquid biopsy platform to have FDA clearance specifically for the harvesting of intact circulating tumour cells for subsequent analysis. Significant progress has also been made with the related analytical studies.
The HyCEAD Ziplex platform was extensively optimised during the period and the team and infrastructure successfully integrated within the wider ANGLE operations. The platform was acquired in the prior financial year and provides multiplex gene expression analysis of cancer cells, complementing the capabilities of the Parsortix platform.
Meanwhile ANGLE’s collaborators and customers continued to demonstrate Parsortix’s versatility by developing important new applications. This work generated several new publications during the year increasing the body of peer-reviewed evidence supporting the platform.
Overview of Financial Results
Revenue and grant income of £0.9 million (2018: £0.7 million) came mainly from research use of the Parsortix system. Planned investment in studies to develop and validate the clinical application and commercial use of the Parsortix system increased, resulting in operating costs of £11.6 million (2018: £9.4 million). Thus, the loss for the year increased, as expected, to £8.9 million (2018: £7.5 million).
The cash balance was £11.0 million as at 30 April 2019 (30 April 2018: £7.6 million). The financial position was strengthened during the year with a placing of shares, which raised £12.7 million (£12.0 million net of expenses).
A further £18.0 million fundraising was completed post-period end (£16.9 million net of expenses), which has further extended the Company’s cash runway as we look towards FDA clearance and beyond. We are delighted with the support from both existing and new blue-chip investors.
Strategy
ANGLE has continued to make strong progress in its four-pronged strategy for achieving widespread adoption of its Parsortix system in the emerging multi-billion dollar liquid biopsy market:
Completion of rigorous large scale clinical studies run by leading cancer centres, demonstrating the effectiveness of different applications of the system in cancer patient care
Securing regulatory approval of the system with the emphasis on FDA clearance as the de facto global gold standard. ANGLE is seeking to be the first company ever to gain FDA clearance for a system which harvests circulating tumour cells (CTCs) from blood for subsequent analysis
Establishing a body of published evidence from leading cancer centres showing the utility of the system through peer reviewed publications, scientific data and clinical research evidence, highlighting a wide range of potential applications
Establishing partnerships with large healthcare companies for market deployment and development of multiple other clinical applications incorporating the Parsortix system.
Progress towards FDA clearance
ANGLE is seeking to become the first ever company to receive FDA Class II clearance for a product which harvests intact circulating tumour cells from patient blood for subsequent analysis. US regulatory clearance by the FDA is considered the global standard for approval of medical devices and diagnostics. ANGLE believes that such clearance would provide ANGLE’s Parsortix system with a further competitive differentiation, which would accelerate all forms of commercial adoption of the system in both research and clinical settings.
ANGLE has sustained a high level of resource commitment on its efforts to progress towards FDA clearance over several years.
During the year, the FDA clinical study enrolment was completed with four of the leading US cancer centres enrolling patients: University of Texas MD Anderson Cancer Center, University of Rochester Wilmot Cancer Center, University of Southern California Norris Comprehensive Cancer Center, and Robert H Lurie Comprehensive Cancer Center Northwestern University.
Shortly after the year end, positive results were reported that the Study had achieved its primary objective to demonstrate the ability of the Parsortix system to capture and harvest cancer cells from the blood of a significant proportion of metastatic breast cancer patients.
The Study has also achieved its exploratory goals by demonstrating that the cells harvested from patient blood using the Parsortix system could be interrogated using different subsequent analysis techniques. These analysis techniques include: Wright-Giemsa staining of cytospin preparations for cytopathological evaluation, fluorescent in situ hybridisation (FISH) for evaluation of HER2/neu amplification status, and RT-qPCR for evaluation of cancer related gene expression levels. The harvested cells were also able to be used for the generation of cDNA libraries of sufficient quality for use in RNA-seq evaluation.
