(“Igraine” or the “Company”)
Unaudited Final Results to 31 December 2020
As the audited financial results for year-end December 31 2020 are expected to be published imminently, the Company will highlight any material difference that may occur between the unaudited final accounts and the audited accounts, when the audited report and accounts are announced.
The Company’s principal activity is that of an investment company listed on the Access Segment of the AQSE Growth Market (formerly the NEX Exchange Growth Market) with trading symbol AQSE:ANGP.
Since June 2017, the Company’s investment strategy has been focused on the service and technology sectors, including products related to social or life enhancement.
Following the restructuring process concluded in September 2020 and the appointment of Brian Jones as Non Executive Chairman, the Company has continued to support its existing investments, focused on the service and technology sectors (including products related to social or life enhancement), with a view to achieving exits where opportunities arise. The Company will narrow the focus of its investment strategy going forward, to target businesses and companies where the opportunity exists to develop complementary services that support the NHS in delivering high quality, patient focused, integrated care.
It is intended that the Company will, invest through a number of financial instruments including but not limited to; secured convertible loan notes, equity and to acquire shareholdings in UK based or overseas companies whose managements are proposing to seek a stock market quotation in the short/medium term, although the acquisition of minority interests in companies already admitted to the AIM Market of the London Stock Exchange or the AQSE Growth Market will not necessarily be precluded. The Directors will also consider investment opportunities where the natural exit strategy will be through a trade sale.
REVIEW OF BUSINESS
During the year to 31 December 2020 the Company made a loss before amortisation of preference shares of £359,236 (31 December 2019: loss of £2,798,129). Following Meetings of both classes of Shareholders the Company’s preference shares were converted into ordinary shares on 26 September 2020. This resulted in a write back to reserves of £4,549,491. This was after a charge of £278,980 from the half yearly accounts (31 December 2019: £557,959) is in respect of amortisation of those shares and an additional charge of £418,087 crystalised on the conversion of the shares. This write back arose as the amortisation of the preference shares, a non cash item, and was charged pro rata in the Company’s Income Statement until maturity of the preference shares which was due to take place on 31 March 2021 so that the preference share carrying value in the Company’s Statement of Financial Position equated to the full redemption value on maturity.
As at 31 December 2020, the Company had net liabilities per share totalling 0.01p (2019: 0.55p)
On 2 January 2019 the Company announced that £150,000 of secured convertible loan notes (“Loan Notes”) had been converted into equity representing 20% of the ordinary share capital of Wallet Ads.
Wallet Ads owns and operates a mobile engagement platform that combines mobile wallet passes (Apple Wallet / Google Pay), HTML5 web and social media (Facebook, Twitter, WhatsApp) technologies to enable brands to deliver digital vouchers or passes direct to consumers’ smartphones.
Wallet Ads became revenue generating in the latter half of 2019, although progress was mostly linked to test campaigns. Further development of the platform has stalled due to the limited working capital available to Wallet Ads with it requiring further investment which the Company has been unable to provide. The Directors propose to review this investment following the current share restructuring process.
In early January the Company received the final repayment of the loan monies previously advanced to Rapid Nutrition Plc (“Rapid”), a natural healthcare company focused on the research, development and production of a range of life science products. Rapid is presently listed on the SIX Swiss Exchange, Zurich, and has also applied for the dual admission of its existing issued shares to the OTCQB listing segment of the OTC Market.
As part of negotiations in recovering the loan in full the Company agreed to forgo any remaining costs and interest due on the loan in exchange for 232,010 fully paid these being in addition to 250,000 fully paid ordinary shares previously accepted in lieu of interest due on the loan.
The Company’s shareholding in Rapid represents a 0.8% holding. Rapid’s share price was USD 0.138 at 31 December 2020 with the movement in the share price leading to a fair value loss of £3,132 in the year.
We reported in 2017 that we had provided a loan facility, to X Markets Group Limited ("XMG"). XMG seeks to provide non-bank liquidity offering executable prices for a variety of mainly spot products which includes CFDs, FX, futures and equities. It streams prices to its clients who are forex and CFD brokers as well as tier-1 & tier-2 banks, brokers and other financial institutions (and exchanges) for their own clients’ order execution.
The Company continues to work with the director of XMG, who previously reported ongoing delays in securing funding needed to commence trading. This has continued to be the case in 2020.
The balance of the loan to XMG at 31 December 2020 was £178,776 of which £100,000 is secured by way of a personal guarantee provided by the director of XMG. Having reviewed this investment and in light of the developments during 2020 The Directors consider the full provision made against this loan in 2019 to continue to be appropriate although the Company will continue to seek to recover this balance.
