TIDMATD
RNS Number : 2952C
Asterand PLC
30 April 2012
For Immediate Release 30 April 2012
Asterand plc
FINAL RESULTS STATEMENT
for the year ended 31 December 2011
Asterand plc (LSE: ATD), a leading global supplier of human
tissue and human tissue-based research services to pharmaceutical
and biotechnology companies engaged in drug discovery research,
announces its audited final financial results for the year ended 31
December 2011.
The full 2011 Annual Report and Accounts can be found on our
website at
http://www.asterand.com/Asterand/investors/financialreports/2012/Asterand_Annual_Report_Accounts_2011.pdf
Notes to Editors
Asterand plc is a leading supplier of high quality human tissue
and tissue-based services. Our comprehensive approach to human
tissue and research services offers pharmaceutical, biotech and
diagnostic companies the unique opportunity to have one company
meet all of their human biomaterial needs along the continuum of
drug discovery and development. Our mission is to accelerate target
discovery and drug compound validation and enable our clients to
take safer and more effective drugs into the market.
For more information about Asterand please visit
http://www.asterand.com
For further information contact:
Contacts:
Asterand plc
Jack Davis, Chairman,
Interim Chief Executive Officer
and Tel: + 44 (0) 1763 211 600 /
Company Secretary Tel: + 1 (313) 263-0960
Alan Fishman, Interim Chief Financial As above
Officer
Daniel Stewart & Company plc
Antony Legge Tel: +44 (0) 20 7776 6550
CHAIRMAN'S STATEMENT
Results for the year ended 31 December 2011
During 2011 the Group achieved revenue of $24.09 million (2010:
$21.31 million), an increase of 13%. These results were due to
strong annual performance by the BioSeek business and benefited as
well from the inclusion of a full twelve months of BioSeek in 2011
(2010: ten months) and an improved 4(th) quarter performance by the
non-BioSeek related Tissue Based Solutions business.
The Group's cost of sales was $11.23 million (2010: $9.33
million), leading to a gross profit for the year of $12.86 million
(2010: $11.98 million profit). As a result, gross margins were 53%
(2010: 56%).
This revenue growth was achieved while prudently managing costs
and keeping expenditures on normal operations in check. Research
and Development (R&D) expenses were $1.43 million (2010: $1.33
million). All 2011 R&D expenses were related to improvements to
new product offerings to support the Group's focus on the business
of human tissue supply and human tissue based solutions.
Selling and distribution costs were $3.41 million (2010: $3.82
million). These costs relate to sales staff salaries, commissions
and marketing expenses. The modest decrease is attributable to a
reduction in sales staff salaries expense due to attrition and a
renegotiation of our consultant agreement with our Japanese sales
and marketing representative.
Total general and administrative expenses were $12.55 million
(2010: $8.92 million). General and administrative expenses are
analysed between those relating to exceptional costs and those to
normal operations. Costs relating to normal operations were reduced
to $7.82 million (2010: $8.00 million).
On 24 October 2011 the commencement of a formal sales process
for the Group was announced. During this process the Group has held
discussions with several interested parties. The Company has not
been able to secure an offer for the whole Group, instead it has
signed letters of intent for each of the two businesses in the
Tissue Based Solutions segment: BioSeek and the non-BioSeek Tissue
Based Solutions. As a consequence, the formal sale process has now
ended and the Company is no longer in an Offer Period.
This decision, after the year end, to sell certain elements of
the business separately has resulted in reductions in the carrying
value of certain assets, primarily intangible assets and inventory,
as explained further below. These impairment charges reflect that
these financial statements are not prepared on a going concern
basis since all parts of the business are being actively marketed
and thus the asset values have been adjusted to reflect their
estimated realisable value.
Exceptional general and administrative costs rose to $4.73
million (2010: $0.92 million) due to these impairment charges,
totalling $3.40 million. Remaining exceptional costs related to
severance, acquisition, litigation and sale costs.
The Group realised a $8.23 million loss for the year (2010:
$2.07 million loss), including a $1.59 million (2010: $nil)
exceptional interest expense relating to the financing arrangements
in place to acquire BioSeek. Loan notes were the agreed form of
payment for the contingent consideration of BioSeek; the interest
expense arising on these are deemed to be exceptional interest.
Although it is a non-IFRS measure, Earnings Before Interest,
Taxes, Depreciation and Amortization (EBITDA) and excluding
exceptional items and share option related charges is monitored
closely by the Directors and management as a metric to measure
progress of business operations towards profitability and positive
cash flow. The adjusted EBITDA for 2011 was $1.51 million profit, a
$1.53 million improvement over 2010 (2010: $0.02 million loss). An
explanation of this calculation can be found on page 6 of this
document.
Balance Sheet
At 31 December 2011, the carrying value of the intangible assets
was reduced to $3.31 million due to an impairment charge of $1.29
million to write down the carrying value of the assets of the
non-BioSeek related Tissue Based Solutions business to a level of
the expected net proceeds from the business disposal.
On 31 December 2011, the carrying value of the biobank inventory
was reduced to $6.55 million due to an impairment charge of $2.11
million to write down the carrying value of inventory to the amount
implied by the expected recoverable amounts in the sale of the
non-BioSeek Tissue Based Solutions business.
Cash flows
The Directors monitor the cash flow and cash resources closely.
At 31 December 2011, there had been a $2.94 million reduction in
the cash balance as compared to the previous year (2011: $2.98
million; 2010: $5.92 million). Primary uses of cash throughout the
year included $3.24 million debt and finance lease repayments and
$0.72 million of loan interest paid.
Financing and liquidity
At 31 December 2011 the Group had cash and cash equivalents of
$2.98 million (2010: $5.92 million). The Group has a $2.30 million
term loan with Silicon Valley Bank and a $6.59 million balance on
the loan note with the former BioSeek shareholders. In October
2011, the Group received notification that these loans were in
default. As announced in October 2011, the Company is currently
undergoing a formal sale of all or part of the business. Our
creditors have remained supportive throughout and we believe the
default status will be resolved at the conclusion of the sales
process.
Board changes and corporate governance
During 2011 we announced the departures of Martyn Coombs, the
Group's Chief Executive Officer, John Stchur, the Group's Chief
Financial Officer and Jonathan Fleming, a Non-Executive
Director.
I'd like to take this opportunity to thank Martyn, John and
Jonathan for their service over the past years and wish them well
in their future endeavours.
The Board and management continue to have a policy of
transparency with regards to our strategy and related activities.
An important component of this involves communicating and listening
to our shareholders to understand their ideas and points of
view.
