TIDMFFWD
RNS Number : 1442I
FastForward Innovations Limited
10 December 2020
FastForward Innovations Ltd / AIM: FFWD / Sector: Closed End
Investments
10 December 2020
FastForward Innovations Ltd ("FastForward", "FFWD" or the
"Company")
Interim Results
FastForward Innovations Ltd, the AIM quoted company focusing on
making investments in fast growing and industry leading businesses,
is pleased to announce its interim results for the six months ended
30 September 2020. A copy of this announcement and the Interim
Results will be available on the Company's website, www.fstfwd.co
.
Highlights from Investments
-- EMMAC announced the UK manufacture of its range of premium medical cannabis products
-- Juvenescence announced a new joint venture with G3
Therapeutics, a trailblazer biotechnology company leveraging
biological big data for drug discovery and development and is
making plans to take the company public in the next 12 months
-- Leap Gaming expanded its extensive list of partnerships and
agreements during the period with the addition of 888casino in
June, Stoixman/Betano in July, and Vivo Gaming in August and is
exploring its options to list in 2021
-- Portage's pipeline of projects under development, including
research and treatments for various cancers, eye disease and acute
kidney injury, is progressing well, and it is on target to have
three products in clinical testing by the end of 2020
-- TSXV traded Globalive Technology Inc. is pursuing a Reverse
Takeover Transaction with Yooma Corp.
Chairman's Statement
Against the backdrop of the COVID-19 pandemic, we have seen
varying performances across our portfolio of investee companies
during the period under review. However, reflective of our new
investing policy implemented in July, the liquidity of our
portfolio is becoming more balanced and a number of our investments
have performed very well during this period of uncertainty. With
this background, we were delighted to have completed a placing post
period end, in October 2020, raising funds of approximately GBP2
million with both new and existing shareholders. This was an
endorsement of our core objective of providing investors with
exposure to disruptive growth opportunities that have near-term
re-rating potential and would otherwise be inaccessible and
provided sufficient funds to allow us invest in opportunities in
line with this strategy.
Certain investments in the technology space flourished during
the period, in particular Leap Gaming, which has seen significant
growth with the absence of real sporting events meaning many people
have turned to virtual sports as an alternative. Leap Gaming
expanded its extensive list of partnerships and agreements during
the period with the addition of 888casino in June, Stoixman/Betano
in July and Vivo Gaming in August. In addition to this, the Malta
Gaming Authority, one of the most respected licencing authorities,
granted Leap Gaming a Game Supply Licence, which is seen globally
as a vote of confidence in the company. This was a major
achievement for Leap Gaming and should unlock a significant number
of opportunities in new territories as it advances toward its
objective of becoming the content partner of choice for top gaming
operators around the world. Post period end, in November 2020 we
announced that Ed McDermott has been appointed to the Board of Leap
Gaming as a Non-Executive Director to support the company as it
explores its options to list in 2021.
Portage Biotech inc., one of our investments in the
biotechnology sector, has also shown promise during the period
under review. Since trading of its common shares on the Canadian
Stock Exchange resumed on 15 April 2020, Portage has made
additional investments into two of its portfolio companies and
raised more than US$6.9 million through a non-brokered private
placement. Most recently, post period end, Portage's subsidiary,
Intensity Therapeutics, announced new efficacy and safety data from
the ongoing Phase 1/2 clinical study on INT230-6, the company's
lead product candidate, in patients with advanced solid tumours.
Kaplan Meier analysis shows a 79.1% survival probability estimate
at one year when doing a volume of INT230-6 of >=50% of the
baseline tumour burden, supporting the hypothesis that dosing a
substantial proportion of a patient's tumour burden with INT230-6
may provide the patient with extended survival. We look forward to
providing further updates as this study continues to progress.
Whilst we continue to support and develop our portfolio of
existing investments in the life sciences and technology sectors,
our future investment focus is increasingly leaning towards
capitalising on our knowledge in the health, wellness and medical
cannabis arenas.
We have already had success in this sector with our investment
in EMMAC Life Sciences, which continues to strengthen its position
as one of Europe's largest medical cannabis company. In August
2020, the company secured its Good Distribution Practice licence
for its Swiss pharmaceutical entity, EMMAC SAGL, meaning it now has
the ability to import, distribute and export medicinal products,
including medical cannabis, for the domestic Swiss EU and
international markets which it intends to launch in 2021. Post
period end in October 2020, EMMAC announced the UK manufacture of
its range of premium medical cannabis products. Due to the
completion of the company's 'seed to sale' vertically integrated
business model that comprises cultivation, extraction, production
and distribution, medical cannabis is now more affordable for
patients in the UK.
Our investment in Yooma, Asia's first HEMP and CBD Lifestyle
company, is also showing promise since the restructuring of our
initial investment in Yooya on 23 April 2020 and subsequent further
$1 million cash investment made into Yooma on 18 May 2020.
Significantly, in September 2020 Globalive Technology Inc. (TSXV:
LIVE), a technology company based in Toronto, Ontario, announced
its intention to complete a Reverse Takeover Transaction with
Yooma, which if successfully completed would enhance the liquidity
of FastForward's holding significantly. Post period end, in
November 2020, Yooma also announced the launch of clean CBD beauty
brands M SK Skincare and Lab to Beauty on BorderX Lab's China
cross-border eCommerce app, Beyond, in advance of Black Friday. We
are delighted to see that Yooma is using its first mover advantage
in this market and look forward to providing updates regarding its
commercial developments and the proposed merger with Globalive
Technology.