Considerable progress has been made on the analytical studies required to make a comprehensive submission to FDA and this work is ongoing. As announced on 31 May, ANGLE’s ongoing discussions with FDA, as part of the De Novo process, recently identified additional analytical study experiments that will be needed to support FDA clearance. It is helpful that these requirements have been identified ahead of the submission to the agency. These additional studies have minimal cost and are expected to be completed to allow FDA submission in early Q4 CY19 offering the prospect of FDA clearance in early CY20. The timing of FDA regulatory clearance is dependent on the FDA’s review and response to our submission.
ANGLE estimates that the potential clinical market for Parsortix in metastatic breast cancer is worth US$2.4 billion per annum globally.
HyCEAD Ziplex downstream analysis technology
Following the successful study demonstrating best in class detection of the presence and absence of ovarian cancer with an accuracy (AUC-ROC) of 95.1%, in November 2017 ANGLE acquired the downstream molecular analysis platform HyCEAD Ziplex used to analyse the cells harvested by Parsortix.
During the year, extensive optimisation of the platform and its combination with Parsortix was successfully completed. A detailed market review has been completed to identify key user requirements for adoption of the test and work was completed to address these user requirements with key improvements including:
improved analytical sensitivity of the HyCEAD Ziplex platform enabling the detection of as low as a single cancer cell harvested by the Parsortix system from a 10ml blood sample
incorporation of assay controls and use of fractional sampling to demonstrate reproducibility and reliability of performance
development of methods to allow for patient blood sample processing with sufficient time for sample transportation after collection without significantly compromising the assay sensitivity, thus opening up the possibility for the test to be offered by a central laboratory.
The entire sample-to-answer process has been analytically verified using contrived samples and is now being tested in the clinical setting. Testing of the modified and further optimised Parsortix and HyCEAD Ziplex platforms has been successfully completed in the pre-study using known ovarian cancer patients and healthy volunteers to confirm the performance of various improvements to the process.
Large scale clinical studies
Ovarian cancer clinical application: triaging abnormal pelvic mass
Following the optimisation period, an ovarian cancer clinical verification study was established with University of Rochester Wilmot Cancer Center.
Following the recent successful completion of the initial testing phase, the blinded, independently controlled 200 subject verification study of the targeted population of pelvic mass patients prior to surgery is due to start imminently. The Study has been designed to evaluate performance of the predictive ovarian cancer detection assay in a new patient cohort and is expected to begin in Q3 CY19 and complete in Q1 CY20.
Once the new performance data is available and, assuming comparable results to the previous study, ANGLE intends to establish this test as a laboratory developed test (LDT) inhouse and/or with third party laboratories. The test has the potential to significantly improve patient outcomes whilst at the same time reducing overall healthcare costs.
ANGLE estimates that the total addressable market for its pelvic mass triage test for ovarian cancer is worth US$1 billion per annum.
Establishing a body of published evidence
Further strong progress was made this year in establishing a body of published evidence.
The Company’s strategy to secure research use adoption of the Parsortix system by leading cancer research centres, in order to get independent third parties driving development of new clinical applications, is working very well.
The installed base of Parsortix instruments was c.200 at 30 April 2019. Over 73,000 blood separations have now taken place using the Parsortix system, up from c.49,000 at 30 April 2018.
This deployment of Parsortix for research now means that the system is widely presented and discussed at leading cancer conferences around the world and, during the year, customers have developed ground-breaking new research using the system. An example of this was the breakthrough research into CTC clusters (groups of circulating cancer cells attached to one another and to some white blood cells). Work by the Cancer Metastasis Laboratory, University of Basel (Basel, Switzerland) was published in the leading peer-reviewed publications Cell, where Parsortix featured on the front cover, and Nature. Another great example was the CTC cluster work done by the Biomarker Research Program, Houston Methodist Research Institute (Houston, Texas, United States) in conjunction with the Center for Precision Health, University of Texas and MD Anderson Cancer Center, which was published in the International Journal of Molecular Sciences.