Aligning objectives between employees and shareholders
During 2011, we granted a total of 0.92 million share options to
our employees through our Long Term Incentive Programme. We believe
this programme enables us to retain key employees, while aligning
the goals of our shareholders with those of our employees. Every
Asterand employee receives shares under this programme.
Outlook
As previously mentioned, the Group commenced a formal sale
process for the issued capital of the Group in October 2011. The
Company has instead signed letters of intent to sell each of the
two businesses: BioSeek and the non-BioSeek Tissue Based Solutions
business, separately, and the formal sale process has ended with
the Company now no longer in an Offer Period.
Assuming that definitive agreements are executed the Board is
expecting to issue a circular to shareholders in the coming weeks
with details of the proposed transactions. Then the likely process
will be disposal of the assets of each of the two businesses and a
solvent liquidation of the Group to return cash to shareholders.
Whilst the level of a liquidation dividend, if any, cannot
definitely be determined at this time, the Board's current
estimation, based on the letters of interest from the buyers and
the current share price, is that the maximum payout to shareholders
is unlikely to show a significant premium to the share price as of
the close of business on 26 April 2012.
Revenue for the non-BioSeek portions of the Tissue Based
Solutions business, which had been volatile for most of the year,
stabilised in the last quarter of 2011, providing an increased cash
flowover the original estimates. Given these factors, the Directors
have a reasonable expectation that the Company will maintain
adequate resources to continue in operational existence until
completion of disposals. The completion of the disposals is not
guaranteed and there is inherent risk that the sale cannot be
completed within the necessary timeframe. In addition, the
following are considered to be further uncertainties related to the
disposals:
-- Shareholder approval - raising funds through the disposals of
all or part of the Company's assets is predicated on shareholder
approval. The Board intends to convene an Extraordinary General
Meeting at which the necessary resolutions will be put to
shareholders. While there is uncertainty over the outcome of these
votes, the Board has a reasonable expectation that approval to
proceed with this strategy will be forthcoming.
-- Loan covenants - we are currently in default of our Silicon
Valley Bank and former shareholders of BioSeek loans. We have been
in communication with our lenders and they are in support of
resolving the default status at the conclusion of this process.
However, their continued support cannot be guaranteed.
-- Trading results - management have prepared budgets and
projections which they believe are prudent and achievable. However,
the achievement of these trading results is uncertain.
Given that the Directors have resolved to sell the two business
units separately, a 'going concern' presumption in IAS 1 is not
appropriate; therefore the accounts have been drawn up on a basis
which reflects the Directors' intention to sell the two business
units. The management team continues to tightly control operating
expenses to maintain sufficient working capital. In addition, based
on discussions with potential purchasers, the Board believes that
it has a reasonable expectation that the disposals will be
completed within an appropriate timeframe.
Jack Davis
Chairman, Asterand plc
Consolidated Income Statement
for the year ended 31 December 2011
2011 2010
Note $'000 $'000
-------------------------------------------- ----- --------- ---------
Revenue 2 24,091 21,310
-------------------------------------------- ----- --------- ---------
Cost of sales (11,233) (9,332)
-------------------------------------------- ----- --------- ---------
Gross profit 12,858 11,978
-------------------------------------------- ----- --------- ---------
Research and development costs (1,432) (1,326)
-------------------------------------------- ----- --------- ---------
Selling and distribution costs (3,412) (3,824)
-------------------------------------------- ----- --------- ---------
-Normal operations (7,819) (8,003)
-------------------------------------------- ----- --------- ---------
-Exceptional items (impairment, severance,
acquisition, litigation and sale costs) 3 (4,733) (920)
-------------------------------------------- ----- --------- ---------
Total general and administrative expenses (12,552) (8,923)
-------------------------------------------- ----- --------- ---------
Total operating expenses (17,396) (14,073)
-------------------------------------------- ----- --------- ---------
Operating loss (4,538) (2,095)
-------------------------------------------- ----- --------- ---------
Interest income - normal operations 78 4
-------------------------------------------- ----- --------- ---------
Interest expense - normal operations (716) (57)
-------------------------------------------- ----- --------- ---------
Interest expense - exceptional costs (1,591) -
-------------------------------------------- ----- --------- ---------
Foreign exchange credit 166 107
-------------------------------------------- ----- --------- ---------
Finance (expense)/income (2,063) 54
-------------------------------------------- ----- --------- ---------
Loss before taxation (6,601) (2,041)
-------------------------------------------- ----- --------- ---------
Taxation (1,627) (32)
-------------------------------------------- ----- --------- ---------
Loss for the financial year attributable
to owners of the parent (8,228) (2,073)
-------------------------------------------- ----- --------- ---------
Loss per 5p ordinary share
-------------------------------------------- ----- --------- ---------
Basic 4 (7.0)c (1.8)c
-------------------------------------------- ----- --------- ---------
Diluted 4 (7.0)c (1.8)c
-------------------------------------------- ----- --------- ---------
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2011
Group Group
2011 2010
$'000 $'000
-------------------------------------------------- -------- --------
Loss for the financial year (8,228) (2,073)
-------------------------------------------------- -------- --------
Other comprehensive income:
-------------------------------------------------- -------- --------
Exchange translation difference on consolidation
recognised directly in equity (183) (66)
-------------------------------------------------- -------- --------
Other comprehensive expense for the year net of
tax (183) (66)
-------------------------------------------------- -------- --------
Total comprehensive expense for the year (8,411) (2,139)
-------------------------------------------------- -------- --------
There is no tax arising on the exchange translation difference
on consolidation recognised directly in equity.