We are currently one of the only London listed vehicles that
provides exposure to this market and particularly in light of the
recent guidance from the FCA in relation to potential applications
seeking admission to the Official List in the medical
cannabis-related sector, have huge confidence for future returns. I
look forward to providing updates on EMMAC, Yooma and any potential
new investments in the space.
Looking at our portfolio as a whole, four of our investee
companies are now gearing up for potential liquidity events which,
if successful, would crystalise the value of our investments
significantly. As mentioned above, there is the potential of an RTO
with Yooma and Globalive Technology Inc.; Leap Gaming is exploring
its options to list in 2021; Juvenescence is making plans to take
the company public in the next 12 months; and EMMAC is also
reviewing its strategic options. With several potential liquidity
events in the pipeline, I am very excited about our investment
portfolio going into 2021 and look forward to updating shareholders
as and when material developments occur with respect to any of
these opportunities.
The importance of our strategy to invest in a diverse portfolio
becomes apparent when we consider other companies in our portfolio,
which have not experienced the same success. For example,
blockchain innovations company, Factom, has faced many issues in
recent months. In August 2020, the revised Chapter 11 Plan of
Reorganisation for the company which we worked on with Factom,
allowing for FastForward's US$6 million SAFE note to be converted
into equity in the company, was approved by the court and
shareholders of Factom. However, as we prepared for when we took
the decision to write this investment down to zero last year, our
understanding is that there is little chance that Factom will
recover without some level of corporate restructuring and
investment.
Our investment in the Diabetic Boot Company has also experienced
financial difficulties and, whilst historically written down to
nil, unfortunately the company notified us that it has gone into
administration on 22 October 2020.
On the corporate side, in May 2020, Lorne Aborny stepped down as
Chairman and CEO of the Company to pursue other business interests
which include several of our investee companies. At the same time,
I was appointed as Non-Executive Chairman and Ed McDermott was
appointed Chief Executive Officer. We also appointed Shard Capital
Partners LLP as our new broker during the period, as announced on
22 September 2020.
Results
The net assets of the Company at 30 September 2020 were
GBP15,224,000 (31 March 2020: GBP14,238,000), equal to net assets
of 9.43p per Ordinary Share (31 March 2020: 8.82p per Ordinary
Share).
Looking ahead, as I mentioned previously, whilst we will
continue to support our investments in the life sciences and
technology spaces, we are increasingly streamlining our investment
focus into areas where we have significant expertise, namely
primarily health, wellness and medical cannabis. We have a solid
track record in the medical cannabis space and are confident that
with the recent guidance from the FCA there are a number of both
early and late stage opportunities that have the potential to
deliver value for our shareholders. I look forward to providing
further updates with regard to the continued development of our
core assets and potential new opportunities in this space.
Ian Burns
Non-Executive Chairman
Report of the Chief Executive Officer
Introduction
Notwithstanding a period of increased challenges faced by all
businesses, we have remained dedicated to supporting the continued
growth of our investee companies and maintained focus on our
strategy to bring investment opportunities often reserved for
venture capital firms to the average investor. The support that we
received from both new and existing shareholders in our successful
fundraising in October is an endorsement of our team and our
investment strategy including a focus on new medical cannabis based
opportunities.
Performance and valuation
The Company's Net Asset Value ("NAV") per share at the end of
the period improved to 9.43p per share from 8.82p at 31 March 2020
thanks, in part, to the acquisition of Yooya Media by, and our
subsequent investment in, Yooma Corp and the continued growth of
Leap Gaming.
Portfolio
The table below lists the Company's holdings as at 30 September
2020 and 31 March 2020.
Holding Share Category Country Number Valuation Number Valuation
Class of of Shares at 30 September of shares at 31
Incorporation Held at 2020 held at March
30 GBP,000 31 March 2020
September 2020 GBP'000
2020
--------------- ----------- ------------- ---------------- ---------- ----------------- ----------- ----------
Biotech
Juvenescence Series /
Limited A Healthcare BVI 128,205 2,468 128,205 2,561
--------------- ----------- ------------- ---------------- ---------- ----------------- ----------- ----------
EMMAC Life Biotech
Sciences /
Ltd Ordinary Healthcare England 6,666,667 2,400 6,666,667 2,400
--------------- ----------- ------------- ---------------- ---------- ----------------- ----------- ----------
Factom, Series Blockchain
Inc. Seed Tech USA 400,000 - 400,000 -
---------------
Series Blockchain USA 5,911,330 - - -
A Tech
--------------- ----------- ------------- ---------------- ---------- ----------------- ----------- ----------
Fralis LLC
(Leap Gaming) Units Gaming Nevis 1,512 7,357 1,512 7,148
---------------
Loan N/A 111 - -
--------------- ----------- ------------- ---------------- ---------- ----------------- ----------- ----------
Series
Seed Media
Yooya Media Prefered and Content BVI - - 27,255 50
--------------- ----------- ------------- ---------------- ---------- ----------------- ----------- ----------
Common
Yooma Corp. Shares CBD Wellness Canada 3,588,078 2,075 - -
--------------- ----------- ------------- ---------------- ---------- ----------------- ----------- ----------
Portage Biotech
Biotech /
Inc. Ordinary Healthcare BVI 104,906 817 12,980,610 946
--------------- ----------- ------------- ---------------- ---------- ----------------- ----------- ----------
Vemo Pref
Education, Series
Inc. Seed 2 Edtech USA 1,000,000 257 1,000,000 267
--------------- ----------- ------------- ---------------- ---------- ----------------- ----------- ----------
The Diabetic Biotech
Boot Company /
Limited Ordinary Healthcare England 25,978 - 25,978 -
--------------- ----------- ------------- ---------------- ---------- ----------------- ----------- ----------
Valuation Valuation
at 30 September at 31
2020 March
GBP,000 2020
GBP'000
Total Investment Value 15,485 13,372
Cash and receivables, net of payables
and accruals -261 866
Net Asset
Value 15,224 14,238
================= =========== ==========
EMMAC Life Sciences Plc (investment position: 15.76% of NAV) ,
one of Europe's largest medical cannabis company by territory,
brings together cutting-edge scientific research with the latest
innovations in cannabis cultivation, extraction, and
production.