In 2013 the Company invested in One Media (OME). Following numerous attempts to support the officers of OME in their efforts to stabilise the business, ultimately OME was been unable to secure additional funding to re-energise that business. In late 2019 the SEC suspended trading in OME and since that time the Directors have sought to refinance the business. In December 2020 they advised that their efforts had proved fruitless, partially affected by the difficulties caused by the COVID-19 crisis, and they had collectively stepped down. OME is now in the hands of the SEC who are likely to dissolve it in due course. Any monies due from this investment were fully written off as at 31 December 2019.
Just Bee Drinks
On the 10 April 2019 the Directors of Angelfish announced that the Company had agreed to subscribe £150,000 for 1,840,000 Ordinary A shares in Just Bee Drinks Limited (“Just Bee”). This investment, which forms part of a total equity fund raise of £292,000, represented an equity stake of 9.14% in Just Bee following completion of this funding round. In addition Angelfish agreed to provide a working capital loan to Just Bee supported by a first ranking fixed and floating debenture over the assets of Just Bee Drinks Ltd. To date this facility has not been called upon.
At the time of the investment, Just Bee produced a 100% natural juicy water drink, sweetened with a drop of honey. The brand was developed by beekeepers and also has a social and ethical mission to protect bees, helping to plant bee-friendly wildflower patches across the UK, with 5 million flowers planted to date.
The Covid-19 crisis saw a significant impact on sales as key customers streamlined their product lines. After significant Board discussions it was decided that the Company was to close down its drinks production and that they were to be replaced by a new range of vitamin honey products. Since this change in strategic direction, early sales growth has been very encouraging with a net profit being achieved in December 2020, in only the fourth month of trading. The Board have reviewed this investment in light of these developments in conjunction with the latest accounts and are of the view that this investment should be written down to £15,113 at 31 December 2020.
The Directors of Angelfish announced in May 2019 that the Company agreed to subscribe for up to £150,000 0% fixed rate secured convertible loan notes (“Notes”) issued by ASSIF Limited (“ASSIF”), a company that is developing a digital product related to employees’ mental health. The loan was to be provided in two equal sums, the second due when certain conditions were met and are supported by a first ranking legal charge over the assets of ASSIF.
The conversion will be for a maximum of 35% of the ordinary equity share capital of ASSIF, which will be reduced by 5% of the ordinary equity share capital in respect of a number of key milestones achieved prior to conversion to a minimum of 15%.
ASSIF is a mental health and wellness platform. It will primarily be a community for peer to peer support for people worried about mental health. Within the platform will be tools to help individuals with their mental health, including gamification and breathing videos. ASSIF is using cutting edge technology to deliver said tools and will have a consumer application and a business to business platform.
COVID – 19 has caused a number of inevitable delays to the early development of the platform although discussions with key major institutions, targeted as early adopters of the platform, continue to be constructive. In addition the delay in execting the previous plan for the platform and continuing discussions with potential early adopters have seen the platform change significantly from what was originally planned. During the year ASSIF identified the need for substantial further pre revenue investment and stated their intention to repay the loan plus interest and costs. Discussions are continuing at this time.
The Board have therefore reviewed this financial asset and have estimated that its fair value at 31 December 2020 was equal to cost. The primary justification for this is the fact that nothing has been noted to suggest that the fair value has fallen to below cost since the convertible loan notes were purchased.
On 18 June 2020, the Company entered into a framework agreement with Brian Jones under which he provided £30,000 of funding in the form of convertible loan notes and, subject to the conversion of the preference shares then in issue to ordinary shares, was to provide a further £20,000 of funding which would result in him holding 29.90% of the ordinary shares capital of the Company following the conversion of both the loan notes and the preference shares. This was completed on 29 September 2020.
POST-YEAR END REVIEW
Due to a late filing of the company’s final results for the Year Ending, 30 December 2019 the Company’s shares were suspended in 2020.
On April 26 2021, the Company completed a recapitalisation and Board change, introducing new Directors, Mr Simon Grant-Rennick and Mr Burns Singh Tennent-Bhohi. After the company’s Annual General Meeting held on 26 April 2021, Mr Brian Jones & Mr Ken Hillen resigned from the Board of Directors.
The injection of new capital and Directors, enabled the Company to review its existing financial position, its underlying assets and consider how best to progress and create value for shareholders of the company. I am pleased to report that on 11th June, the company announced and posted a Circular to convene a General Meeting to approve proposals and resolutions to create a premier medtech and biotech investment company that includes a conditional brokered financing for gross proceeds of, £2,000,500.