Non-IFRS Measure
Earnings before interest, taxes, depreciation and amortisation
("EBITDA") - and excluding exceptional items and share option
related charge for the year ended 31 December 2011:
2011 2010
$'000 $'000
-------------------------------------------------------- --- -------- --------
Operating loss (4,538) (2,095)
------------------------------------------------------------- -------- --------
Exceptional items (impairment, severance, acquisition,
litigation and sale costs) 4,733 920
------------------------------------------------------------- -------- --------
Share option related charge 230 132
------------------------------------------------------------- -------- --------
Depreciation and amortisation 1,084 1,022
------------------------------------------------------------- -------- --------
Adjusted EBITDA 1,509 (21)
------------------------------------------------------------- -------- --------
Consolidated Balance Sheet
as at 31 December 2011
2011 2010
Note $'000 $'000
--------------------------------------------------------------------- --- ----- -------------- ---------
Assets
--------------------------------------------------------------------- --- ----- -------------- ---------
Non-current assets
--------------------------------------------------------------------- --- ----- -------------- ---------
Intangible assets 5 3,305 4,778
-------------------------------------------------------------------------- ----- -------------- ---------
Property, plant and equipment 2,959 3,386
-------------------------------------------------------------------------- ----- -------------- ---------
Deferred tax asset 4,360 4,843
-------------------------------------------------------------------------- ----- -------------- ---------
Trade and other receivables 90 94
-------------------------------------------------------------------------- ----- -------------- ---------
10,714 13,101
------------------------------------------------------------------------- ----- -------------- ---------
Current assets
--------------------------------------------------------------------- --- ----- -------------- ---------
Biobank inventory 7 6,549 9,136
-------------------------------------------------------------------------- ----- -------------- ---------
Trade and other receivables 6,130 6,216
-------------------------------------------------------------------------- ----- -------------- ---------
Cash and cash equivalents 2,978 5,918
-------------------------------------------------------------------------- ----- -------------- ---------
15,657 21,270
------------------------------------------------------------------------- ----- -------------- ---------
Liabilities
--------------------------------------------------------------------- --- ----- -------------- ---------
Current liabilities
--------------------------------------------------------------------- --- ----- -------------- ---------
Trade and other payables (6,857) (5,250)
-------------------------------------------------------------------------- ----- -------------- ---------
Income tax payable (1,307) (797)
-------------------------------------------------------------------------- ----- -------------- ---------
Other financial liabilities --Finance
leases 8 (5) (12)
-------------------------------------------------------------------------- ----- -------------- ---------
--Current debt 8 (2,428) (703)
-------------------------------------------------------------------------- ----- -------------- ---------
--Amounts due to former shareholders
of BioSeek 8 (6,591) (7,624)
-------------------------------------------------------------------------- ----- -------------- ---------
--Warrants 8 (12) -
-------------------------------------------------------------------------- ----- -------------- ---------
(17,200) (14,386)
------------------------------------------------------------------------- ----- -------------- ---------
Net current (liabilities)/assets (1,543) 6,884
-------------------------------------------------------------------------- ----- -------------- ---------
Non-current liabilities
--------------------------------------------------------------------- --- ----- -------------- ---------
Deferred tax liability (179) (282)
-------------------------------------------------------------------------- ----- -------------- ---------
Other financial liabilities --Finance
leases 8 - (5)
-------------------------------------------------------------------------- ----- -------------- ---------
--Long term debt 8 - (2,348)
-------------------------------------------------------------------------- ----- -------------- ---------
Other payables (1,778) (2,191)
-------------------------------------------------------------------------- ----- -------------- ---------
(1,957) (4,826)
------------------------------------------------------------------------- ----- -------------- ---------
Net assets 7,214 15,159
-------------------------------------------------------------------------- ----- -------------- ---------
Equity attributable to owners of the
parent
--------------------------------------------------------------------- --- ----- -------------- ---------
Ordinary shares 9,428 9,262
-------------------------------------------------------------------------- ----- -------------- ---------
Shares to be issued 8 535
-------------------------------------------------------------------------- ----- -------------- ---------
Share premium 84,676 84,298
-------------------------------------------------------------------------- ----- -------------- ---------
Reverse acquisition reserve (66,757) (66,757)
-------------------------------------------------------------------------- ----- -------------- ---------
Merger reserve 510 510
-------------------------------------------------------------------------- ----- -------------- ---------
Other reserves 4,910 4,910
-------------------------------------------------------------------------- ----- -------------- ---------
Profit and loss reserve (29,928) (22,149)
-------------------------------------------------------------------------- ----- -------------- ---------
Currency translation reserve 4,367 4,550
-------------------------------------------------------------------------- ----- -------------- ---------
Total equity 7,214 15,159
-------------------------------------------------------------------------- ----- -------------- ---------
Company Balance Sheet
as at 31 December 2011
2011 2010
Note $'000 $'000
----------------------------------- ---- -------- --------
Assets
----------------------------------- ---- -------- --------
Non-current assets
----------------------------------- ---- -------- --------
Investment in subsidiaries 6 21,617 24,574
--------------------------------------- ---- -------- --------
Amounts receivable from Group
companies 9 - 3,001
--------------------------------------- ---- -------- --------
21,617 27,575
-------------------------------------- ---- -------- --------
Current assets
----------------------------------- ---- -------- --------
Trade and other receivables 227 161
--------------------------------------- ---- -------- --------
Cash and cash equivalents 10 10
--------------------------------------- ---- -------- --------
237 171
-------------------------------------- ---- -------- --------
Liabilities
----------------------------------- ---- -------- --------
Current liabilities
----------------------------------- ---- -------- --------
Trade and other payables (207) (22)
--------------------------------------- ---- -------- --------
Amounts due to former shareholders
of BioSeek 10 (6,591) (7,624)
--------------------------------------- ---- -------- --------
Amounts payable to Group companies 9 (2,329) -
--------------------------------------- ---- -------- --------
(9,127) (7,646)
-------------------------------------- ---- -------- --------
Net current liabilities (8,890) (7,475)
--------------------------------------- ---- -------- --------
Net assets 12,727 20,100
--------------------------------------- ---- -------- --------
Equity attributable to owners
of the parent
----------------------------------- ---- -------- --------
Ordinary shares 9,428 9,262
--------------------------------------- ---- -------- --------
Shares to be issued 8 535
--------------------------------------- ---- -------- --------
Share premium 84,676 84,298
--------------------------------------- ---- -------- --------
Merger reserve 510 510
--------------------------------------- ---- -------- --------
Retained losses (92,548) (85,165)
--------------------------------------- ---- -------- --------
Currency translation reserve 10,653 10,660
--------------------------------------- ---- -------- --------
Total equity 12,727 20,100
--------------------------------------- ---- -------- --------
Consolidated Statement of Changes in Equity
as at 31 December 2011
Profit Currency
Shares Reverse Investment and translation
Ordinary to be Share acquisition Merger Other in own loss reserve Total
shares issued premium reserve reserve reserves shares reserve $'000 equity
Group $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $000
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
At 1 January
2010 9,043 5 84,282 (66,757) --- 4,910 (1,062) (18,434) 4,616 16,603
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
Comprehensive - -
Income
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
Loss for the
year - - - - - - - (2,073) - (2,073)
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
Other
comprehensive
income
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
Exchange
translation - - - - - - - - (66) (66)
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
Total
Comprehensive
Income - - - - - - - (2,073) (66) (2,139)
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
Employee share
option schemes
Value of
employee
services - - - - - - - 132 - 132
Proceeds from
shares issued 6 - 16 - - - - - - 22
Modification
to equity
settled share
option scheme - - - - - - - (187) - (187)
Proceeds from
shares issued - 530 - - - - (525) - - 5
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
Acquisition
of BioSeek 213 - - - 510 - - - - 723
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
Transactions
with owners 219 530 16 - 510 - (525) (55) - 695
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
At 31 December
2010 9,262 535 84,298 (66,757) 510 4,910 (1,587) (20,562) 4,550 15,159
Comprehensive
Income
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
Loss for the
year - - - - - - - (8,228) - (8,228)
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
Other
comprehensive
income
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
Exchange
translation - - - - - - - - (183) (183)
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
Total
Comprehensive
Income - - - - - - - (8,228) (183) (8,411)
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
Employee share
option schemes
Value of
employee
services - - - - - - - 403 - 403
Proceeds from
shares issued 166 (527) 378 - - - 46 - - 63
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
Transactions
with owners 166 (527) 378 - - - 46 403 - 466
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
At 31 December
2011 9,428 8 84,676 (66,757) 510 4,910 (1,541) (28,387) 4,367 7,214
--------------- --------- ------- -------- ------------ -------- --------- ----------- --------- ------------ --------
Included within the investment in own shares reserve are 304,037
(2010: 419,231) shares of 5p each held by the 2007 Employee
Ownership Plan Trust ('2007 EOPT') for the satisfaction of share
obligations under all option plans. The costs of funding and
administering the 2007 EOPT are charged to the income statement of
the Group in the period to which they relate. At 31 December 2011,
the shares owned by the 2007 EOPT had a market value of $11,159
(2010: $176,981).