During the period, EMMAC was particularly busy, achieving
several 'firsts': It acquired pharmaceutical wholesaler and
narcotics handling permits for Germany, Europe's largest medical
cannabis market; became the first European cannabis company
licensed to manufacture medical cannabis extracts as active
pharmaceutical ingredients with delta 9-tetrahydrocannabinol for
commercial purposes; joined a consortium led by University of
Valencia to investigate T12 molecule as treatment for Coronavirus;
secured approval to cultivate medical cannabis in Spain; and
obtained a licence to import, distribute and export medicinal
products for domestic, EU and international markets.
Post period end, in October 2020 EMMAC announced the UK
manufacture of its range of premium medical cannabis products, with
a feature covering the company on the BBC in relation to the
affordability of its products as a result of its vertically
integrated approach. EMMAC had explored combining its business with
Andina Acquisition Corp. III (NASDAQ: ANDA, ANDAW, and ANDAU),
however, discussions were mutually terminated as it was not
possible to finalise the negotiations to the satisfaction of both
parties. Recent momentum in Europe, including the announcement by
the UKLA with regards cannabis listings, means that EMMAC is in a
favourable position to review the strategic options available to
the business and maximise value for its shareholders.
Juvenescence Ltd (investment position: 16.21% of NAV) is a
biopharmaceutical company with a pipeline of therapeutic assets
focused on therapies to modify aging and increase healthy human
longevity, developed in joint ventures with scientists and leading
research institutions.
During the period, Juvenescence announced a new joint venture
with G3 Therapeutics, a trailblazer biotechnology company
leveraging biological big data for drug discovery and development,
to develop validated nutraceuticals and medicines to combat aging
and aging-related diseases such as those of the musculoskeletal
system. It also signed an agreement with Evgen Pharma to license
its sulforaphane stabilization technology for use in several
non-pharmaceutical applications and create an innovative new
product for the global consumer nutritional health market.
Juvenescence is another of our investee companies that is making
plans to list in the next six to twelve months and I look forward
to providing updates in this regard as these plans come to
fruition.
Leap Gaming (investment position: 49.05% of NAV) is a B2B
developer of high-end virtual reality gaming applications with a
fast-growing product portfolio developed in partnership with
leading global brands including Mansion Casino.
During the period, Leap Gaming's virtual tennis product, jointly
developed with IMG Arena, was launched in partnership with ATP
Media, the global sales, broadcast production and distribution arm
of the ATP1000 Tour, a worldwide top-tier tennis tour organised by
the Association of Tennis Professionals. Furthermore, IMG Arena
began offering bookmakers a virtual sports betting product for the
NASCAR US stock car racing series, as well as distributing the
international betting streaming rights for the first time. The
company's partnership with 888Sport was also strengthened, with a
variety of Leap Gaming titles becoming available through
888casino.
Having delivered a 95% year-on-year increase in revenues in the
first five months of 2020, FastForward and other shareholders
provided additional funding via a loan to support further rapid
growth and provide a bridge through to profitability. Leap is
continuing on this growth trajectory and is considering the
potential of an additional raise to fund further M&A activity.
Post period end, in November 2020 we announced that Ed McDermott
has been appointed to the Board of Leap Gaming to support the
company as it explores its opportunities to list in 2021.
Portage Biotech Inc. (investment position: 5.37% of NAV) is a
biotechnology company focused on developing best-in-class or
first-in-class therapeutics through a portfolio of nine subsidiary
companies. Its pipeline of projects under development, including
research and treatments for various cancers, eye disease and acute
kidney injury, is progressing well, and it is on target to have
three products in clinical testing by the end of 2020. In June,
Portage raised US$6.9 million through a non-broker private
placement, enabling it to continue accelerating these programmes,
take advantage of new value creating opportunities and continue to
support its subsidiary companies, which are showing significant
promise. Newsflow generated during the period from its subsidiary
companies included:
-- Intensity Therapeutics Inc, which is pioneering a new
immune-based approach to treat solid cancer tumours, entered into a
clinical trial collaboration agreement with New York Stock Exchange
listed Bristol Myers Squibb Company. It also announced new efficacy
and safety data from the ongoing Phase 1/2 clinical study of
INT230-6, its lead product candidate.