The CTC clusters work by both groups was enabled by the Parsortix system as the Parsortix system enabled the researchers to harvest CTC clusters for evaluation. It opens up a new research use area for the product and potentially identifies key routine clinical use for Parsortix, which may have a major impact on reducing mortality from cancer. ANGLE benefitted from the outcome of several £ million of third party funded research work as well as generating over £0.3 million of research use revenues for the Company.
During the year, there were a further 10 peer-reviewed publications and numerous posters and presentations at leading conferences. Publications that have been released publicly are available at https://angleplc.com/library/publications/. So far 22 separate cancer centres have published uniformly positive reports on their use of the Parsortix system.
Leading independent cancer centres throughout Europe and North America using ANGLE’s Parsortix system are working on developments in 22 different cancer types.
Progressing partnerships with large healthcare companies
Large scale deployment of the Parsortix system across numerous cancer types and application areas requires ANGLE to partner with large, global healthcare companies to take advantage of their distribution and sales channels and economic resources. Discussions are ongoing with companies in relevant fields: medtech companies, pharma companies, contract research organisations and reference laboratories (laboratories offering clinical tests). We expect to see our partnership programme accelerate on achieving FDA clearance for the system.
During the year, ANGLE has progressed its three key partnerships with large healthcare companies.
Abbott
Abbott’s proprietary PathVysion HER-2 DNA FISH Probe kits were utilised in ANGLE’s FDA clinical study for FISH (fluorescence in situ hybridization) analysis of circulating tumour cells. The process of analysis using FISH was successful and ANGLE is now pursuing commercial discussions with Abbott.
QIAGEN
During the year, the co-marketing agreement with QIAGEN progressed with a focus on the measurement of AR-V7 in prostate cancer. A joint poster publication was released at a leading international cancer conference and joint marketing material has been prepared. Next steps are currently being evaluated.
Philips
The collaborative research project with Philips to develop liquid biopsy solutions as part of a four year European Union research grant funded programme progressed successfully during the year. Philips has selected the Parsortix system as the only system to be used for harvesting CTCs within the programme. Breast and rectal cancers are being targeted.
Non-invasive prenatal testing (NIPT)
During the year ANGLE completed a pilot study demonstrating that the Parsortix system could harvest fetal cells from the blood of pregnant women. The detection of fetal abnormalities by analysis of fetal cells as opposed to cell free fetal DNA (tiny fragments of dead cells) could greatly extend the applicability of the process while addressing key limitations in existing approaches.
The NIPT market is expected to reach $1.0 billion in market size by 2022. ANGLE plans to progress commercialisation of Parsortix in this market through commercial partnerships with one or more large healthcare companies. Discussions are in progress with a number of such companies.
Outlook
The upcoming year is expected to see several key milestones for the Company.
The recent successful completion of the 400 subject FDA clinical study enrolment with positive results announced after the period end was a key milestone for the business and is being followed by work on the necessary FDA analytical studies. Work on these studies is advanced with the aim of making an FDA submission in early Q4 CY19 with the prospect of FDA clearance in early CY20.
Strong progress has also been made with the ovarian cancer test and the new clinical verification study is expected to complete in Q1 CY20.
The recent fundraise strengthens the balance sheet in preparation of the next phase of the Company’s development which will include key product development activities and the establishment of a clinical laboratory for the first time offering Parsortix clinical tests.
The Board and Management are pleased with the progress made during the period and look forward to updating the market as key milestones are achieved.