Other reserves represent the merger reserve arising on
consolidation, being the share capital and share premium account
balances of Pharmagene Laboratories Limited (renamed Asterand UK
Limited) less the nominal value of the shares issued by the Company
to acquire these shares, before the merger with Pharmagene plc
(renamed Asterand plc) prior to the initial public offering of the
Company in 2000.
The merger reserve represents the premium to the nominal value
of the shares issued on the acquisition of BioSeek during 2010.
In 2010, a modification was made to an equity settled share
option scheme (2007 LTIP options) to settle this partly in cash to
allow US employees to settle their US tax liability on US vested
options. This resulted in a charge of $187,000 being recorded
through reserves (2011: $nil).
Company Statement of Changes in Equity
as at 31 December 2011
Profit
Shares and Currency
Ordinary to Share Merger loss translation Total
shares be issued premium reserve reserve reserve equity
$'000 $'000 $'000 $'000 $'000 $'000 $'000
----------------------- -------- ---------- -------- -------- -------- ------------ --------
At 1 January 2010 9,043 5 84,282 - (83,140) 10,810 21,000
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Comprehensive income
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Loss for the year - - - - (1,970) - (1,970)
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Other comprehensive
income
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Exchange translation - - - - - (150) (150)
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Total comprehensive
income - - - - (1,970) (150) (2,120)
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Employee share option
schemes
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Value of employee
services - - - - 67 - 67
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Capital contribution - - - - 65 - 65
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Proceeds from shares
issued 6 - 16 - - - 22
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Modification to
equity settled share
option scheme - - - - (187) - (187)
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Shares to be issued - 530 - - - - 530
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Acquisition of BioSeek 213 - - 510 - - 723
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Transactions with
owners 219 530 16 510 (55) - 1,220
----------------------- -------- ---------- -------- -------- -------- ------------ --------
At 1 January 2011 9,262 535 84,298 510 (85,165) 10,660 20,100
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Comprehensive income
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Loss for the year - - - - (7,786) - (7,786)
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Other comprehensive
income
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Exchange translation - - - - - (7) (7)
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Total comprehensive
income - - - - (7,786) (7) (7,793)
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Employee share option
schemes
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Value of employee
services - - - - 289 - 289
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Capital contribution - - - - 114 - 114
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Proceeds from shares
issued 166 (527) 378 - - - 17
----------------------- -------- ---------- -------- -------- -------- ------------ --------
Transactions with
owners 166 (527) 378 - 403 - 420
----------------------- -------- ---------- -------- -------- -------- ------------ --------
At 31 December 2011 9,428 8 84,676 510 (92,548) 10,653 12,727
----------------------- -------- ---------- -------- -------- -------- ------------ --------
See Consolidated Statement of Changes in Equity for explanation
of changes in equity.
Consolidated Cash Flow Statement
for the year ended 31 December 2011
2011 2010
$'000 $'000
Note
------------------------------------------------- ----- -------- --------
Cash flows from operating activities
Loss for the year (8,228) (2,073)
Adjustments for:
Contingent consideration remeasurement - 356
Finance expense/(income) 2,063 (54)
Tax charge 1,627 32
Depreciation of property, plant and equipment 865 827
Amortisation of intangible assets 5 219 195
Share option compensation charge 403 132
Impairment charge 3 3,400 -
Operating cash flows before movement
in working capital 349 (585)
------------------------------------------------- ----- -------- --------
Decrease/(increase) in trade and other
receivables 75 (2,242)
Decrease/(increase) in biobank inventories 7 480 (318)
Increase/(decrease) in trade and other
payables 1,194 (1,570)
------------------------------------------------- ----- -------- --------
Cash used in operations 2,098 (4,715)
------------------------------------------------- ----- -------- --------
Interest received 78 4
Interest paid (716) (53)
Interest element of finance lease rental
payments (2) (4)
Income taxes paid (763) (120)
Receipt of research and development tax 87 -
credit
------------------------------------------------- ----- -------- --------
Net cash used in operating activities 782 (4,888)
------------------------------------------------- ----- -------- --------
Cash flows from investing activities
Cash acquired on acquisition of BioSeek 10 - 1,573
Purchase of property, plant and equipment (457) (311)
Purchase of intangible assets 5 (35) (64)
------------------------------------------------- ----- -------- --------
Net cash (used in)/generated from investing
activities (492) 1,198
------------------------------------------------- ----- -------- --------
Cash flows from financing activities
Proceeds from issue of ordinary share
capital 14 22
Proceeds from ordinary share capital
to be issued - 5
Loan received - 2,948
Debt and finance lease principal payments (3,244) (11)
------------------------------------------------- ----- -------- --------
Net cash (used in)/generated from financing
activities (3,230) 2,964
------------------------------------------------- ----- -------- --------
Net decrease in cash and cash equivalents (2,940) (726)
------------------------------------------------- ----- -------- --------
Cash and cash equivalents at beginning
of year 5,918 6,644
------------------------------------------------- ----- -------- --------
Cash and cash equivalents at end of year 2,978 5,918
------------------------------------------------- ----- -------- --------
Company Cash Flow Statement
for the year ended 31 December 2011
Company Company
2011 2010
Note $'000 $'000
--------------------------------------------- ---- -------- -------
Cash flows from operating activities
--------------------------------------------- ---- -------- -------
Loss for the year (7,786) (1,970)
Adjustments for:
Finance expense 1,591 -
Share option compensation charge 289 67
Impairment charge 6 3,071 -
--------------------------------------------- ---- -------- -------
Operating cash flows before movement
in working capital (2,835) (1,903)
(Decrease)/increase in trade and other
payables (185) 78
--------------------------------------------- ---- -------- -------
Cash used in operating activities (3,020) (1,825)
--------------------------------------------- ---- -------- -------
Cash flows from investing activities
Increase in loans to subsidiary undertakings 3,006 1,799
--------------------------------------------- ---- -------- -------
Net cash generated from investing activities 3,006 1,799
--------------------------------------------- ---- -------- -------
Cash flows from financing activities
Proceeds from issue of ordinary share
capital 14 22
Proceeds from ordinary share capital
to be issued - 5
Net cash generated from financing activities 14 27
--------------------------------------------- ---- -------- -------
Net increase/(decrease) in cash and cash
equivalents - 1
Cash and cash equivalents at beginning
of year 10 9
--------------------------------------------- ---- -------- -------
Cash and cash equivalents at end of year 10 10