-- Saugatuck Therapeutics Ltd, an early stage biotechnology
company focused on the development of coformulation of different
types of immune based therapeutics in a novel delivery system
(Nanolipogels) to improve the safety and efficacy of different
therapies, achieved initial proof of concept of its nanolipogel
formulation.
-- Portage made an additional EUR900k investment in its
associate, Stimunity, the Paris-based cancer immunotherapy company
focused on STING. Stimunity has reached a major milestone in its
preclinical development plan and the additional financing will
enable it to start the manufacturing of its biologic cGAMP-VLP
(STI-001) lead compound.
Yooma Corp (investment position: 13.63% of NAV) is Asia's first
HEMP and CBD Lifestyle company, which delivers products to
consumers through exclusive distribution of third-party skincare
and beauty brands utilising its data-driven digital marketing
expertise. During the period, FastForward invested a further $1
million in Yooma as part of a $5 million fundraising round to
support this business plan. Currently, TSXV traded Globalive
Technology Inc. is pursuing a Reverse Takeover Transaction with
Yooma Corp. Post period end, in November 2020 Yooma also announced
the launch of clean CBD beauty brands M SK Skincare and Lab to
Beauty on BorderX Lab's China cross-border eCommerce app, Beyond,
in advance of Black Friday.
Vemo Education (investment position: 1.69% of NAV) designs,
implements, and manages income share agreement programmes for its
partners, an agreement between a school and student to defer some
of their cost in exchange for a fixed percentage of their
post-graduation income for a fixed period. Vemo is on track to
double its ISA volume in 2020 and has increased the number of
colleges and universities using its products circa 17% to over
70.
The Diabetic Boot Company (investment position: 0% of NAV) is
focused on the treatment of diabetic foot ulcers. Its lead product
is the PulseFlow(R), a new form of diabetic friendly footwear with
integrated offloading capabilities and patented technology, which
aids in the promotion of blood flow and improved circulation in one
product. Our investment in the Diabetic Boot Company has
unfortunately experienced financial difficulties and the company
has notified us that it went into administration on 22 October
2020.
Factom (investment position: 0% of NAV) was established to
address bitcoin's limitations to be a practical blockchain for
Enterprise data solutions. After the conversion of a SAFE note, the
Company is assisting with restructuring following Chapter 11
bankruptcy approval in the US. However, despite attempts to secure
new funding, it is looking increasingly likely that Factom will not
be able to find a resolution. We will update shareholders as there
is more clarity on the situation.
Conclusion
The six-month period to 30 September 2020 saw significant
activity from the majority of our investee companies resulting in
four of them actively taking steps towards potential liquidity
events. As we look to make new investments we are well placed to
take advantage of our position as one of the only London listed
vehicles providing investors with access to the exciting medical
cannabis sector and deliver value to shareholders in the
short-to-medium term.
Condensed Half-Yearly Statement of Comprehensive Income
For the period ended 30 September 2020
1 April 2020 1 April 2019
to to
30 September 30 September
2020 2019
(unaudited) (unaudited)
Note GBP'000 GBP'000
Investment gains and losses
Realised gain on investments at fair
value through profit and loss 5 97 528
Unrealised gain on investments at fair
value through profit and loss 5 1,359 1,156
Interest income on investments at fair
value through profit and loss 4 58
------------- -------------
Total investment gains 1,460 1,742
Income
Bank interest income 2 11
Total income 2 11
Expenses
Legal and professional fees (175) (109)
Directors' remuneration and expenses 12 (133) (225)
Other expenses (82) (30)
Adviser and broker's fees (42) (36)
Administration fees (38) (55)
Recognition of Directors share based
expense 12 (31) (85)
Total expenses (501) (540)
Net profit from operating activities
before gains and losses on foreign currency
exchange 961 1,213
------------- -------------
Net foreign currency exchange (loss)/gain (6) 31
Total comprehensive income for the period 955 1,244
============= =============
Earnings per Ordinary Share - basic
and diluted 7 0.59p 0.77p
All the items in the above statement are derived from continuing operations.