Garth Selvey
Chairman
30 July 2019
ANGLE PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2019
2019
2018
(Unaudited)
(Audited)
Note
£’000
£’000
Revenue
678
628
Cost of sales
(155)
(169
)
Gross profit
523
459
Other operating income
175
52
Operating costs
(11,597)
(9,444
)
Operating profit/(loss)
(10,899)
(8,933
)
Net finance income/(costs)
28
8
Profit/(loss) before tax
(10,871)
(8,925
)
Tax (charge)/credit
5
1,939
1,387
Profit/(loss) for the year
(8,932)
(7,538
)
Other comprehensive income/(loss)
Items that may be subsequently reclassified to profit or loss:
Exchange differences on translating foreign operations
72
(99
)
Other comprehensive income/(loss)
72
(99
)
Total comprehensive income/(loss) for the year
(8,860)
(7,637
)
Profit/(loss) for the year attributable to:
Owners of the parent
(8,942)
(7,556
)
Non-controlling interests
10
18
Profit/(loss) for the year
(8,932)
(7,538
)
Total comprehensive income/(loss) for the year attributable to:
Owners of the parent
(8,822)
(7,702
)
Non-controlling interests
(38)
65
Total comprehensive income/(loss) for the year
(8,860)
(7,637
)
Earnings/(loss) per share attributable to owners of the parent
Basic and Diluted (pence per share)
6
(6.56)
(7.91
)
All activity arose from continuing operations.
ANGLE PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 APRIL 2019
Note
2019
2018
(Unaudited)
(Audited)
£’000
£’000
Assets
Intangible assets
7
6,833
5,588
Property, plant and equipment
1,347
1,475
Inventories
988
599
Trade and other receivables
942
828
Taxation
1,900
2,147
Cash and cash equivalents
11,010
7,645
Total assets
23,020
18,282
Liabilities
Trade and other payables
(3,684)
(2,398
)
Total liabilities
(3,684)
(2,398
)
Net assets
19,336
15,884
Equity
Share capital
8
14,349
11,709
Share premium
52,805
43,449
Share-based payments reserve
1,266
1,072
Other reserve
2,553
2,553
Translation reserve
106
(14
)
Retained earnings
(51,641)
(42,129
)
ESOT shares
(102)
(102
)
Equity attributable to owners of the parent
19,336
16,538
Non-controlling interests
8
–
(654
)
Total equity
19,336
15,884
ANGLE PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2019
2019
2018
(Unaudited)
(Audited)
£’000
£’000
Operating activities
Profit/(loss) before tax from continuing operations
(10,871)
(8,925
)
Adjustments for:
Depreciation of property, plant and equipment
622
446
(Profit)/loss on disposal of property, plant and equipment
8
1
Amortisation and impairment of intangible assets
452
344
Share-based payments
332
324
Exchange differences
(14)
(33
)
Net finance (income)/costs
(28)
(8
)
Operating cash flows before movements in working capital
(9,499)
(7,851
)
(Increase)/decrease in inventories
(583)
(83
)
(Increase)/decrease in trade and other receivables
(91)
(106
)
Increase/(decrease) in trade and other payables
608
727
Operating cash flows
(9,565)
(7,313
)
Research and development tax credits received
2,251
501
Net cash from/(used in) operating activities
(7,314)
(6,812
)
Investing activities
Purchase of property, plant and equipment
(219)
(1,031
)
Purchase of intangible assets
(1,133)
(830
)
Acquisition of assets and business
–
(3,613
)
Interest received
28
8
Net cash from/(used in) investing activities
(1,324)
(5,466
)
Financing activities
Net proceeds from issue of share capital
11,996
14,391
Net cash from/(used in) financing activities
11,996
14,391
Net increase/(decrease) in cash and cash equivalents
3,358
2,113
Cash and cash equivalents at start of year
7,645
5,536
Effect of exchange rate fluctuations
7
(4
)
Cash and cash equivalents at end of year
11,010
7,645
ANGLE PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2019
———————- Equity attributable to owners of the parent —————
Share-based
Share
Share
payments
Other
Translation
capital
premium
reserve
reserve
reserve
£’000
£’000
£’000
£’000
£’000
At 1 May 2017 (Audited)
7,482
33,285
822
2,553
132
For the year to 30 April 2018
Consolidated profit/(loss)
Other comprehensive income/(loss):
Exchange differences on translating foreign operations
(146)
Total comprehensive income/(loss)
(146)
Issue of shares (net of costs)
4,227
10,164
Share-based payments
324
Released on forfeiture
(74
)
At 30 April 2018 (Audited)
11,709
43,449
1,072
2,553
(14)
For the year to 30 April 2019
Consolidated profit/(loss)
Other comprehensive income/(loss):
Exchange differences on translating foreign operations