As at date of this report the Company confirms that the resolutions and proposals put to the shareholders of the company were duly passed.
£2,000,500 through the issue of, 77,519,230 new ordinary shares at a subscription price of, £0.025807. Putting the Company in a robust financial position.
Change of Corporate Advisor
The Company in line with the brokered placing, appointed Peterhouse Capital Limited as the Company’s Corporate Advisor & Corporate Broker
Sir Professor Christopher Evans (aged 63) – Executive Chairman
Professor Sir Christopher Evans is the founder and Chairman of Excalibur Group and a renowned scientist and highly successful entrepreneur with numerous prestigious awards and medals for his work over the last 30 years during which time he has built more than 50 medical companies from start-up and floated 20 new medical businesses on stock markets in six different countries. He has created 11 successful academic spin-outs and companies worth over $2.4 billion, and has raised $2.6 billion from disposals. He directed the raising of approximately $450 million for Merlin Biosciences Funds and $2.6 billion from disposals including the sale of BioVex Group, Inc. to Amgen Inc. and Piramed Limited to Roche Group. Through Merlin Ventures Limited, he co-founded and advised Biotech Growth Trust plc. Arakis Limited, one of the companies developed by Chris Evans was sold to Sosei Co. Ltd for $187 million. Chris Evans has founded notable companies such as Chiroscience, Celsis, ReNeuron, Vectura, Biovex and Merlin Biosciences Ltd. Appointed an OBE in 1995 for services to medical bioscience he was knighted in 2001 for services to bioscience and enterprise. Latterly he was founder of Arix Bioscience plc (LSE:ARX), of the oncology specialist Ellipses Pharma Limited and of Excalibur Healthcare Services Ltd.
Stephen “Steve” David Winfield (aged 28) - Executive Director
Stephen Winfield is currently the commercial director and a board director of Excalibur Healthcare Services Ltd. He has a track record of building, financing and selling various businesses from the ground up. His experience spans 9 years in building and managing teams across the technology, food and beverage and healthcare sectors, primarily alongside Professor Sir Christopher Evans OBE.
He has managed over £170m of transactions acting as a director of various companies and helped raise in excess of £20m to date for private businesses in the UK. More recently Stephen has been advising Scoffs Group (UK’s largest Costa Coffee franchisee).
Martin Walton (aged 57) – Executive Director
Martin Walton is currently Chairman and CEO, Bradshaw Consulting Ltd, a Strategic Advisory group assisting companies and shareholders in creating, generating and realising value from investments in life sciences and tech sectors. In 2020 he set up and now manages Excalibur Medicines Ltd to develop the AZD1656. He is a director of Interrad Medical, a Minneapolis-based medtech company.
Previously he was Vice Chairman of Simbec-Orion Group a specialist CRO which he sold to private equity for a 3x return. He has been Executive Chairman of Iota Sciences Ltd, a spin-out from Oxford University with revolutionary technology in microfluidics. With Professor Sir Chris Evans he assisted in founding Arix Bioscience in 2016 and listed it on the LSE in 2017. He was co-founder and CEO of Arthurian Life Sciences Ltd, the manager of the top-decile Wales Life Sciences Investment Fund, an innovative hybrid of private and public equity. He was CEO of Excalibur Group 2010 – 2016, and CEO of both Excalibur Fund Managers (Life Sciences VC / PE fund manager) and Excalibur Healthcare Services (provision of healthcare services and facilities). Prior to this he had a highly successful 25 year career in investment banking and investment management.
Adoption of New Investment Policy
The Company’s business strategy will be to source and develop breakthrough innovative technologies and commercially attractive discoveries in the healthcare and life science sector worldwide. The proposed Co-Investment Agreement will give the Company privileged access to attractive opportunities which have been sourced, selected and subjected to due diligence by sector experts.
Its objective will be to develop and commercialise these opportunities to provide attractive returns to its investors. The Company will do this through the sourcing and identification of promising technologies, the arrangement of appropriate financing for those technologies and experienced management oversight of the structured development of the technologies and, ultimately, their commercialisation.