Condensed Statement of Financial Position
As at 30 September 2020
30 September 2020 31 March
2020
(unaudited) (audited)
Note GBP'000 GBP'000
Non-current assets
Financial assets designated
at
fair value through profit
or
loss 5 15,485 13,372
------------------------- -----------------------
Current assets
Other receivables 33 50
Cash and cash equivalents 108 1,213
------------------------- -----------------------
141 1,263
Total assets 15,626 14,635
------------------------- -----------------------
Current liabilities
Payables and accruals (402) (397)
Total liabilities (402) (397)
Net assets 15,224 14,238
========================= =======================
Equity
Share capital 11 1,615 1,615
Deferred share reserve 11 630 630
Employee stock option
reserve 164 1,263
Other distributable reserves 12,815 10,730
Total equity shareholders'
funds 15,224 14,238
========================= =======================
Net assets per Ordinary
Share
- basic and diluted 10 9.43p 8.82p
Condensed Half-Yearly Statement of Changes in Equity
For the period ended 30 September 2020
Deferred Employee
Share shares stock option Distributable
capital reserves reserves reserves Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 March
2020 1,615 630 1,263 10,730 14,238
Total comprehensive
income for the period - - - 955 955
Transactions with shareholders
Employee share scheme
- value of employee
services - - 31 - 31
Transfer of value of
lapsed options - - (1,130) 1,130 -
Balance at 30 September
2020 1,615 630 164 12,815 15,224
========= ========== ============== ============== ========
Deferred Employee
Share shares stock option Distributable
capital reserves reserves reserves Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 March
2019 1,615 630 1,233 15,594 19,072
Total comprehensive
income for the period - - - 1,244 1,244
Transactions with shareholders
Employee share scheme
- value of employee
services - - 85 - 85
Balance at 30 September
2019 1,615 630 1,318 16,838 20,401
========= ========== ============== ============== ========
Condensed Half-Yearly Statement of Cash Flows
For the period ended 30 September 2020
1 April 2020 1 April 2019
to to
30 September 30 September
2020 2019
(unaudited) (unaudited)
GBP'000 GBP'000
Cash flows from operating activities
Bank interest received 2 6
Other Income - 3
Nominated Adviser and broker's fees paid (43) (75)
Legal and professional fees paid (186) (124)
Administration fees paid (55) (51)
Other expenses paid (2) (35)
Directors' remuneration paid (162) (65)
Net cash outflow from operating activities (446) (341)
-------------- --------------
Cash flows from investing activities
Purchase of investments (1,121) -
Disposal of investments 468 805
Net cash inflow from investing activities (653) 805
-------------- --------------
(Decrease)/increase in cash and cash
equivalents (1,099) 464
============== ==============
Cash and cash equivalents brought forward 1,213 504
(Decrease)/Increase in cash and cash
equivalents (1,099) 464
Foreign exchange movement (6) 31
Cash and cash equivalents carried forward 108 999
============== ==============
Notes to the Condensed Half-Yearly Financial Statements
For the period ended 30 September 2020
1. General Information
FastForward Innovations Limited ("the Company") is an authorised
closed-ended investment scheme. The Company is domiciled and
incorporated as a limited liability company in Guernsey. The
registered office of the Company is 11 New Street, St Peter Port,
Guernsey, GY1 2PF.
The Company's objective is set out in its Investing Policy which
can be found at: https://fstfwd.co/investing-policy.
The Company's Ordinary Shares are traded on AIM, a market
operated by the London Stock Exchange. With effect from 3 May 2018
the Company has been authorised as a Closed-ended investment scheme
by the Guernsey Financial Services Commission (the "GFSC") under
Section 8 of the Protection of Investors (Bailiwick of Guernsey)
Law, 1987 and the Authorised Closed-Ended Investment Schemes
Rules.
2. Statement of Compliance
These condensed half-yearly financial statements, which have not
been independently reviewed or audited by the Company auditors,
have been prepared in accordance with International Accounting
Standard 34: Interim Financial Reporting. They do not include all
of the information required for full annual financial statements
and should be read in conjunction with the audited financial
statements for the year ended 31 March 2020.
The unaudited condensed half-yearly financial statements were
approved by the Board of Directors on 9 December 2020.
3. Significant Accounting Policies
These unaudited condensed half-yearly financial statements have
adopted the same accounting policies as the last audited financial
statements, which were prepared in accordance with International
Financial Reporting Standards ("IFRS"), issued by the International
Accounting Standards Board, interpretations issued by the IFRS
Interpretations Committee and applicable legal and regulatory
requirements of Guernsey Law and reflect the accounting policies as
disclosed in the Company's last audited financial statements, which
have been adopted and applied consistently.
The Company has adopted all revisions and amendments to IFRS
issued by the IASB, which may be relevant to and effective for the
Company's financial statements for the annual period beginning 1
April 2020. No new standards or interpretations adopted during the
period had an impact on the reported financial position or
performance of the Company.
4. Critical Accounting Estimates and Judgments
The preparation of financial statements in conformity with IFRS
requires the Board to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expenses. The
estimates and associated assumptions are based on historical
experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the
basis of making the judgements about carrying values of assets and
liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
The Board make estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results.
The Directors believe that the underlying assumptions are
appropriate and that the financial statements are fairly presented.
Estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and
liabilities within the next financial year are outlined below:
Judgements
Assessment as an investment entity
In determining the Company meeting the definition of an
investment entity in accordance with IFRS 10, it has considered the
following:
-- the Company has raised the commitments from a number of
investors in order to raise capital to invest and to provide
investor management services with respect to these private equity
investments;
-- the Company intends to generate capital and income returns
from its investments which will, in turn, be distributed to the
investors; and
-- the Company evaluates its investment performance on a fair
value basis, in accordance with the policies set out in these
financial statements.
Although the Company met all three defining criteria, management
has also assessed the business purpose of the Company, the
investment strategies for the private equity investments, the
nature of any earnings from the private equity investments and the
fair value model. Management made this assessment in order to
determine whether any additional areas of judgement exist with
respect to the typical characteristics of an investment entity
versus those of the Company. Management have therefore concluded
that from the assessments made, the Company meets the criteria of
an investment Company within IFRS 10.
Part of the assessment in relation to meeting the business
purpose aspects of the IFRS 10 criteria also requires consideration
of exit strategies. Given that the Company does not intend to hold
investments indefinitely, management have determined that the
Company's investment plans support its business purpose as an
investment entity.
The Board has also concluded that the Company meets the
additional characteristics of an investment entity, in that: it
holds more than one investment; the investments will predominantly
be in the form of equities, derivatives and similar securities; it
has more than one investor and the majority of its investors are
not related parties.