--------------------------------------------- ---- -------- -------
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies and basis of preparation
The final results announcement for the year ended 31 December
2011 has been prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union (EU),
International Accounting Standards (IAS) and IFRS Interpretations
Committee (IFRIC) interpretations and the listing rules of the
Financial Services Authority. The details of the significant
accounting policies of the Group are set out in the 2011 Annual
Report, copies of which are available from the Company or on the
Company's website. Based on audited accounts, the financial
information set out in this announcement does not constitute the
Company's statutory accounts for the year ended 31 December 2011 as
defined in Section 434 of the Companies Act 2006, but is derived
from those accounts. Statutory accounts for 2010 have been
delivered to the Registrar of Companies and those for 2011 will be
delivered after the Company's Annual General meeting. The auditors
have reported on those accounts; their reports were unqualified and
did not contain statements under Section 498(2) or (3) of Companies
Act 2006. However included in their report is an emphasis of matter
in relation to the basis of preparation in relation to matters as
disclosed below.
Going concern
In view of the notices of default having been received from both
the holders of the BioSeek notes and Silicon Valley Bank and the
lack of interest from parties to acquire the entire share capital
of the Company, the Directors have, since the year end, resolved
that both the non-BioSeek Tissue Based Solutions and BioSeek
businesses should be sold and in due course Asterand plc should be
liquidated. Accordingly, the going concern presumption in IAS 1 is
not appropriate and the accounts have been drawn up on a basis
which reflects the Directors' intention to sell both the
non-BioSeek Tissue Based Solutions and BioSeek businesses in an
orderly manner in due course, with letters of intent having been
signed for the disposal of both businesses. In drawing up the
accounts on this basis, the assets of the two businesses are
carried at depreciated cost, or if lower, written down to the
estimated realisable value based on the offers received for each
business. An orderly realisation of the Group's assets is dependent
on the continued financial support of Silicon Valley Bank and the
BioSeek note holders. No liabilities are required to be recorded in
relation to the costs to close down the businesses, as the
operating businesses themselves are not being closed but sold.
Impairment of non-current and current assets
Non-current and current assets are tested for impairment when a
triggering event occurs by comparing the carrying value of the
asset being tested with its recoverable amount. The recoverable
amount is the higher of the net selling price and value in use.
Value in use is calculated on the basis of estimated future cash
flows, using a discount rate appropriate to the Group. If the
recoverable amount is less than the carrying amount, an impairment
loss is recognised in the income statement. In view of the
Directors' decision, post year end, to sell the two businesses in
the Tissue Based Solutions segment, impairment charges reflect the
net selling price expected to be achieved in these transactions, as
value in use is considered to approximate this fair value.
2. Segmental reporting
The Directors are of the opinion that under IFRS 8 'Operating
Segments', the Group has two operating segments: Tissue Based
Solutions and Licensing. All revenue and costs are recorded in the
income statement under these two segments.
The segment information for the year ended 31 December 2011 is
as follows:
Group 2011
Tissue Based Licensing Total
Solutions $'000 $'000
$'000
-------------------------------------- -------------- ----------- -------
Revenue from external customers 24,091 - 24,091
-------------------------------------- -------------- ----------- -------
Adjusted EBITDA 1,599 (90) 1,509
-------------------------------------- -------------- ----------- -------
Gross margin 54% - 53%
-------------------------------------- -------------- ----------- -------
Share option related charge 230 - 230
-------------------------------------- -------------- ----------- -------
Depreciation and amortisation 1,084 - 1,084
-------------------------------------- -------------- ----------- -------
Exceptional items 4,733 - 4,733
-------------------------------------- -------------- ----------- -------
Interest income - normal operations 78 - 78
-------------------------------------- -------------- ----------- -------
Interest expense - normal operations 716 - 716
-------------------------------------- -------------- ----------- -------
Interest expense - exceptional
costs 1,591 - 1,591
-------------------------------------- -------------- ----------- -------
Income tax charge 1,627 - 1,627
-------------------------------------- -------------- ----------- -------
Total allocated assets 22,011 - 22,011
-------------------------------------- -------------- ----------- -------
Reduction to non-current assets
(other than financial instruments
and deferred tax assets) 1,904 - 1,904
-------------------------------------- -------------- ----------- -------
The segment information for the year ended 31 December 2010 is
as follows:
Group 2010
Tissue Based Licensing Total
Solutions $'000 $'000
$'000
------------------------------------- -------------- ----------- -------
Revenue from external customers 21,291 19 21,310
------------------------------------- -------------- ----------- -------
Adjusted EBITDA 202 (223) (21)
------------------------------------- -------------- ----------- -------
Gross margin 57% - 56%
------------------------------------- -------------- ----------- -------
Share option related charge 132 - 132
------------------------------------- -------------- ----------- -------
Depreciation and amortisation 1,022 - 1,022
------------------------------------- -------------- ----------- -------
Exceptional items 920 - 920
------------------------------------- -------------- ----------- -------
Interest income - normal operations 4 - 4
------------------------------------- -------------- ----------- -------
Interest expense - normal
operations 57 - 57
------------------------------------- -------------- ----------- -------
Income tax charge 32 - 32
------------------------------------- -------------- ----------- -------
Total allocated assets 29,528 - 29,528
------------------------------------- -------------- ----------- -------
Additions to non-current assets
(other than financial instruments
and deferred tax assets) 7,164 - 7,164
------------------------------------- -------------- ----------- -------
A reconciliation of adjusted EBITDA to loss before tax is
provided as follows:
2011 2010
$'000 $'000
------------------------------- --- -------- --------
Adjusted EBITDA for total
segments 1,509 (21)
------------------------------------ -------- --------
Share option related charge (230) (132)
------------------------------------ -------- --------
Depreciation and amortisation (1,084) (1,022)
------------------------------------ -------- --------
Exceptional items (4,733) (920)
------------------------------------ -------- --------
Finance (expense)/income (2,063) 54
------------------------------------ -------- --------
Loss before tax (6,601) (2,041)
------------------------------------ -------- --------
Reportable segments' assets are reconciled to total assets as
follows:
2011 2010
$'000 $'000
-------------------- --- ------- -------
Segment assets 22,011 29,528
------------------------- ------- -------
Unallocated:
-------------------- --- ------- -------
Deferred tax asset 4,360 4,843
------------------------- ------- -------
Total assets 26,371 34,371
------------------------- ------- -------
During the year the Tissue Based Solutions segment includes
revenues derived from a single customer that contributed to 11.2%
of total revenues (2010: no single customer exceeded 10% of total
revenues).
