TIDMFFWD
RNS Number : 4319W
FastForward Innovations Limited
11 December 2019
FastForward Innovations Ltd / AIM: FFWD / Sector: Closed End
Investments
11 December 2019
FastForward Innovations Ltd
("FastForward", "FFWD" or the "Company")
Interim Results
FastForward Innovations Ltd, the AIM listed closed end
investment fund with a focus on disruptive, high growth technology
and life sciences businesses, is pleased to announce its interim
results for the six months ended 30 September 2019.
Highlights from Investments
-- Progress across diverse portfolio of disruptive, high growth
technology and life sciences businesses
-- EMMAC Life Sciences Ltd. raised GBP15 million via the
successful issue of convertible loan notes, as announced post
period end, on 15 October 2019
-- Factom launched minable network of stablecoins, PegNet, as
announced post period end, on 15 October 2019
-- Successful closure of Juvenescence's Series B funding round
at the targeted $100 million, as announced on 19 August 2019
-- Investment in Portage Biotech Inc. in exchange for previous holding in Intensity Therapeutics
-- Leap Gaming partnered with established online betting and
gaming platform Mansion Casino, as announced on 27 September
2019
Chairman's Statement
This has been a positive period for FastForward as the value of
its investments in fast-growing, industry leading businesses,
specifically in the life science, health and technology arenas,
become apparent.
Our aim is to give investors exposure to disruptive growth
opportunities which they would otherwise be unable to access. To
this end, we currently have nine investments of varying size and
spanning several sectors, which we believe have the near-term
potential to re-rate and thus significantly impact our NAV.
Notably, FastForward does not charge management fees or take a fee
on success; the intention is to either re-invest the capital
generated or ultimately return value to investors by way of
dividends, share-buybacks or other distributions.
During the period, several investee companies have been active.
Our second investment in the medical cannabis sector, EMMAC Life
Sciences Ltd. ("EMMAC"), raised GBP15 million via the issue of
convertible loan notes. As Europe's leading independent cannabis
company, I am delighted with the response to EMMAC's fundraise,
which reflects the continuing attraction of EMMAC and its business
plan to investors, despite the regulatory difficulties facing the
sector.
Our investments within the technology sector are also showing
promise. Post period end in October 2019, we announced that
blockchain solutions provider, Factom, launched PegNet, an open,
distributed, autonomous and minable stablecoin network for an asset
backed payment cryptocurrency, that enables users to store value in
any of the listed fiat currencies, precious metals or
cryptocurrencies. Juvenescence, a biopharmaceutical company focused
on therapeutic assets to target aging, regeneration and the
diseases of aging, also made headway having raised $100 million
through a Series B financing round. Further details of investee
news can be found in the Investee Company Review section below.
On the corporate side, I have taken on the role of interim
Chairman, in addition to my role as CEO, replacing Jim Mellon who
resigned in August 2019 to focus on his other business activities,
particularly Juvenescence in which we continue to be invested. I'd
like to thank Jim for his service and assistance over the years and
look forward to continuing to work with him at Juvenescence.
As our financial statements highlight, there is a disparity
between the 30 September 2019 market cap of circa GBP11 million and
the NAV of circa GBP20.4 million. It should be noted that whilst we
have enjoyed gains on the back of foreign exchange rates between
the Dollar and the Pound Sterling given the number of US
investments, the NAV is liable to fluctuate in response to the
effects on the exchange rate from the uncertainties of the US /
China trade discussions. At home in the UK, the stock market is
also experiencing uncertainties. We are hopeful that once there is
more clarity politically and economically investors will follow the
lead of foreign investors, who continue to see the value of London
listed companies, and that our share price will respond
accordingly.
Looking ahead, this is an exciting time for FastForward as our
investee companies make notable progress towards building
revenue/profits and becoming leaders in their niche markets, which
we hope will ultimately lead to a liquidity event. In tandem, we
continue to evaluate other exciting and innovative opportunities
within the medical cannabis, wellness and technology fields where
we believe value can be generated. I look forward to updating
shareholders as our investment portfolio advances and
strengthens.
Lorne Abony
Chairman
11 December 2019
Investee Company Review
Juvenescence Ltd (investment position: c.12.5% of NAV) is a
biopharmaceutical company with a pipeline of therapeutic assets
that target aging, regeneration and the diseases of aging. It
actively works with scientists and leading research institutions to
create joint ventures combining their IP and its own resources.
Juvenescence has raised USD $165 million to-date and its last
fundraising was at a valuation of $400 million; it hopes to IPO in
2020. During the period, Juvenescence announced the successful
closure of its Series B financing round at the targeted $100
million, providing it with sufficient working capital to progress
many of its programmes to their initial inflection points.
EMMAC Life Sciences Plc (investment position: c.12% of NAV) is
Europe's largest medical cannabis company by territory. It brings
together cutting-edge scientific research with the latest
innovations in cannabis cultivation, extraction and production and
has plans for an IPO in the future. Post period end in October
2019, it was announced by the Company that EMMAC may have an
implied value of greater than GBP150 million based on the
conversion price of the GBP15 million convertible loan notes
issued.