The Company will execute its strategy by sourcing world class innovation from a rich pipeline of opportunities. The pipeline of opportunities will be derived from four key sources:
personal and professional networks - the Proposed Directors and senior leadership team bring high quality and extensive networks of personal, professional and industry contacts (including an extensive network of scientists and key opinion leaders in medicine both inside and outside pharmaceutical corporates). In particular, such extensive networks provide opportunities to pursue relationships with pharmaceutical companies which are both a potential source of innovative opportunities and as potential acquirers;
academia - contacts developed over many years with leading universities and other academic and research institutions globally provide direct access to innovative technologies, ahead of third parties;
the professional adviser market – links with Peterhouse Capital and others ensure we will see opportunities before the broader investor market will; and
fund managers – the Proposed Directors maintain close relationships with fund managers who can provide a source of innovative opportunities.
The new Executive Team will make such opportunities subject to a rigorous evaluation process. Initially there will be a high level assessment where the following criteria are considered:
a. does the technology have a potential market;
b. are there any competing technologies known to be under development;
c. at what stage of development is the technology;
d. basic assessment of intellectual property rights; and
e. vetting of the team or the business owning and managing the technology.
More detailed assessment will follow, typically after having entered a confidentiality agreement to review more substantial information in relation to proprietary technology. This would involve a direct consultation with the inventor(s), and technical and scientific validation by the Company’s proposed consultants.to ascertain the following:
f. whether the technology has breakthrough quality;
g. if the scientific base of the proposal is sound;
h. ownership of intellectual property rights in relation to the technology (including patentability, “freedom to operate” and identifying if any third party intellectual property rights are necessary for the further development and ultimate commercialisation of the innovation);
i. assessment of the suitability of the development of the technology from a regulatory perspective (in particular whether there are any potential reasons for refusing the licensing of a product candidate); and
j. to identify the requirements and approximate timing of achieving commercialisation.
If these pass muster then a final stage of due diligence would be undertaken to ascertain the available options to acquire an interest in the opportunity. Should an opportunity be available then a final stage is completed as follows:
k. legal due diligence as to intellectual property rights, including ownership, restrictions to operations and licence arrangement, corporate governance and existing financing arrangements;
l. clinical due diligence as to robustness and fitness for purpose of the clinical trials and the suitability of the CRO; any ethical and regulatory issues, requirements for permits and consents; – feasibility of key milestone achievement (such as a product candidate approval by relevant regulatory agencies) within pre-defined time frames and appropriateness of the proposed endpoints; and targeted disease indication;
m. commercialisation potential as to availability or achievability of CMC for Investigational New Drug applications (INDs) and New Drug Applications (NDAs); projected cost and location of product manufacturing; access to market and size of potential market; product pricing and projected time and rate of return on development costs; availability of one or more highly innovative product candidates, products or proprietary technologies targeting a significant medical and/or commercial need; and – presence of foreseeable sustainable competitive advantages;
n. financing arrangements as to adequacy of existing finance; assessment of financial strength of investors; and availability of funding
o. quality of the scientific and management credentials of the team
p. examination and possible adaptation of appropriate development plan and business plan.
Angelfish completed Co-Investment Rights with Excalibur Healthcare
Excalibur Healthcare Services has granted the Company rights to co-invest in all healthcare and life-science investment opportunities sourced or invested into by Excalibur Healthcare Services. As consideration for the granting to the Company of these co-investment rights, and the purchase of the 2% stake in EML, the Company has agreed to pay the vendors the following consideration;
£600,000 in cash, plus
£500,000 of new Deferred Shares in the Company at an issue price of 5p per share (approximately 2x the placing price). These Deferred Shares will not be admitted to trading on Aquis, will be non-transferable, and will have no rights attached. They will be cancelled on the 6-month anniversary of issue unless, within 30 calendar days of the publication of the results of the trial of the AZD1656 drug, the Board of Angelfish, at its sole discretion, unanimously agree that the trial has been a success and thus consent to the immediate conversion of all Deferred Shares into the equivalent number of new ordinary shares in the Company.
ABOUT EML INVESTMENT
Excalibur Medicines Ltd (“EML”) has secured exclusive rights to and owns the patents on a drug, AZD1656, which is being developed as a potential therapeutic for diabetics suffering from COVID-19. As there are very few new therapeutics in development for COVID-19 and associated virally transmitted diseases (most research is in combining existing treatments) this has the potential to be highly attractive to big pharma and biotech buyers. Further, if the trials are successful, it is likely the drug will be effective for the general population in Covid -19 and in other respiratory diseases. It was expected that the results of the Phase 2 trials of the drug - the ARCADIA trial – to assess the safety and efficacy of AZD1656 in 150 patients with either Type 1 or Type 2 diabetes who have been hospitalised with COVID-19, will be made public by mid-August 2021.