Estimates
Fair value of securities not quoted in an active market
The Company may value positions by using its own models or
commissioning valuation reports from professional third party
valuers. The models used in either case are based on valuation
methods and techniques generally recognised as standard within the
industry and in accordance with IPEV Guidelines. The inputs into
these models are primarily earnings multiples and discounted cash
flows. The inputs in the earnings multiple's models include
observable data, such as the earnings multiples of comparable
companies to the relevant portfolio company, and unobservable data,
such as forecast earnings for the portfolio company. In discounted
cash flow models, unobservable inputs are the projected cash flows
of the relevant portfolio company and the risk premium for
liquidity and credit risk that are incorporated into the discount
rate. In some instances, the cost of an investment is the best
measure of fair value in the absence of further information. Models
are calibrated by back-testing to actual results/exit prices
achieved to ensure that outputs are reliable, where possible.
Models use observable data, to the extent practicable. However,
areas such as credit risk (both own and counterparty), volatilities
and correlations require management to make estimates. Changes in
assumptions about these factors could affect the reported fair
value of nancial instruments. The sensitivity to unobservable
inputs is based on management's expectation of reasonable possible
shifts in these inputs, taking into consideration historical
volatility and estimations of future market movements.
The determination of what constitutes 'observable' requires
signi cant judgement by the Company. The Company considers
observable data to be market data that is readily available,
regularly distributed or updated, reliable and veri able, not
proprietary, and provided by independent sources that are actively
involved in the relevant market.
Valuation of Options
The fair values of the Options are measured using the
Black-Scholes model, for those options with non-market vesting
conditions, and a Monte Carlo Simulation model for those Options
with market related vesting conditions.
The key estimates and assumptions which are used as inputs in
these valuation models are as follows;
any market vesting conditions;
-- the expected vesting period;
-- the term of the options;
-- the expected volatility of the company's share price as at grant date;
-- the risk-free rate of return available at grant date;
-- the company's share price at grant date;
-- the expected dividends on the company's shares over the expected term of the options; and
-- the exercise (strike) price of the options.
For those Options which did not vest immediately on issue, non-
market vesting conditions, the expected vesting period of the
options is estimated to be 5 years from the grant date. 5 years is
deemed to be a realistic timeframe in which the performance
conditions can be expected to be achieved.
However, the options can be exercised (subject to market
conditions being met where applicable) at any point after vesting
and prior to the Option expiry date.
5. Investments designated at fair value through profit or loss
A reconciliation of the opening and closing balances of assets
designated at fair value through profit or loss classified as Level
3 is as follows:
30 September 31 March
2020 2020
GBP'000 GBP'000
Fair value of investments brought forward 12,426 18,110
Purchases during the period 975 -
Disposal proceeds during the period (50) (1,374)
Capitalised interest on convertible loan 4 -
Realised (losses)/gains on disposals - 561
Net unrealised change in fair value 1,312 (4,871)
Fair value of investments carried forward 14,667 12,426
============== =========
The disposal proceeds during the period relate to the transfer
of shares from Yooya Media to Yooma Corp.
A reconciliation of the opening and closing balances of assets
designated at fair value through profit or loss classified as Level
1 is shown below:
30 September 31 March 2020
2020
GBP'000 GBP'000
Fair value of investments brought forward 946 494
Purchases during the period 196 1,033
Disposal proceeds during the period (468) (908)
Realised (losses)/gains on disposals 97 (396)
Net unrealised change in fair value 47 723
Fair value of investments carried forward 818 946
-------------- --------------
Total value of investments at fair value through
profit or loss 15,485 13,372
============== ==============
There were no transfers between fair value hierarchy levels
during the period (31 March 2020: None).
During the period, the Company converted SAFE note in Factom to
5,911,330 Series A shares representing a cost of GBP4,571,000 and a
fair value of GBPNil as at 30 September 2020.
The valuations used to determine fair values are validated and
periodically reviewed by experienced personnel, in most cases this
validation and review is undertaken by members of the Board,
however professional third-party valuation firms are used for some
valuations and the Company also has access to a network of industry
experts by virtue of the personal networks of the directors and
substantial shareholders (including Messrs Mellon and Abony). The
valuations prepared by the Company or received from third parties
are in accordance with the International Private Equity and Venture
Capital Valuation Guidelines. The valuations, when relevant, are
based on a mixture of:
-- Market approach (utilising EBITDA or Revenue multiples,
industry value benchmarks and available market prices
approaches);
-- Income approach (utilising Discounted Cash Flow, Replacement Cost and Net Asset approaches);
-- Price of a recent transaction when transaction price/cost is
considered indicative of fair value; and
-- proposed sale price.
6. Segmental Information
In accordance with International Financial Reporting Standard 8:
Operating Segments, it is mandatory for the Company to present and
disclose segmental information based on the internal reports that
are regularly reviewed by the Board in order to assess each
segment's performance and to allocate resources to them.
Operating segments are reported in a manner consistent with the
internal reporting used by the chief operating decision-maker. The
chief operating decision-maker, who is responsible for allocating
resources and assessing performance of the operating segments, has
been identified as the board as a whole. The board is responsible
for the Company's entire portfolio and considers the business to
have a single operating segment. Asset allocation decisions are
based on a single, integrated investment strategy, and the
Company's performance is evaluated on an overall basis.