120
Total comprehensive income/(loss)
120
Issue of shares (net of costs)
2,640
9,356
Share-based payments
332
Released on forfeiture
(138
)
Acquisition of non-controlling interest
At 30 April 2019 (Unaudited)
14,349
52,805
1,266
2,553
106
——- Equity attributable to owners of the parent ———
Total
Non-
Retained
ESOT
Shareholders’
controlling
Total
earnings
shares
equity
interests
equity
£’000
£’000
£’000
£’000
£’000
At 1 May 2017 (Audited)
(34,647)
(102)
9,525
(719)
8,806
For the year to 30 April 2018
Consolidated profit/(loss)
(7,556
)
(7,556
)
18
(7,538
)
Other comprehensive income/(loss):
Exchange differences on translating foreign operations
(146
)
47
(99
)
Total comprehensive income/(loss)
(7,556)
(7,702)
65
(7,637)
Issue of shares (net of costs)
14,391
14,391
Share-based payments
324
324
Released on forfeiture
74
–
–
At 30 April 2018 (Audited)
(42,129)
(102)
16,538
(654)
15,884
For the year to 30 April 2019
Consolidated profit/(loss)
(8,942
)
(8,942
)
10
(8,932
)
Other comprehensive income/(loss):
Exchange differences on translating foreign operations
120
(48
)
72
Total comprehensive income/(loss)
(8,942)
(8,822)
(38)
(8,860)
Issue of shares (net of costs)
11,996
11,996
Share-based payments
332
332
Released on forfeiture
138
–
–
Acquisition of non-controlling interest
(708
)
(708
)
692
(16
)
At 30 April 2019 (Unaudited)
(51,641)
(102)
19,336
–
19,336
ANGLE PLC
NOTES TO THE PRELIMINARY ANNOUNCEMENT
FOR THE YEAR ENDED 30 APRIL 2019
1 Preliminary announcement
The preliminary announcement set out above does not constitute ANGLE plc’s statutory Financial Statements for the years ended 30 April 2019 or 2018 within the meaning of section 434 of the Companies Act 2006.
The financial information for the year ended 30 April 2019 is unaudited and an auditor’s report has not yet been issued. Statutory audited financial statements for the year will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement.
The financial information for the year ended 30 April 2018 is derived from the audited financial statements for that year, which have been delivered to the registrar of companies, and the auditor’s report on the consolidated Financial Statements for the year ended 30 April 2018 is unqualified and does not contain statements under s498(2) or (3) of the Companies Act 2006.
The accounting policies used for the year ended 30 April 2019 are unchanged from those used for the statutory Financial Statements for the year ended 30 April 2018, except as referred to in Note 2. The 2019 statutory accounts will be delivered to the Registrar of Companies following the Company’s Annual General Meeting.
2 Compliance with accounting standards
While the financial information included in this preliminary announcement has been computed in accordance with the measurement principles of IFRS, this announcement does not itself contain sufficient information to comply with IFRS.
Accounting standards adopted in the year
No new accounting standards that have become effective and adopted in the year have had a significant effect on the Group’s Financial Statements.
Accounting standards issued but not yet effective
At the date of authorisation of the Financial Statements, there were a number of other Standards and Interpretations (International Financial Reporting Interpretation Committee – IFRIC) which were in issue but not yet effective, and therefore have not been applied in these Financial Statements. The Directors have not yet assessed the impact of the adoption of these standards and interpretations for future periods.
A number of other accounting policies have been slightly amended and updated for readability.
3 Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance and financial position are set out in the Chairman’s Statement.
The Directors have prepared and reviewed the financial projections for the 12 month period from the date of signing of these Financial Statements. Based on the level of existing cash, agreed funding, the projected income and expenditure (the timing of some of which is at the Group’s discretion) and other potential sources of funding, the Directors have a reasonable expectation that the Company and Group have adequate resources to continue in business for the foreseeable future. Accordingly the going concern basis has been used in preparing the Financial Statements.