The licensing revenue for the year ended 31 December 2011 is
$nil (2010: $19,000). The Group continues to invest modestly to
maintain certain intellectual property in this segment.
The Group operates across four geographical segments. The UK is
the home country of the legal parent.
Revenue Revenue Net (liabilities)/assets Capital expenditure
(by destination) (by origin)
2011 2010 2011 2010 2011 2010 2011 2010
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
---------------- ---------- --------- ------- ------- -------------- ----------- ---------- ----------
United Kingdom 2,345 1,356 3,606 3,743 (8,135) (815) 52 70
---------------- ---------- --------- ------- ------- -------------- ----------- ---------- ----------
Rest of Europe 3,643 4,906 - - - - - -
---------------- ---------- --------- ------- ------- -------------- ----------- ---------- ----------
North America 14,141 12,469 20,485 17,567 15,349 15,974 440 305
---------------- ---------- --------- ------- ------- -------------- ----------- ---------- ----------
Japan 3,962 2,579 - - - - - -
---------------- ---------- --------- ------- ------- -------------- ----------- ---------- ----------
24,091 21,310 24,091 21,310 7,214 15,159 492 375
---------------- ---------- --------- ------- ------- -------------- ----------- ---------- ----------
3. Exceptional items
General and administrative items which are significant by virtue
of their size or are incidental are classified as exceptional items
in the income statement.
Exceptional items comprised the following:
Group Group
2011 2010
$'000 $'000
---------------------------------------------------- -------- ------
Professional fees in relation to acquisition,
restructuring and litigation 184 466
---------------------------------------------------- -------- ------
Severance costs 699 98
---------------------------------------------------- -------- ------
Accelerated share option charge 173 -
Fair value movements on acquisition consideration - 356
Professional fees in relation to sale of businesses 277 -
---------------------------------------------------- -------- ------
Impairment charge in relation to sale of businesses 3,400 -
---------------------------------------------------- -------- ------
4,733 920
---------------------------------------------------- -------- ------
Exceptional legal and professional expenses of $184,000 (2010:
$466,000) were incurred during 2011 and are primarily in relation
to the Group restructuring. In 2010, these costs related to the
acquisition of BioSeek, Inc, litigation to secure access to key
procurement sites in Asia and transfer pricing advisory fees.
Severance costs of $699,000 were incurred during 2011; these are
costs associated with the Group restructuring (2010: $98,000
relating to the Detroit operations restructuring). In addition, an
accelerated fair value share option adjustment of $173,000 is
included in 2011 relating to the Growth Share Plan.
Professional fees in relation to the process of selling the
Group of $277,000 were incurred during 2011 (2010: $nil),
comprising of broker and lawyer fees.
As discussed in the outlook section of the Chairman's Statement,
letters of intent to sell both the non-BioSeek Tissue Based
Solutions and BioSeek businesses have been signed. Whilst
negotiations are on-going, the current expected sales price less
costs to sell for the tissue business is such that an impairment
charge has been required to write down the carrying value of the
assets of the tissue business to the level of the expected net
proceeds. The impairment has initially been allocated against
goodwill and other intangible assets associated with the relevant
cash generating units, with an impairment charge of $1,293,000
being recorded. In addition, since the carrying value of other
non-monetary asset classes is considered to materially approximate
recoverable amounts, the Directors have re-assessed the carrying
value of inventory, such that its value has been reduced by
$2,107,000 to reflect the value implied by the expected proceeds
for the tissue business as a whole.
For further details surrounding fair value movements on
acquisition consideration in 2010, see Note 10.
4. Loss per share
Basic loss per share is calculated by dividing the loss
attributable to ordinary shareholders by the weighted average
number of 5p Ordinary Shares in issue during the year.
For diluted earnings per share, the weighted average number of
Ordinary Shares in issue is adjusted to assume conversion of all
potentially dilutive Ordinary Shares.
These represent share options granted to employees where the
exercise price is less than the average market price of the
Company's Ordinary Shares during the year ended 31 December
2011.
Since 31 December 2011, 112,794 5p ordinary shares have been
issued (2010: none).
2011 2010
------------------------------------------- -------- --------
Loss attributable to owners of the parent
($'000s) (8,228) (2,073)
------------------------------------------- -------- --------
Weighted average number of shares (000's) 118,053 115,792
------------------------------------------- -------- --------
Basic loss per Ordinary Share (7.0)c (1.8)c
------------------------------------------- -------- --------
Diluted loss per Ordinary Share (7.0)c (1.8)c
------------------------------------------- -------- --------
In the years ended 31 December 2011 and 31 December 2010, the
Group had no potentially dilutive potential Ordinary Shares in
issue because it made a loss for the year.