Portage Biotech Inc. (investment position: c.5.5% of NAV) is a
biotechnology company focused on developing best-in-class or
first-in-class therapeutics. To this end, it provides funding and
advice to a portfolio of nine subsidiary companies; projects under
development include research and treatments for various cancers,
eye disease and acute kidney injury. This was a new investment for
the Company during this period, where we took a stake in Portage in
exchange for our previous holding in Intensity Therapeutics. Whilst
there have been some issues (notably the suspension of trading of
Portage stock on the Canadian Securities Exchange ("CSE") due to
late filing of accounts), we understand from a recent announcement
dated 27 November 2019 that the CSE have granted Portage an
extension to remedy the issue and lift the suspension. Portage
therefore expects that this will be resolved in the near future and
importantly, there is no impairment to the carrying value of the
investment in the meantime. We are excited to watch the development
of both Portage and its underlying therapeutic companies.
Leap Gaming (investment position: 28% of NAV) is a B2B developer
of high-end virtual reality ('VR') gaming applications whose games
are already offered by leading global online and retail gaming
operators generating tens of thousands of engagement points with
end-users. It has a strategic partnership with global media giant,
IMG, which is also one of the large investors, to drive the
development of the business. In September 2019, Leap Gaming signed
a new partnership with the established online betting and gaming
platform Mansion Casino around distribution of Leap Gaming's game
portfolio across Mansion's footprint.
Yooya (investment position: c.8% of NAV) is currently a
content-driven e-commerce platform focused on Asia, however,
proposals are under review, which may result in it being converted
to a CBD sales and marketing platform.
Vemo Education (investment position: c.1.5% of NAV) is one of
the leading US providers of income share agreement programmes,
which enable students to defer some of their costs to a US college
or university in exchange for a fixed percentage of their
post-graduation income for a fixed period. This increases
transparency around student experiences, helping schools improve,
compete, succeed and fundamentally change the relationship they
have with students. Vemo recently raised additional capital and is
in a strong position to continue to develop the business over the
coming years.
Factom (investment position: c.26.5% of NAV) is a recognised
leader in providing blockchain solutions that preserve, ensure and
validate digital assets. The commercial potential of its three
divisions is beginning to be realised, having recently signed
several large corporate and government clients that are likely to
deliver significant recurring revenues. It is looking to secure
bridge funding of up to US$4 million in Q1 2020, if successful this
will aid in supporting company development and prove its business
case ahead of a Series B funding round.
Cryptologic (investment position: c.2% of NAV) is a Canadian
listed company currently involved in cryptocurrency mining, but
which is seeking to pivot into the Canadian Cannabis Industry by
way of a proposed acquisition of assets from Wayland Group and the
sale of its mining business. The specifics of the proposed deal
would preclude FastForward's continued involvement in the company
due to UK regulatory constraints and is not in line with its
investment mandate. As such, FastForward is in the process of
selling its investment in Cryptologic, which is by way of market
traded, convertible debentures; the sale of any outstanding
debentures held by FastForward will in some ways be contingent upon
the proposed Wayland transaction and liquidity in the debenture
market.
Interim Financial Statements
FASTFORWARD INNOVATIONS LIMITED
UNAUDITED CONDENSED HALF-YEARLY REPORT AND FINANCIAL
STATEMENTS
FOR THE SIX MONTHSED 30 SEPTEMBER 2019
INVESTING POLICY
The Company's Investing Policy is to invest in and/or acquire
companies which have significant intellectual property rights which
they are seeking to exploit, principally within the technology
sector (including digital and content focused businesses) and the
life sciences sectors (including biotech and pharmaceuticals).
Initially the geographical focus will be North America and Europe
but investments may also be considered in other regions to the
extent that the Board considers that valuable opportunities exist
and positive returns can be achieved.
In selecting investment opportunities, the Board will focus on
businesses, assets and/or projects that are available at attractive
valuations and hold opportunities to unlock embedded value. Where
appropriate, the Board may seek to invest in businesses where it
may influence the business at a board level, add its expertise to
the management of the business, and utilize its industry
relationships and access to finance; as such investments are likely
to be actively managed.
The Company's interest in a proposed investment and/or
acquisition may range from a minority position to full ownership
and may comprise one investment or multiple investments. The
proposed investments may be in either quoted or unquoted companies;
are likely to be made by direct acquisitions or through an
immediate investment; and may be in companies, partnerships,
earn-in joint ventures, debt or other loan structures. The Board
may focus on investments where intrinsic value can be achieved from
the restructuring of investments or merger of complementary
businesses.
The Board expects that investments will typically be held for
the medium to long term, although short term disposal of assets
cannot be ruled out if there is an opportunity to generate an
attractive return for Shareholders. The Board will place no minimum
or maximum limit on the length of time that any investment may be
held.
There is no limit on the number of projects into which the
Company may invest and the Company's financial resources may be
invested in a number of propositions or in just one investment,
which may be deemed to be a reverse takeover under the AIM Rules.
The Directors intend to mitigate risk by appropriate due diligence
and transaction analysis. Any transaction constituting a reverse
takeover under the AIM Rules will also require Shareholder
approval. The Board considers that as investments are made, and new
promising investment opportunities arise, further funding of the
Company may also be required.