4 Critical accounting estimates and judgements
The preparation of the Financial Statements requires the use of estimates, assumptions and judgements that affect the reported amounts of assets and liabilities at the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates, assumptions and judgements are based on the Directors’ best knowledge of the amounts, events or actions, and are believed to be reasonable, actual results ultimately may differ from those estimates.
The estimates, assumptions and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are described below.
Valuation and amortisation of internally-generated intangible assets (Note 7)
IAS 38 Intangible Assets contains specific criteria that if met mean development expenditure must be capitalised as an internally generated intangible asset. Judgements are required in both assessing whether the criteria are met (for example, differentiating between enhancements and maintenance) and then in applying the rules (for example, determining an estimated useful life). Intangible assets are amortised over their useful lives. Useful lives are assessed by reference to observable data (for example, remaining patent life) and taking into consideration specific product characteristics (for example, product life cycle) and market characteristics (for example, estimates of the period that the assets will generate revenue). Each of these factors is periodically reviewed for appropriateness. Changes to estimates in useful lives may result in significant variations in the amortisation charge.
Impairment of intangible assets (Note 7)
The Group is required to review, at least annually, whether goodwill has suffered any impairment and whether the carrying amount may exceed the recoverable amount.
The Group is required to review, at least annually, whether there are indications (events or changes in circumstances) that intangible assets excluding goodwill have suffered impairment and that the carrying amount may exceed the recoverable amount. If there are indications of impairment then an impairment review is undertaken.
The recoverable amount is the higher of the asset’s fair value less costs to sell and its value-in-use for the cash-generating unit giving rise to the intangible assets. The value-in-use method requires the estimation of future cash flows and the selection of a suitable discount rate in order to calculate the present value of these cash flows. When reviewing intangible assets for impairment the Group has had to make various assumptions and estimates of individual components and their potential value and potential impairment impact. The Group considers that for each of these variables there is a range of reasonably possible alternative values, which results in a range of fair value estimates. None of these estimates of fair value is considered more appropriate or relevant than any other and therefore determining a fair value requires considerable judgement.
Share-based payments
In calculating the fair value of equity-settled share-based payments the Group uses an options pricing model. The Directors are required to exercise their judgement in choosing an appropriate options pricing model and determining input parameters that may have a material effect on the fair value calculated. These input parameters include, among others, expected volatility, expected life of the options taking into account exercise restrictions and behavioural considerations of employees, market related performance conditions, the number of options expected to vest and liquidity discounts.
Research and development tax credit (Note 5)
The Directors make their best estimate of qualifying R&D expenditure to calculate the R&D tax credit. The interpretation of qualifying expenditure requires judgement.
5 Tax
The Group undertakes research and development activities. In the UK these activities qualify for tax relief and result in research and development tax credits.
6 Earnings/(loss) per share
The basic and diluted earnings/(loss) per share is calculated by dividing the after tax loss for the year attributable to the owners of the parent of £8.9 million (2018: £7.6 million).
In accordance with IAS 33 Earnings per share 1) the “basic” weighted average number of ordinary shares calculation excludes shares held by the Employee Share Ownership Trust (ESOT) as these are treated as treasury shares and 2) the “diluted” weighted average number of ordinary shares calculation considers potentially dilutive ordinary shares from instruments that could be converted. Share options are potentially dilutive where the exercise price is less than the average market price during the period. Due to the losses in 2019 and 2018, share options are non-dilutive for those years as adding them would have the effect of reducing the loss per share and therefore the diluted loss per share is equal to the basic loss per share.
The basic and diluted earnings/(loss) per share are based on 136,398,468 weighted average ordinary £0.10 shares (2018: 95,500,762).