5. Intangible assets
Licences
and
Developed certification Computer
technology costs software Goodwill Total
Group 2011 $'000 $'000 $'000 $'000 $'000
------------------------- ----------- -------------- --------- -------- ------
Cost
At 1 January 2011 3,224 247 237 1,348 5,056
Additions - - 35 - 35
Exchange differences - - 4 - 4
------------------------- ----------- -------------- --------- -------- ------
At 31 December 2011 3,224 247 276 1,348 5,095
------------------------- ----------- -------------- --------- -------- ------
Accumulated amortisation
At 1 January 2011 141 12 125 - 278
Charge for year 161 12 46 - 219
Impairment charge - 223 97 973 1,293
Exchange differences - - - - -
------------------------- ----------- -------------- --------- -------- ------
At 31 December 2011 302 247 268 973 1,790
------------------------- ----------- -------------- --------- -------- ------
Net book value at 31
December 2011 2,922 - 8 375 3,305
------------------------- ----------- -------------- --------- -------- ------
Licences
and
Developed certification Computer
technology costs software Goodwill Total
Group 2010 $'000 $'000 $'000 $'000 $'000
------------------------------- ----------- -------------- --------- -------- ------
Cost
At 1 January 2010 - 231 190 973 1,394
Additions - 23 41 - 64
Assets acquired on acquisition
of BioSeek 3,224 - 11 375 3,610
Exchange differences - (7) (5) - (12)
------------------------------- ----------- -------------- --------- -------- ------
At 31 December 2010 3,224 247 237 1,348 5,056
------------------------------- ----------- -------------- --------- -------- ------
Accumulated amortisation
At 1 January 2010 - - 83 - 83
Charge for year 141 12 42 - 195
Exchange differences - - - - -
------------------------------- ----------- -------------- --------- -------- ------
At 31 December 2010 141 12 125 - 278
------------------------------- ----------- -------------- --------- -------- ------
Net book value at 31
December 2010 3,083 235 112 1,348 4,778
------------------------------- ----------- -------------- --------- -------- ------
Net book value at 1 January
2010 - 231 107 973 1,311
------------------------------- ----------- -------------- --------- -------- ------
The amortisation charge arising on intangible assets other than
goodwill for the year of $219,000 (2010: $195,000) has been charged
to general and administrative expenses (normal operations).
The Company owns no intangible assets.
As discussed in the outlook section of the Chairman's Statement
letters, of intent to sell both the non-BioSeek Tissue Based
Solutions and BioSeek businesses have been signed. Whilst
negotiations are on-going, the current expected sales price less
costs to sell for the non BioSeek Tissue Based Solutions business
is such that an impairment charge has been required to write down
the carrying value of the assets of the non BioSeek Tissue Based
Solutions business to the level of the expected net proceeds. The
impairment has initially been allocated against goodwill and other
intangible assets associated with the relevant cash generating
units, with an impairment charge of $1,293,000 being recorded.
The remaining goodwill of $375,000 arose on the acquisition of
the BioSeek business in 2010. The carrying value of goodwill has
been assessed based on the higher of fair value less cost to sell
and value in use. Based on the offer received for the business, no
impairment charge was necessary.
6. Details of principal subsidiaries
Company Company
2011 2010
Fixed asset investments $'000 $'000
--------------------------------------- ------- -------
Shares in Group undertakings
--------------------------------------- ------- -------
As at 1 January 24,574 16,163
------------------------------------------- ------- -------
Capital contribution relating to share
based payments 114 65
------------------------------------------- ------- -------
Acquisition of BioSeek - 8,346
------------------------------------------- ------- -------
Impairment charge (3,071) -
------------------------------------------- ------- -------
As at 31 December 21,617 24,574
------------------------------------------- ------- -------
The capital contribution relates to the share option
compensation charge in respect of share options granted by the
Company to employees of Asterand UK Limited, Asterand, Inc. and
BioSeek, LLC.
Given the intention of the Directors to sell both the
non-BioSeek Tissue Based Solutions and BioSeek businesses, they
have reviewed the carrying value of investments and recognised an
impairment of $3,071,000.
For further details surrounding the acquisition of BioSeek, see
Note 10.
Details of subsidiary undertakings are as follows:
Proportion of
nominal value
of issued shares
Description of and voting rights
Name of undertaking Country of incorporation shares held held by the Group
--------------------- -------------------------- ----------------- -------------------
Asterand UK Limited England and Wales ordinary shares 100%
--------------------- -------------------------- ----------------- -------------------
1 cent class A
Asterand, Inc. US common stock 100%
--------------------- -------------------------- ----------------- -------------------
The principal business activity of Asterand UK Limited is the
use of human biological information in drug discovery and
development. Asterand, Inc.'s principal activity is the collection
and supply of human tissue samples to pharmaceutical and
biotechnology companies.
Asterand UK Limited owns 100% of the issued share capital of the
following company:
Name of undertaking Country of incorporation Description of Principal activities
shares held
------------------------ ------------------------- --------------- ---------------------
Pharmagene Laboratories England and Wales GBP1 ordinary Trustees of the
Trustees Limited shares employee share
ownership plan
------------------------ ------------------------- --------------- ---------------------
Asterand Inc owns 100% of the membership interests of the
following company:
Name of undertaking Country of incorporation Description of Principal activities
shares held
----------------------- ------------------------- ------------------- ---------------------
BioSeek, LLC (acquired US 100% of membership Drug discovery
as BioSeek, Inc.) interests services
----------------------- ------------------------- ------------------- ---------------------
All of the above subsidiaries are included in the consolidated
accounts and have a year end of 31 December.
7. Biobank inventory
Group Group
2011 2010
$'000 $'000
--------------- ------ ------
Raw materials 1,204 1,016
------------------- ------ ------
Finished goods 5,345 8,120
------------------- ------ ------
6,549 9,136
------------------ ------ ------
The cost of inventories recognised as an expense and included in
cost of sales in 2011 amounted to $3,990,329
(2010: $3,611,830).
During 2011, the value of inventories written down to residual
value and subsequently included in cost of sales amounted to
$1,962,000 (2010: $1,482,000). There is also an obsolescence
provision of $449,000 (2010: $449,000) against 'finished goods' to
provide against a specific set of specimens that have become
delinked from their clinical data.
On 31 December 2011, the carrying value of the biobank inventory
was reduced to $6,549,000 due to an impairment charge of $2,107,000
to write down the carrying value of inventory to the amounts
implied by the expected recoverable amounts from the sale of the
non-BioSeek Tissue Based Solutionsbusiness.
8. Other financial liabilities
Current
Group Group
2011 2010
$'000 $'000
-------------------------------------- ------ ------
Current portion of debt 2,428 703
------------------------------------------ ------ ------
Finance leases 5 12
------------------------------------------ ------ ------
Amounts due to former shareholders of
BioSeek (See Note 10) 6,591 7,624
------------------------------------------ ------ ------
Warrants 12 -
------------------------------------------ ------ ------
9,036 8,339
----------------------------------------- ------ ------
Non-current
Group Group
2011 2010
$'000 $'000
--------------- ------ ------
Long term debt - 2,348
------------------- ------ ------
Finance leases - 5
------------------- ------ ------
- 2,353
------------------ ------ ------
A $3 million three year term loan with Silicon Valley Bank was
in drawn down in 2010 and timely repayments have been made
throughout 2011. The loan bears interest at 3.25% above the Prime
Rate and 5.0% above Prime Rate when in default. At 31 December 2011
the Group had breached covenants attaching to its Silicon Valley
Bank loan and loan notes borrowings, such that these amounts became
payable on demand.
The loan arrangement fees for the term loan have been deducted
from the amounts borrowed and are being amortised over a three year
period.