Where the Company builds a portfolio of related assets it is
possible that there may be cross holdings between such assets. The
Company does not currently intend to fund any investments with debt
or other borrowings but may do so if appropriate. Investments 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 Board may also offer new
Ordinary Shares by way of consideration as well as or in lieu of
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 will conduct initial due diligence appraisals of
potential businesses or projects and, where it believes that
further investigation is warranted, it intends to appoint
appropriately qualified persons to assist. The Board believes it
has a broad range of contacts through which it is likely to
identify various opportunities which may prove suitable. The Board
believes its expertise will enable it to determine quickly which
opportunities could be viable and so progress quickly to formal due
diligence. The Company will not have a separate investment manager.
The Board proposes to carry out a comprehensive and thorough
project review process in which all material aspects of a potential
project or business will be subject to rigorous due diligence, as
appropriate. Due to the nature of the sector in which the Company
is focused it is unlikely that cash returns will be made in the
short to medium term; rather the Company expects a focus on capital
returns over the medium to long term.
CHAIRMAN'S STATEMENT
I am pleased to present the report and financial statements of
FastForward Innovations Limited (the "Company" or "FastForward")
for the six months ended 30 September 2019.
This has been a positive period for FastForward as the value of
its investments in fast-growing, industry leading businesses,
specifically in the life science, health and technology arenas,
become apparent.
Our aim is to give investors exposure to disruptive growth
opportunities which they would otherwise be unable to access. To
this end, we currently have nine investments of varying size and
spanning several sectors, which we believe have the near-term
potential to re-rate and thus significantly impact our NAV.
Notably, FastForward does not charge management fees or take a fee
on success; the intention is to either re-invest the capital
generated or ultimately return value to investors by way of
dividends, share-buybacks or other distributions.
During the period, several investee companies have been active.
Our second investment in the medical cannabis sector, EMMAC Life
Sciences Ltd. ("EMMAC"), raised GBP15 million via the issue of
convertible loan notes. As Europe's leading independent cannabis
company, I am delighted with the response to EMMAC's fundraise,
which reflects the continuing attraction of EMMAC and its business
plan to investors, despite the regulatory difficulties facing the
sector.
Our investments within the technology sector are also showing
promise. Post period end in October 2019, we announced that
blockchain solutions provider, Factom, launched PegNet, an open,
distributed, autonomous and minable stablecoin network for an asset
backed payment cryptocurrency, that enables users to store value in
any of the listed fiat currencies, precious metals or
cryptocurrencies. Juvenescence, a biopharmaceutical company focused
on therapeutic assets to target aging, regeneration and the
diseases of aging, also made headway having raised $100 million
through a Series B financing round. Further details of investee
news can be found in the Investee Company Review section below.
On the corporate side, I have taken on the role of interim
Chairman, in addition to my role as CEO, replacing Jim Mellon who
resigned in August 2019 to focus on his other business activities,
particularly Juvenescence in which we continue to be invested. I'd
like to thank Jim for his service and assistance over the years and
look forward to continuing to work with him at Juvenescence.
As our financial statements highlight, there is a disparity
between the 30 September 2019 market cap of circa GBP11 million and
the NAV of circa GBP20.4 million. It should be noted that whilst we
have enjoyed gains on the back of foreign exchange rates between
the Dollar and the Pound Sterling given the number of US
investments, the NAV is liable to fluctuate in response to the
effects on the exchange rate from the uncertainties of the US /
China trade discussions. At home in the UK, the stock market is
also experiencing uncertainties. We are hopeful that once there is
more clarity politically and economically investors will follow the
lead of foreign investors, who continue to see the value of London
listed companies, and that our share price will respond
accordingly.
Looking ahead, this is an exciting time for FastForward as our
investee companies make notable progress towards building
revenue/profits and becoming leaders in their niche markets, which
we hope will ultimately lead to a liquidity event. In tandem, we
continue to evaluate other exciting and innovative opportunities
within the medical cannabis, wellness and technology fields where
we believe value can be generated. I look forward to updating
shareholders as our investment portfolio advances and
strengthens.
Results
The net assets of the Company at 30 September 2019 were
GBP20,401,000 (31 March 2019: GBP19,072,000), equal to net assets
of 12.63p per Ordinary Share (31 March 2019: 11.81p per Ordinary
Share).
Lorne Abony
Chairman
10 December 2019
INVESTEE COMPANY REVIEW
Performance and valuation
The Company's Net Asset Value ("NAV") per share stands at 12.63p
per share compared to 11.81p at 31 March 2019. Our share price
moved from 9.79p per share at 31 March 2019 to 6.85p per share at
30 September 2019.
Portfolio
The table below lists the Company's holdings as at 30 September
2019.