7 Intangible assets
Total
£’000
Cost
At 1 May 2017
2,648
Additions
651
Acquisition of assets
3,421
Disposals
(1
)
Exchange movements
(105
)
At 30 April 2018
6,614
Additions
1,653
Disposals
(3
)
Exchange movements
92
At 30 April 2019
8,356
Amortisation and impairment
At 1 May 2017
730
Charge for the year
341
Disposals
(1
)
Impairment
3
Exchange movements
(47
)
At 30 April 2018
1,026
Charge for the year
405
Disposals
(3
)
Impairment
47
Exchange movements
48
At 30 April 2019
1,523
Net book value
At 30 April 2019
6,833
At 30 April 2018
5,588
Intangible assets arising as a result of the business combination in the prior year comprise the fair value of the identifiable intangible assets and the goodwill arising at the date of acquisition. Identifiable intangible assets excluding goodwill are amortised over their estimated useful economic life. Goodwill is deemed to have an indefinite useful life, is carried at fair value and is not amortised. Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate a potential impairment.
Internally-generated intangible assets comprises intellectual property (patents) and product development costs capitalised in accordance with IAS 38 Intangible Assets. Capitalised product development costs are directly attributable costs comprising cost of materials, specialist contractor costs, labour and overheads. Product development costs are amortised over their estimated useful lives commencing when the related new product is in commercial production. Development costs not meeting the IAS 38 criteria for capitalisation continue to be expensed through the Statement of Comprehensive Income as incurred.
The carrying value of intangible assets excluding goodwill is reviewed for indications of impairment whenever events or changes in circumstances indicate that the carrying value may exceed the recoverable amount. The recoverable amount is the higher of the asset’s fair value less costs to sell and its “value-in-use”. The key assumptions to assess value-in-use are the estimated useful economic life, future revenues, cash flows and the discount rate to determine the net present value of these cash flows. Where value-in-use exceeds the carrying value then no impairment is made. Where value-in-use is less than the carrying value then an impairment charge is made.
Amortisation and impairment charges are charged to operating costs in the Consolidated Statement of Comprehensive Income.
8 Share capital
The Company has one class of ordinary shares which carry no right to fixed income and at 30 April 2019 had 143,486,522 ordinary shares of £0.10 each allotted, called up and fully paid (2018: 117,086,522).
The Company issued 25,400,000 new ordinary shares with a nominal value of £0.10 at an issue price of £0.50 per share in a placing and subscription, realising gross proceeds of £12.7 million (£12.0 million net of expenses). Shares were admitted to trading on AIM in July and August 2018.
The Company issued 1,000,000 new ordinary shares with a nominal value of £0.10 in consideration for the remainder of the original inventor’s shares in ANGLE North America Inc. Shares were admitted to trading on AIM in November 2018. As a consequence all subsidiaries are now 100% owned and there are no longer any non-controlling interests.
Post the reporting date the Company completed a fundraise. The fundraise resulted in the issue of 29,268,294 new ordinary shares with a nominal value of £0.10 at an issue price of £0.615 per share in a placing for shares realising gross proceeds of £18.0 million (£16.9 million net of expenses). The General Meeting of 12 July 2019 approved the transaction and Shares were admitted to trading on AIM in July 2019 resulting in a total issued share capital of 172,754,816.
9 Shareholder communications
Copies of this announcement are posted on the Company’s website www.ANGLEplc.com.
The Annual General Meeting of the Company will be held at 2:00pm on Wednesday 30 October 2019 at ANGLE plc, 10 Nugent Road, the Surrey Research Park, Guildford, GU2 7AF. Notice of the meeting will be enclosed with the audited Statutory Financial Statements.
The audited Statutory Financial Statements for the year ended 30 April 2019 are expected to be distributed to shareholders by 4 October 2019 and will subsequently be available on the Company’s website or from the registered office, 10 Nugent Road, Surrey Research Park, Guildford, GU2 7AF.
This preliminary announcement was approved by the Board on 30 July 2019.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
SOURCE: ANGLE plc
ReleaseID: 554073