Finance lease liabilities
Group Group
2011 2010
Gross finance lease liabilities - minimum
lease payments $'000 $'000
------------------------------------------ ----- -----
No later than one year 6 15
------------------------------------------ ----- -----
Later than one year and no later than
five years - 5
------------------------------------------ ----- -----
6 20
------------------------------------------ ----- -----
Future finance charges on finance leases (1) (3)
------------------------------------------ ----- -----
Present value of finance leases 5 17
------------------------------------------ ----- -----
The present value of finance lease liabilities is as
follows:
Group Group
2011 2010
$'000 $'000
-------------------------------------- ------ ------
No later than one year 5 12
------------------------------------------ ------ ------
Later than one year and no later than
five years - 5
------------------------------------------ ------ ------
5 17
----------------------------------------- ------ ------
9. Related party transactions
The Group did not enter into any related party transactions
during the year.
During 2010, the Group paid $117,000 on behalf of Martyn Coombs,
former CEO, to cover the taxes payable on his Growth Share
Ownership Plan implemented during the year. This amount was
subsequently reimbursed and was fully repaid by 31 December
2010.
The Company entered into the following transactions in the year
with subsidiaries of the Group:
Company Company
2011 2010
Intercompany receivable/(payable) $'000 $'000
---------------------------------- -------- -------
At 1 January 3,001 4,767
-------------------------------------- -------- -------
Amounts received (5,330) (1,766)
-------------------------------------- -------- -------
At 31 December (2,329) 3,001
-------------------------------------- -------- -------
10. BioSeek acquisition
The Group acquired 100% of the share capital of BioSeek, Inc.
("BioSeek") on 18 February 2010.
The initial consideration paid by Asterand was a sum of $1.0
million satisfied by the issue of 2,695,856 New Asterand Shares at
$0.37 (22p) per share - calculated based on the per share closing
prices of Ordinary Shares on the London Stock Exchange during the
thirty (30) consecutive trading day period ended on 17 November
2009, converted into U.S. dollars at the exchange rate for
purchasing U.S. dollars with pound sterling as quoted in the
Financial Times on such date.
An additional sum of $8.5 million became payable in April 2011
based on a formula applied to 2010 BioSeek revenues.
As previously announced, the first US $3 million of this payment
was to be satisfied through the issue of 8.1 million Asterand
shares, and the remaining $5.5 million consideration was to be paid
in cash. All amounts recorded at the 31 December 2010 balance sheet
date (valued under IFRS 3 (revised), 'Business combinations') were
made under this assumption.
However, in April 2011 the Group subsequently agreed with the
former BioSeek shareholders that the entire $8.5 million of
contingent consideration would be satisfied with cash rather than
cash and shares; $2.5 million was paid in July 2011 and the
remaining $6 million to be satisfied by the issue of loan notes
("Amounts due to former shareholders of BioSeek") that mature over
the period to December 2013. The Company has entered into a warrant
agreement with the former BioSeek shareholders whereby they have
the right to subscribe for 5.2 million new Ordinary Shares at
14.12p per share. This warrant agreement will expire on 22 July
2014.
The contingent consideration was classified as a financial
liability under IFRS 3 (revised). Under IAS 39, 'Financial
instruments: Recognition and measurement', the change in the
settlement of debt to the former shareholders of BioSeek has been
treated as an extinguishment of the original financial liability on
the balance sheet. As a result, the fair value of the re-negotiated
debt is recorded as a liability on the balance sheet, with the
movement in fair value being recorded through the income statement.
The fair value of the cash and loan notes at inception was
$8,968,000. These financial liabilities have been designated at
inception at fair value through profit or loss and therefore they
will be recorded at their fair value each reporting period, with
subsequent changes in fair value also being recorded through the
income statement. The fair value of the loan notes at 31 December
2011 was $6,537,000.
Under IFRS, warrants with an exercise price denominated in a
currency (GBP) different to that of the Company's functional
currency (USD) should be recorded at their fair value within
liabilities, with changes in their fair value recorded through the
income statement. The fair value of the warrants was initially
recorded at $716,000. The warrants will continue to be adjusted
through the income statement each reporting period until such time
as they are exercised or expire. The fair value of the warrants at
31 December 2011 was $54,000.
The movement in fair value between these financial liabilities
and their subsequent re-measurement at the balance sheet date has
been recorded as exceptional interest expense as follows:
Other financial liabilities
- amounts due to former shareholders of BioSeek
31 December 31 December Change in
2011 2010 Fair value
$'000 $'000 $'000
--------------------------------------- ----------- ----------- -----------
Fair value of contingent consideration - 7,624 7,624
------------------------------------------- ----------- ----------- -----------
Fair value of cash and loan notes
at inception 8,968 - (8,968)
------------------------------------------- ----------- ----------- -----------
Re-measurement of loan notes
to fair value 193 - (193)
------------------------------------------- ----------- ----------- -----------
Initial fair value of warrants 716 - (716)
------------------------------------------- ----------- ----------- -----------
Re-measurement of warrants to
fair value (662) - 662
------------------------------------------- ----------- ----------- -----------
Interest expense - exceptional
costs (1,591)
------------------------------------------- ----------- ----------- -----------
The warrants have been classified within current financial
liabilities.
11. Post balance sheet events
The Directors have resolved that both the non-BioSeek Tissue
Based Solutions and BioSeek businesses should be sold, with letters
of intent having been signed for the disposal of both businesses.
Both of these businesses form part of the Tissue Based Solutions
segment. The disposal of each of these businesses is considered to
be a class 1 disposal, and will therefore require shareholder
approval, but the Directors expect the sale to complete by 30 June
2012.
Notice of Annual General Meeting
-- Asterand Plc will hold its Annual General Meeting at its
registered office at 2 Orchard Road, Royston, Hertfordshire, SG8
5HD on Tuesday 26 June 2012 at 10:00 am.
The following documents have been sent to shareholders
today:
-- Annual Report and Accounts 2011
-- Notice of 2012 Annual General Meeting ('AGM')
-- Form of Proxy
In accordance with Listing Rule 9.6.1 Asterand Plc has submitted
two copies of each of the above documents to the UK Listing
Authority ('UKLA') and these documents will shortly be available
for inspection at the UKLA's Document Viewing Facility, which is
situated at: Financial Services Authority 25 The North Colonnade
Canary Wharf London E14 5HS Tel: +44 (0) 20 7066 1000. Copies of
the Annual Report and Accounts 2011 and Notice of AGM, will be
available on the Company's website at www.asterand.com on 30 April
2012. For further information contact:
Jack Davis, Chairman, Interim CEO and Company Secretary
Tel No: +44 (0) 1763 211600
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BKLFLLZFEBBE
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