Holding Share Category Country Number Valuation
Class of Incorporation of Shares at
Held at
30 September
2019
30
September
2019
(GBP'000)
Juvenescence Biotech /
Limited Ordinary Healthcare BVI 128,205 2,576
EMMAC Life
Sciences Biotech /
Ltd Ordinary Healthcare England 6,666,667 2,500
Series Blockchain
Factom, Inc. Seed Tech USA 400,000 581
Blockchain
Factom, Inc. SAFE note Tech USA N/A 4,880
Leap Gaming
(Fralis
LLC) Units Gaming Nevis 1,512 5,710
Series
Yooya Media Seed Media and
(EDA) Preferred Content BVI 27,255 1,586
Portage Biotech /
Biotech Inc. Ordinary Healthcare BVI 12,980,061 1,119
Vemo
Education Pref Series
Inc. Seed 2 Edtech USA 1,000,000 264
Convertible
Cryptologic Debentures Blockchain
Corp & Warrants Tech Canada N/A 386
Diabetic Boot Ordinary Biotech / England 25,978 -
Company Healthcare
-------------- ------------- ------------ ------------------ ------------------------------------- -----------------------------------
Total Investment
Value 19,602
Cash and other net
current assets 799
-----------------------------------
Net Asset Value 20,401
===================================
Juvenescence Ltd (investment position: c.12.5% of NAV) is a
biopharmaceutical company with a pipeline of therapeutic assets
that target aging, regeneration and the diseases of aging. It
actively works with scientists and leading research institutions to
create joint ventures combining their IP and its own resources.
Juvenescence has raised USD $165 million to-date and its last
fundraising was at a valuation of $400 million; it hopes to IPO in
2020. During the period, Juvenescence announced the successful
closure of its Series B financing round at the targeted $100
million, providing it with sufficient working capital to progress
many of its programmes to their initial inflection points.
INVESTEE COMPANY REVIEW (continued)
EMMAC Life Sciences Plc (investment position: c.12% of NAV) is
Europe's largest medical cannabis company by territory. It brings
together cutting-edge scientific research with the latest
innovations in cannabis cultivation, extraction and production and
has plans for an IPO in the future. Post period end in October
2019, it was announced by the Company that EMMAC may have an
implied value of greater than GBP150 million based on the
conversion price of the GBP15 million convertible loan notes
issued.
Portage Biotech Inc. (investment position: c.5.5% of NAV) is a
biotechnology company focused on developing best-in-class or
first-in-class therapeutics. To this end, it provides funding and
advice to a portfolio of nine subsidiary companies; projects under
development include research and treatments for various cancers,
eye disease and acute kidney injury. This was a new investment for
the Company during this period, where we took a stake in Portage in
exchange for our previous holding in Intensity Therapeutics. Whilst
there have been some issues (notably the suspension of trading of
Portage stock on the Canadian Securities Exchange ("CSE") due to
late filing of accounts), we understand from a recent announcement
dated 27 November 2019 that the CSE have granted Portage an
extension to remedy the issue and lift the suspension. Portage
therefore expects that this will be resolved in the near future and
importantly, there is no impairment to the carrying value of the
investment in the meantime. We are excited to watch the development
of both Portage and its underlying therapeutic companies.
Leap Gaming (investment position: 28% of NAV) is a B2B developer
of high-end virtual reality ('VR') gaming applications whose games
are already offered by leading global online and retail gaming
operators generating tens of thousands of engagement points with
end-users. It has a strategic partnership with global media giant,
IMG, which is also one of the large investors, to drive the
development of the business. In September 2019, Leap Gaming signed
a new partnership with the established online betting and gaming
platform Mansion Casino around distribution of Leap Gaming's game
portfolio across Mansion's footprint.
Yooya (investment position: c.8% of NAV) is currently a
content-driven e-commerce platform focused on Asia, however,
proposals are under review, which may result in it being converted
to a CBD sales and marketing platform.
Vemo Education (investment position: c.1.5% of NAV) is one of
the leading US providers of income share agreement programmes,
which enable students to defer some of their costs to a US college
or university in exchange for a fixed percentage of their
post-graduation income for a fixed period. This increases
transparency around student experiences, helping schools improve,
compete, succeed and fundamentally change the relationship they
have with students. Vemo recently raised additional capital and is
in a strong position to continue to develop the business over the
coming years.
Factom (investment position: c.26.5% of NAV) is a recognised
leader in providing blockchain solutions that preserve, ensure and
validate digital assets. The commercial potential of its three
divisions is beginning to be realised, having recently signed
several large corporate and government clients that are likely to
deliver significant recurring revenues. It is looking to secure
bridge funding of up to US$4 million in Q1 2020, if successful this
will aid in supporting company development and prove its business
case ahead of a Series B funding round.
INVESTEE COMPANY REVIEW (continued)
Cryptologic (investment position: c.2% of NAV) is a Canadian
listed company currently involved in cryptocurrency mining, but
which is seeking to pivot into the Canadian Cannabis Industry by
way of a proposed acquisition of assets from Wayland Group and the
sale of its mining business. The specifics of the proposed deal
would preclude FastForward's continued involvement in the company
due to UK regulatory constraints and is not in line with its
investment mandate. As such, FastForward is in the process of
selling its investment in Cryptologic, which is by way of market
traded, convertible debentures; the sale of any outstanding
debentures held by FastForward will in some ways be contingent upon
the proposed Wayland transaction and liquidity in the debenture
market.