7. Earnings per Ordinary Share
The profit per Ordinary Share of 0.59p (30 September 2019:
0.77p) is based on the profit for the period of GBP955,000 (30
September 2019: GBP1,244,000) and on a weighted average number of
161,500,105 Ordinary Shares in issue during the period (30
September 2019: 161,500,105 Ordinary Shares).
The basic and diluted earnings per Ordinary Share were the same.
The average share price of the Ordinary Shares during the period
was below the exercise price of the Options (exercise prices of
19.00 pence, 20.00 pence and 25.00 pence). Therefore, as at 30
September 2020 the Options had no dilutive effect.
8. Dividends
The Directors do not propose an interim dividend for the period
ended 30 September 2020 (30 September 2019: GBPNil).
9. Tax Effects of Other Comprehensive Income
There were no tax effects arising from income disclosed in the
Statement of Comprehensive Income (30 September 2019: GBPNil).
10. Net Assets per Ordinary Share
Basic and diluted
The basic net assets value per Ordinary Share is based on the
net assets attributable to equity shareholders of GBP15,224,000 (31
March 2020: GBP14,238,000) and on 161,500,105 Ordinary Shares in
issue at the end of the period (31 March 2020: 161,500,105 Ordinary
Shares).
11. Share Capital and Options
30 September
2020 31 March 2020
GBP'000 GBP'000
Authorised:
1,910,000,000 Ordinary Shares of 1p 19,100 19,100
100,000,000 Deferred Shares of 0.9p 900 900
20,000 20,000
============== ====================
Allotted, called up and fully paid:
161,500,105 Ordinary Shares of 1p 1,615 1,615
70,000,709 Deferred Shares of 0.9p 630 630
-------------- --------------------
2,245 2,245
============== ====================
Options:
Share options 2,000,000 14,131,548
Ordinary Shares
There was no issue of shares during the period ended 30
September 2020 (31 March 2020: Nil).
Deferred Shares
In aggregate (not per share), the holders of Deferred Shares
shall be entitled to receive up to GBP1 only as a preferred
dividend or distribution. The Deferred Shares have zero economic
value. The holders of Deferred Shares, in respect of their holdings
of Deferred Shares, shall not have the right to received notice of
any general meeting of the Company, nor the right to attend, speak
or vote at any such general meeting. The Company has the right to
transfer the Deferred Shares to such persons as it wishes, without
the consent of the holders of the Deferred Shares, and to cancel
Deferred Shares with the consent of such transferee. No movement in
deferred shares has occurred in the period.
Options
During the period 12,131,548 options issued to Mr Abony, the
former Chairman of the Company, lapsed. The total Employee Share
Option Reserve in relation to Mr Abony of GBP1,130,000 has been
transferred to Other Distributable Reserves through the Statement
of Changes in Equity.
Directors' Authority to Allot Shares
The Directors are generally and unconditionally authorised to
exercise all the powers of the Company to allot relevant
securities. As approved at the Company Annual General Meeting on 17
September 2020 the Directors may determine up to a maximum
aggregate nominal amount of 100% of the issued share capital during
the period until the following Annual General Meeting. The Guernsey
Companies Law does not limit the power of Directors to issue shares
or impose any pre-emption rights on the issue of new shares.
Shares held in Treasury
As a result of share repurchases in prior years, at period end
the Company has a total of 5,413,623 ordinary shares held as
Treasury shares (31 March 2020: 5,413,623). No shares were
repurchased during the period (31 March 2020: Nil).
12. Re lat e d Parti es
Ian Burns
Mr Burns, appointed as Non-Executive Chairman on 15 May 2020, is
the legal and beneficial owner of Smoke Rise Holdings Limited
("Smoke"), which held 1,374,024 (31 March 2020: 1,374,024) Ordinary
Shares in the Company at 30 September 2020 and at the date of
signing this report.
Mr Burns is entitled to an annual salary of GBP36,000 annual
remuneration effective as from 1 January 2020 (previously,
GBP24,000 per annum), payable quarterly in arrears.
Lorne Abony
Mr Abony, Chairman of the Company till 15 May 2020, held
14,843,211 (31 March 2020: 14,843,211) Ordinary Shares in the
Company at 30 September 2020 and at the date of signing this
report.
As at 30 September 2020, the Company held 1,000,000 (31 March
2020: 1,000,000) non-assessable series-2 preferred stocks in Vemo
Education. Inc ("Vemo"), a company related by virtue of common
shareholdings with Mr Abony.
Mr Abony holds US$1m for Series A shares of Juvenescence Limited
on the same terms as the Company.
Mr Abony is a Chairman of the Board of Directors of EMMAC. Mr
Abony holds 20,833,333 shares in EMMAC, which equates to 7.2% of
the shares in issue.
Mr Abony resigned on 15 May 2020 and accepted to defer accrued
remuneration owing to him of GBP250,000 as at date of resignation
for a period of 12 months.
During the period 12,131,548 options issued to Mr Abony, the
former Chairman of the Company, lapsed.
Ed McDermott
Mr McDermott was a co-founder of, and is an executive director
of, EMMAC Life Sciences Limited ("EMMAC"). Mr McDermott owns
11,250,000 (31 March 2020: 11,250,000) shares in EMMAC, which
equates to 3.9% of the shares in issue.
Mr McDermott is entitled to an annual remuneration of GBP92,808.
This includes a Director Fee of GBP80,000 per annum and a
reimbursement of GBP12,808 for the amounts paid or payable as tax
to HMRC.