AZD1656 is a glucokinase (GK; hexokinase 4) activator which has been shown to reduce blood glucose for up to 4 months in humans. Diabetic patients admitted to hospital with COVID-19 often present with hyperglycaemia and are particularly vulnerable to progression to severe COVID-19. Treatment with AZD1656 (in addition to their usual care) may provide additional glucose control which could help improve clinical outcomes in both Type 1 and Type 2 diabetic populations.
In addition to its glucose lowering effect, AZD1656 may have additional benefits to COVID-19 patients via its effects on immune function. In many patients with severe COVID-19, an overreaction of the body's own immune system can cause severe problems including damage to the lungs and heart, which can lead to breathing problems necessitating intubation and ventilation. AZD1656 has been shown to activate the migration of T regulatory cells to sites of inflammation in preclinical experiments. This migration of Treg cells to inflamed tissue is crucial for their immune-modulatory function (Kishore et al (2017)). AZD1656 could enhance Treg migratory capacity and may prevent the development of cardiorespiratory complications observed in hospitalised patients with COVID-19, leading to lower requirements for oxygen therapy and assisted ventilation, and reduced incidences of pneumonia and acute respiratory distress syndrome (ARDS).
Diabetic patients hospitalised with COVID-19 have been randomised to receive either AZD1656 tablets or placebo tablets on a 1:1 basis until they are discharged from hospital or until they require intubation/mechanical ventilation. The aim of the study was to determine whether AZD1656 improves clinical outcomes in diabetic patients hospitalised with COVID-19. The World Health Organization (WHO) 8-point Ordinal Scale for Clinical Improvement will be used as the standard methodology for measuring patient outcomes.
As at date of publication, 156 patients have been recruited and have completed treatment. The data has now been assessed and outcomes will be reported formally on or about 9 September 2021. It is the intention of EML to seek a sale of the drug, a license or partnership deal as soon as possible after the data is published.
As at date of this report, the company has a well capitalisted treasury, newly constructed investment policy and has welcomed Directors that have been at the forefront of innovation and value creation in the medtech, life sciences and biotech industries.
On behalf of the Board
Simon Grant Rennick
Non Executive Director
On Behalf of the Board
The Directors of the Company, who have issued this RIS announcement after due and careful enquiry, accept responsibility for its content.
Martin Walton (Executive Director)
Steve Winfield (Executive Director)
AQSE Growth Market Corporate Adviser
Peterhouse Capital Limited
Guy Miller / Mark Anwyl
Tel: +44 (0) 207 469 0930
Ramsay Smith, Media House International
email@example.com: +44 (0) 7788414856
STATEMENT OF COMPREHENSIVE INCOME
Cost of sales
Other operating income
Loss before investment activities
Fair value decrease in investments
Other comprehensive income
Total comprehensive income attributable to equity holders of the company
Earnings per share for profit attributable to the equity shareholders
Basic and diluted earnings per ordinary share (p)
There are no recognised gains and losses other than those passing through the income statement.
Property, plant and equipment
Trade and other receivables falling due after more than one year
Short term investments
Trade and other receivables falling due within one year
Cash and cash equivalents
Equity and liabilities
Issued share capital
Trade and other payables
Approved by the Board for issue on 8 September 2021
Mr Simon Grant-Rennick
Balance at 31 December 2018
Loss for period
Other comprehensive income for the year
Total comprehensive income for the year
Balance at 31 December 2019
Profit for period
Issue of Ordinary Shares
Issue of A Deferred Shares
Issue of B Deferred Shares
Other comprehensive income for the year
Total comprehensive income for the year
Balance at 31 December 2020
Cash flow from operating activities
Net cash outflow from operating activities
Cash flows from investing activities
Purchase of plant, property and equipment
Purchase of non-current investments
Increase in short term investments
Net cash outflow from investing activities
Cash flow from financing activities
Preference dividends paid
Proceeds from share conversion
Proceeds from issue of shares
Net cash inflow from financing activities
Net increase/(decrease) in cash in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
A. RECONCILIATION OF PROFIT/(LOSS) BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS
Profit/(loss) before taxation
Amortisation adjustment on preference shares
Impairment of loan and trade receivables
Loss on financial assets FVTPL
Decrease/(increase) in trade and other receivables
(Decrease)/Increase in trade and other payables
Net cash outflow from operating activities
B. CASH AND CASH EQUIVALENTS
Year ended 31 December 2020
Cash and cash equivalents
Year ended 31 December 2019
Cash and cash equivalents