DIRECTORS' RESPONSIBILITIES STATEMENT
The Directors are responsible for preparing these unaudited
condensed half-yearly financial statements, which have not been
reviewed or audited by the Company's independent auditors, and are
required to:
-- prepare the unaudited half-yearly financial statements in
accordance with International Accounting Standard 34: Interim
Financial Reporting;
-- include a fair review of important events that have occurred
during the period, and their impact on the unaudited half-yearly
financial statements, together with a description of the principle
risks and uncertainties of the Company for the remaining six months
of the financial year as detailed in the Chairman's Statement and
Investee Company Review; and
-- include a fair review of related party transactions that have
taken place during the six month period which have had a material
effect on the financial position or performance of the Company,
together with disclosure of any changes in related party
transactions from the last annual financial statements which have
had a material effect on the financial position of the Company in
the current period.
The Directors confirm that the unaudited condensed half-yearly
financial statements comply with the above requirements and are
signed on behalf of the Board of Directors by:
Lance De Jersey Ian Burns
Director Director
10 December 10 December
2019 2019
CONDENSED HALF-YEARLY STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 September 2019
1 April 2019 1 April 2018
to to
30 September 30 September
2019 2018
(unaudited) (unaudited)
Note GBP'000 GBP'000
Investment gains and losses
Realised gain/(loss) on investments at
fair value through profit and loss 5 528 (418)
Unrealised gain on investments at fair
value through profit and loss 5 1,156 1,686
Interest income on investments at fair
value through profit and loss 58 33
------------- -------------
Total investment gains 1,742 1,301
Income
Bank interest income 11 2
Total income 11 2
Expenses
Legal and professional fees (109) (90)
Adviser and broker's fees (36) (63)
Administration fees (55) (40)
Other expenses (30) (99)
4,
Recognition of Directors share based expense 12 (85) (78)
Directors' remuneration and expenses 12 (225) (127)
Total expenses (540) (497)
Net profit from operating activities before
gains and losses on foreign currency exchange 1,213 806
------------- -------------
Net foreign currency exchange gain 31 69
Total comprehensive profit for the period 1,244 875
============= =============
Profit per Ordinary Share - basic and
diluted 7 0.77p 0.62p
All the items in the above statement are derived from continuing
operations.
The accompanying notes on pages 10 to 17 form an integral part
of these unaudited condensed half-yearly financial statements.
CONDENSED STATEMENT OF FINANCIAL POSITION
as at 30 September 2019
30 September 31 March
2019 2019
(unaudited) (audited)
Note GBP'000 GBP'000
Non-current assets
Financial assets designated at fair value
through profit or loss 5 19,602 18,604
------------- ----------
Current assets
Other receivables 58 112
Cash and cash equivalents 999 504
1,057 616
Total assets 20,659 19,220
------------- ----------
Current liabilities
Payables and accruals (258) (148)
Total liabilities (258) (148)
Net assets 20,401 19,072
============= ==========
Capital and reserves attributable to equity
holders of the Company
Share capital 11 1,614 1,614
Deferred share reserve 11 630 630
Employee stock option reserve 1,318 1,233
Other reserve 2,293 2,293
Distributable reserves 14,546 13,302
Total equity shareholders' funds 20,401 19,072
============= ==========
Net assets per Ordinary Share - basic
and diluted 10 12.63p 11.81p
The accompanying notes on pages 10 to 17 form an integral part
of these unaudited condensed half-yearly financial statements.
CONDENSED HALF-YEARLY STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2019 (unaudited)
Employee
Deferred stock
Share shares Other option Distributable
capital reserve reserve reserve reserves Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 March
2019 1,614 630 2,293 1,233 13,302 19,072
Total comprehensive
profit for the period - - - - 1,244 1,244
Transactions with
shareholders
Employee share scheme
- value of employee
services - - - 85 - 85
Balance at 30 September
2019 1,614 630 2,293 1,318 14,546 20,401
================== ========= ========= ========= ============== ========
Employee
Deferred stock
Share shares Other option Distributable
capital reserve reserve reserve reserves Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 March
2018 1,306 630 2,293 1,086 8,219 13,534
Total comprehensive
profit for the period - - - - 875 875
Transactions with
shareholders
Issue of Ordinary
shares 308 - - - 3,618 3,926
Employee share scheme
- value of employee
services - - - 83 - 83
Balance at 30 September
2018 1,614 630 2,293 1,169 12,712 18,418
================== ========= ========= ========= ============== ========
The accompanying notes on pages 10 to 17 form an integral part
of these unaudited condensed half-yearly financial statements.
CONDENSED HALF-YEARLY STATEMENT OF CASH FLOWS
for the six months ended 30 September 2019
1 April 2019 1 April
to 2018 to
30 September 30 September
2019 2018
(unaudited) (unaudited)
GBP'000 GBP'000
Cash flows from operating activities
Bank interest received 6 2
Other Income 3 -
Nominated Adviser and broker's fees paid (75) (116)
Legal and professional fees paid (124) (105)
Administration fees paid (51) (29)
Other expenses paid (35) (50)
Directors' remuneration paid (65) (71)
Net cash outflow from operating activities (341) (369)
-------------- --------------
Cash flows from investing activities
Cash flows from investing activities
Purchase of investments - (9,007)
Sale of investments 805 8,307
-------------- --------------
Net cash inflow/(outflow) from investing
activities 805 (700)
-------------- --------------
Cash flows from financing activities
Proceeds from issue of Ordinary Shares - 3,926
Net cash inflow from financing activities - 3,926
(Decrease)/increase in cash and cash
equivalents 464 2,857
============== ==============
Cash and cash equivalents brought forward 504 72
(Decrease)/Increase in cash and cash
equivalents 464 2,857
Foreign exchange movement 31 69
Cash and cash equivalents carried forward 999 2,998
============== ==============
The accompanying notes on pages 10 to 17 form an integral part
of these unaudited condensed half-yearly financial statements.