Mr McDermott held 2,000,000 options as at 30 September 2020 (31
March 2020: 2,000,000).
Lance De Jersey
Mr De Jersey, Finance Director of the Company holds 400,000
ordinary shares in the Company, representing 0.25% of the Company's
issued share capital.
Mr De Jersey is entitled to an annual salary of GBP80,000 per
annum.
Mr Cairns
Mr Cairns, appointed as Non-Executive Director of the Company on
3 January 2020 is entitled to an annual remuneration of GBP36,000
per annum.
30 September 2020
Directors' Recognition Total
Remuneration of share based
expense
GBP'000 GBP'000 GBP'000
Ian Burns 18 - 18
Jim Mellon - - -
Lorne Abony 12 15 27
Ed McDermott 45 16 61
Lance De Jersey 40 - 40
Luke Cairns 18 - 18
133 31 164
=============== ================= =========
30 September 2019
Recognition
Directors' of share based
Remuneration expense Total
GBP'000 GBP'000 GBP'000
Ian Burns 12 - 12
Jim Mellon 12 8 20
Lorne Abony 146 61 207
Ed McDermott 20 16 36
Lance De Jersey 35 - 35
225 85 310
=============== ================= =========
No pension contributions were paid or were payable on behalf of
the Directors.
13. Capital management policy and procedures
The Company's capital structure is derived solely from the issue
of Ordinary and Deferred Shares.
The Company does not ordinarily intend to fund any investments
through debt or other borrowings but may do so if appropriate.
Investments in early stage assets are expected to be mainly in the
form of equity, with debt potentially being raised later to fund
the development of such assets. Investments in later stage assets
are more likely to include an element of debt to equity gearing.
The Company may also offer new Ordinary Shares by way of
consideration as well as cash, thereby helping to preserve the
Company's cash for working capital and as a reserve against
unforeseen contingencies including, for example, delays in
collecting accounts receivable, unexpected changes in the economic
environment and operational problems.
The Board monitors and reviews the structure of the Company's
capital on an ad hoc basis. This review includes:
-- The need to obtain funds for new investments, as and when
they arise.
-- The current and future levels of gearing.
-- The need to buy back Ordinary Shares for cancellation or to
be held in treasury, which takes account of the difference between
the net asset value per Ordinary Share and the Ordinary Share
price.
-- The current and future dividend policy; and
-- The current and future return of capital policy.
The Company is not subject to any externally imposed capital
requirements.
14. COVID
During the year and to the date that the Financial Statements
were approved, the coronavirus ("COVID") outbreak emerged and has
continued to cause extensive disruptions to businesses and economic
activities. The company has not experienced a negative impact on
its operations or arrangements as a result of COVID-19.
As the pandemic continues the quantum of the effect is difficult
to determine and could be material, however the Directors are
monitoring the situation and considering the effect it may have on
possible future impact on the company and its operations.
The Directors therefore remain confident that the going concern
basis remains appropriate.
15. Events after the financial reporting date
On 13 October 2020, the Company placed 23,529,646 new Ordinary
Shares of 1p each (the 'Placing Shares') at a price of 8.5p per
Placing Share (the "Placing Price") with a number of new investors
raising gross proceeds of approximately GBP2million (together the
'Placing').
In addition, the Company issued 70,588 Ordinary Shares (the
"Adviser Shares" at the Placing Price to settle accrued adviser
fees. The Placing Price represents a discount of approximately 4%
to the Company's most recently published Net Asset Value ('NAV')
per share of 8.82p and a 12.8% discount to the closing price of the
Company's ordinary shares on 9 October 2020, being the business day
prior to completion of the Placing.
As part of the Placing the Company has issued one warrant for
every two Placing Shares (the "Placing Warrants"). Shard Capital
are sole brokers to the Placing.
On 22 October 2020 Diabetic Boot Company was placed into
administration, crystalising the loss on this investment.
On 4 November 2020, it was announced that despite signi cant e
orts by all parties involved, the negotiations regarding the
proposed business combination between Andina Acquisition Corp. III
and EMMAC have been mutually terminated.
On 12 November 2020, the deferred share reserve of GBP630,000
was reduced to GBPNil following Board approval.
The Company sold 11,500 shares in Portage Biotech Inc. in a
number of transactions for a sale proceed of US$135,650 as at date
of approval of the Financial Statements.
ENDS
For further information on the Company please visit www.fstfwd.co or contact:
Ed McDermott FastForward Innovations Email: info@fstfwd.co
Lance de Jersey Ltd
James Biddle Beaumont Cornish Limited Tel: +44 (0) 20 7628
Roland Cornish Nomad 3396
------------------------- ----------------------
Isabella Pierre Shard Capital Partners Tel: (0)207 186 9927
/ Damon Heath LLP
------------------------- ----------------------
Isabel De Salis St Brides Partners Ltd Tel: +44 (0)20 7236
/ Beth Melluish Financial PR 1177
------------------------- ----------------------
Notes
FastForward Innovations is an AIM quoted investment company
focused primarily on disruptive high growth life sciences and
technology businesses particularly within the medical cannabis
arena. The Company's strategy is to identify early stage
opportunities that have an upcoming investment catalyst and grow
its portfolio in terms of value whilst limiting the number of
investee companies to a level where relevant time can be devoted to
each.
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END
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