NOTES TO THE CONDENSED HALF-YEARLY FINANCIAL STATEMENTS
for the six months ended 30 September 2019
1. General Information
FastForward Innovations Limited ("The Company") is a
closed-ended investment company. 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.
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.
The Company's Ordinary Shares are traded on AIM, a market
operated by the London Stock Exchange.
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 2019.
The unaudited condensed half-yearly financial statements were
approved by the Board of Directors on 10 December 2019.
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 2019. 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 management to make judgments, 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 judgments about carrying values of assets and
liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
Management makes estimates and assumptions concerning the future
of the Company. The resulting accounting estimates will, by
definition, seldom equal the related actual results. Management
believe that the underlying assumptions are appropriate and that
the financial statements are fairly presented. The 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:
NOTES TO THE CONDENSED HALF-YEARLY FINANCIAL STATEMENTS
(continued)
for the six months ended 30 September 2019
4. Critical Accounting Estimates and Judgments (continued)
Judgments Going concern
After making reasonable enquiries, and assessing all data relating
to the Company's liquidity, the directors have a reasonable expectation
that the Company has adequate resources to continue in operational
existence for the foreseeable future and do not consider there
to be any threat to the going concern status of the Company. For
this reason, they continue to adopt the going concern basis in
preparing the financial statements.
Estimates and assumptions
Fair Value of financial instruments
The fair values of securities that are not quoted in an active
market are determined by using valuation techniques as explained
in the IPEV Guidelines, primarily earnings multiples, discounted
cash flows and recent comparable transactions. The models used
to determine fair values are validated and periodically reviewed
by the Company. In some instances, the cost of an investment is
the best measure of fair value in the absence of further information.
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. However,
the discount rates used for valuing equity securities are determined
based on historic equity returns for other entities operating in
the same industry for which market returns are observable. Management
uses models to adjust the observed equity returns to reflect the
actual equity financing structure of the valued equity investment.
Models are calibrated by back-testing to actual results/exit prices
achieved to ensure that outputs are reliable, where possible.
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
at any point after vesting and prior to the Option expiry date.
NOTES TO THE CONDENSED HALF-YEARLY FINANCIAL STATEMENTS (continued)
for the six months ended 30 September 2019
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
2019 2019
GBP'000 GBP'000
Opening valuation 18,110 5,682
Purchases - 9,837
Disposal proceeds (1,374) -
Realised gains 562 (1,377)
Net unrealised change in fair value of financial
assets 800 3,968
18,098 18,110
============= ===================
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
2019 2019
GBP'000 GBP'000
Opening valuation 494 6,728
Purchases 1,033 1,304
Disposal proceeds (345) (7,286)
Realised losses (34) (418)
Net unrealised change in fair value of financial
assets 356 166
1,504 494
-------------- ----------------------
Total value of investments at fair value
through profit or loss 19,602 18,604
============== ======================
There were no transfers between fair value hierarchy levels
during the period (31 March 2019: None).
During the period, the Company swapped 288,458 in Intensity
Therapeutics Incs with Portage Biotech Inc. for a consideration of
$1,298,061 represented by 12,980,610 ordinary shares.
The valuations used to determine fair values are validated and
periodically reviewed by experienced personnel and are in
accordance with the International Private Equity and Venture
Capital Valuation Guidelines. The valuations, when relevant, are
based on a mixture of:
-- third party financing (if available);
-- cost, where the investment has been made during the year and
no further information has been available to indicate that cost is
not an appropriate valuation;
-- proposed sale price;
-- discount to NAV calculations;
-- discount to last traded price; and
-- discounted cash flow.
NOTES TO THE CONDENSED HALF-YEARLY FINANCIAL STATEMENTS
(continued)
for the six months ended 30 September 2019
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.
Management information for the Company is provided internally to
the management for decision-making purposes. The management's asset
allocation decisions are based on an integrated investment strategy
and the Company's performance is evaluated on an overall basis. The
single segment is investments in companies which have significant
intellectual property rights which they are seeking to exploit,
principally within the technology sector (including digital
technology, gaming and content focused businesses) and the life
sciences sectors (including biotech and pharmaceuticals). Initially
the geographical focus will be North America and Europe but
investments may also be considered in other regions to the extent
that the Board considers that valuable opportunities exist and
positive returns can be achieved.
Segment assets
The internal reporting provided to the Board for the Company's
assets, liabilities and performance is prepared on a consistent
basis with the measurement and recognition principles of IFRS.
Segment assets are measured in the same way as in the financial
statements. These assets are allocated based on the operations of
the segment and the physical location of the asset. At 30 September
2019 the cross section of segment assets between geographical focus
and economic sectors were as follows:
Geographical Focus Technology Life sciences Total
sector sector
Private equity investments GBP'000 GBP'000 GBP'000
- North America 5,725 - 5,725
- Europe - 2,500 6,195
- Other 7,682 3,695 7,682
Total segment assets 13,407 6,195 19,602
=========== ============== ========
Segment liabilities
Segment liabilities are measured in the same way as in the
financial statements. These liabilities are allocated based on the
operations of the segment. At 30 September 2019 there were no
segmented liabilities.
Other profit and loss disclosures
At 30 September 2019 the cross section of the realised losses,
unrealised gains and interest income generated from private equity
investments between geographical focus and economic sectors were as
follows:
Geographical Focus Technology Life sciences Total
sector sector
Private equity investments GBP'000 GBP'000 GBP'000
- North America 350 41 391
- Europe - 500 744
- Other 607 244 607
Total gains on investments 957 785 1,742
=========== ============== ========
NOTES TO THE CONDENSED HALF-YEARLY FINANCIAL STATEMENTS
(continued)
for the six months ended 30 September 2019
6. Segmental Information (continued)
All the Company's investment portfolio income was derived from
its investments whose business focus is in the sectors as described
above. The only other revenue generated by the Company during the
period was interest of GBP11,000 (30 September 2018: GBP2,000),
arising from cash and cash equivalents, which was generated in
Guernsey. The Company is domiciled in Guernsey.
7. Profit per Ordinary Share - basic and diluted
The profit per Ordinary Share of 0.77p (30 September 2018:
0.62p) is based on the profit for the period of GBP1,244,000 (30
September 2018: GBP875,000) and on a weighted average number of
161,500,105 Ordinary Shares in issue during the period (30
September 2018: 140,651,009 Ordinary Shares).
The share price of the Ordinary Shares throughout the period,
and as at 30 September 2019, was below the lowest exercise price of
the Options (lowest exercise price of 19.00 pence). Therefore, at
no point during the period, or as at 30 September 2019, did the
Options have any dilutive effect.
8. Dividends
The Directors do not propose an interim dividend for the period
ended 30 September 2019 (30 September 2018: 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 2018: 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 GBP20,401,000 (31
March 2019: GBP19,072,000) and on 161,500,105 Ordinary Shares in
issue at the end of the period (31 March 2019: 161,500,105 Ordinary
Shares).
The share price of the Ordinary Shares throughout the period and
as at 30 September 2019 was below the lowest exercise price of the
Options (lowest exercise price of 19.00 pence). Therefore, at no
point during the period, or as at 30 September 2019, did the Options
have any dilutive effect.
11. Share Capital and Options
30 September 31 March
2019 2019
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:
161,500,104 Ordinary Shares of 1p 1,614 1,614
70,700,709 Deferred Shares of 0.9p 630 630
---------------- --------------
2,244 2,244
================ ==============
Options:
Share options 15,647,992 15,647,992
NOTES TO THE CONDENSED HALF-YEARLY FINANCIAL STATEMENTS
(continued)
for the six months ended 30 September 2019
11. Share Capital and Options (continued)
Ordinary Shares
There were no issue of shares during the period ended 30
September 2019 (31 March 2019: 30,769,230 Ordinary shares at a
price of 13p per share).
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
No issue of Options has occurred during the current period.
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 9
October 2019 the Directors may determine up to a maximum aggregate
nominal amount of 10% 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 2019: 5,413,623). No shares were
repurchased during the period (31 March 2019: Nil).
12. Related Parties
Mr Mellon
Mr Mellon, a director of FastForward until 21 August 2019, is a
life tenant of a trust which owns Galloway Limited ("Galloway"),
which held 10,425,992 (31 March 2019: 10,425,991) Ordinary Shares
in the Company as at 30 September 2019 and at the date of signing
this report. Mr Mellon also holds 5,857,730 (31 March 2019:
5,857,730) shares directly in his own name as at 30 September 2019.
Total direct or indirect holding was 16,283,822 shares (31 March
2019: 16,283,822).
At 30 September 2019 FastForward held 25,978 (31 March 2019:
25,978) Ordinary Shares in The Diabetic Boot Company Ltd ("DBC").
Galloway also holds shares in DBC. The combined shareholding in DBC
is in excess of 30%.
Mr Mellon holds 20,500,000 (31 March 2019: 20,500,000) shares in
EMMAC Life Sciences Limited ("EMMAC"), which equates to 7.1% of the
shares in issue.
Mr Mellon also holds an interest in 3,783,199 shares of
Juvenescence Limited, equating to 17.75% of the issued shares.
Mr Mellon was entitled to an annual salary of GBP30,000, payable
quarterly in arrears.
NOTES TO THE CONDENSED HALF-YEARLY FINANCIAL STATEMENTS
(continued)
for the six months ended 30 September 2019
12. Related Parties (continued)
Mr Burns
Mr Burns, a director of the company, is the legal and beneficial
owner of Smoke Rise Holdings Limited ("Smoke"), which held
1,374,024 (31 March 2019: 1,374,024) Ordinary Shares in the Company
at 30 September 2019 and at the date of signing this report.
Regent Mercantile Holdings Limited ("Regent"), a company in
which Mr Ian Burns is a Director, is a shareholder of Juvenescence.
Regent hold 0.34% of Juvenescence (31 March 2019: 0.34%) (on a
fully diluted basis).
Mr Burns is entitled to an annual salary of GBP24,000, payable
quarterly in arrears.
Mr Abony
Mr Abony, a director of the company, held 14,843,211 (31 March
2019: 14,843,211) Ordinary Shares in the Company at 30 September
2019 and at the date of signing this report.
As at 30 September 2019 FastForward held no non-assessable
series-1 preferred stocks (31 March 2019: 2,527,059) and 1,000,000
(31 March 2019: 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. On 13 May 2019, FastForward
sold the 2,527,059 non-assessable series-1 preferred stocks.
Mr Abony holds US$1m ordinary shares of Juvenescence Limited on
the same terms as the Company.
Mr Abony holds 20,833,333 shares in EMMAC, which equates to 7.2%
of the shares in issue. On 19 November 2019, Mr Abony was appointed
as Chairman of the Board of Directors of EMMAC.
Mr Abony is entitled to an annual salary of GBP250,000, payable
monthly in arrears.
Mr McDermott
Mr McDermott was until December 2018 a part of the corporate
finance team at Optiva Securities Limited, the Company's Broker. A
total of GBP7,472 was incurred by the Company in respect of Broker
fees to Optiva Securities Limited during the period (31 March 2019:
GBP117,000).
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 2019: 11,250,000) shares in EMMAC, which
equates to 3.9% of the shares in issue.
Mr McDermott is entitled to an annual salary of GBP40,000,
payable quarterly in arrears.
Mr De Jersey
During the period Mr De Jersey purchased 400,000 ordinary shares
in the Company. Following the purchase his holding represents 0.25%
of the Company's issued share capital.
Lance De Jersey is entitled to an annual salary of GBP80,000 per
annum.
NOTES TO THE CONDENSED HALF-YEARLY FINANCIAL STATEMENTS
(continued)
for the six months ended 30 September 2019
12. Related Parties (continued)
30 September 2019
Directors' Recognition Total
Remuneration of share based
expense
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
======================= ======================== ================
30 September 2018
Recognition
Directors' of share based
Remuneration expense Total
GBP'000 GBP'000 GBP'000
Ian Burns 22 - 22
Jim Mellon 3 7 10
Lorne Abony 82 61 143
Ed McDermott 20 10 30
127 78 205
============== ================ ========
No pension contributions were paid or were payable on behalf of
the Directors.
13. Events after the financial reporting date
Mr Lorne Abony (Chairman of Fastforward) was appointed as
Chairman of EMMAC (Investee of the Company) on 19 December
2019.
14. Capital management policy and procedures
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.
DIRECTORS
Jim Mellon - resigned 21 August 2019
Ian Burns (Non- Executive Director)
Lorne Abony (Chief Executive Officer and Chairman)
Edward McDermott (Non Executive Director)
Lance De iersey(Finance Director)
Lance De Jersey (Finance Director)
ADVISERS
Administrator, Secretary and Registered Office Nominated Adviser
Vistra Fund Services (Guernsey) Limited Beaumont Cornish Limited
11 New Street 10(th) Floor
St Peter Port 30 Crown Place
Guernsey EC2A 4EB
GY1 2PF London
Registrar Independent Auditor
Link Market Services Limited PricewaterhouseCoopers CI LLP
PO Box 627 Royal Bank Place
Bulwer Avenue 1 Glategny Esplanade
St Sampsons St Peter Port
Guernsey Guernsey
GY2 4LH GY1 4ND
Brokers Guernsey Legal Adviser to the Company
Optiva Securities Limited Collas Crill
2 Mill Street Glategny Esplanade
London St Peter Port
W1S 2AT Guernsey
GY1 1WN
Investor Relations English Legal Adviser to the Company
St Brides Partners Ltd Hill Dickinson LLP
51 Eastcheap The Broadgate Tower
London 20 Primrose Street
London EC2A 2EW
EC3M 1JP London EC2A 2EW
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
Cautionary Statement
The AIM Market of London Stock Exchange plc does not accept
responsibility for the adequacy or accuracy of this release. No
stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein. All
statements, other than statements of historical fact, in this news
release are forward-looking statements that involve various risks
and uncertainties, including, without limitation, statements
regarding potential values, the future plans and objectives of
FastForward Innovations Ltd. There can be no assurance that such
statements will prove to be accurate, achievable or recognizable in
the near term.
Actual results and future events could differ materially from
those anticipated in such statements. These and all subsequent
written and oral forward-looking statements are based on the
estimates and opinions of management on the dates they are made and
are expressly qualified in their entirety by this notice.
FastForward Innovations assumes no obligation to update
forward-looking statements should circumstances or management's
estimates or opinions change.
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
-------------------------- ----------------------
Graham Dickson Optiva Securities Limited Tel: +44 (0) 203
Broker 411 1881
-------------------------- ----------------------
Beth Melluish St Brides Partners Ltd Tel: +44 (0)20 7236
Financial PR 1177
-------------------------- ----------------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR VBLFFKLFZFBE
(END) Dow Jones Newswires
December 11, 2019 02:00 ET (07:00 GMT)
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