e-Therapeutics’ Preliminary Results for the Y...

e-Therapeutics’ Preliminary Results for the Year Ended 31 January 2012

e-Therapeutics plc

e-Therapeutics plc (AIM: ETX), the drug discovery and development company, today announces its preliminary results for the year ended 31 January 2012.

Highlights of 2011/12

(* = events after the 31 January 2012 year end)

Drug discovery renewed
•	Â	New wave of work begins using network pharmacology platform
•		Focus on cancer and neurodegenerative diseases
•		Platform gains further intellectual property protection
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Clinical pipeline advancing
•		UK regulator approves plans for phase I trial of ETS2101 in solid tumours*
•		US regulator approves plans for phase I trial of ETS2101 in brain cancer*
•		Further drugs for infection and depression expected to enter trials in 2012
•		Plans for C. difficile programme ETX1153c revised (announced today)*
•		Extensive clinical data anticipated in 2012 and 2013
		Â
New places, plans and people
•		Drug discovery hub established at Oxford
•		Development programmes reviewed and revised by new Development Director Steve Self
•		Daniel Elger joins as CFO, bringing added biotech, oncology and commercial experience
•		Senior Celgene executive Rajesh Chopra appointed a Non-Executive Director*
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Balance sheet strengthened
•		Equity placing raises net £16.7 million to invest in discovery and development
•		Loan debt of £1.0 million repaid
•		Cash and fixed-term deposits of £13.9 million at 31 January 2012 (2011: £0.9 million) provide working capital into 2014
•		Full-year net loss of £3.2 million (2011: loss of £2.3 million) reflects increasing investment in business

Commenting on the results, Professor Malcolm Young, CEO of e-Therapeutics, said: “We have reshaped the business this year, building a new discovery team around our unique network pharmacology platform and bringing better focus to development of products entering the clinic. These changes underpin our expectation of substantial progress over the next twelve months, beginning with the imminent entry into clinical trials of our cancer drug ETS2101.”

e-Therapeutics’ CFO, Dr Daniel Elger, added: “Our 2012 results reflect increasing investment in drug discovery and drug development made possible by shareholders’ support of a significant capital raise during the year. We are confident that continuing this investment will yield promising new drugs and advance our pipeline towards value-realising partnering deals.”

For more information, please contact:

e-Therapeutics plc
Malcolm Young, CEO
Daniel Elger, CFO
Tel: [phone]
www.etherapeutics.co.uk

Panmure Gordon (UK) Limited
Andrew Burnett / Fred Walsh
Tel: [phone]
www.panmure.com

College Hill
Melanie Toyne Sewell / Jayne Crook
Tel: [phone]
Email:[e-mail]

CommStrat Group (US)
Ted Agne
Tel: [phone]
Email:[e-mail]

Chairman’s Statement

Overview

Our business is focused around two core activities with potential to create significant shareholder value. One is discovery of drugs using our network pharmacology platform. The other is development of those drugs through clinical trials. We have taken substantial steps forward in both areas over the past year, supported by shareholders who have invested significant new funds into the Company.

Drug discovery invigorated

Our network pharmacology platform gives us a distinctive position within the pharmaceutical industry. Most other players seek drugs that act against a single target, usually a particular protein. There are limitations to this approach, especially when tackling complex diseases such as cancer, in which many different proteins become dysfunctional. Network pharmacology provides a means to discover drugs with maximum impact on the whole network of proteins involved in a disease process. Our patents and know-how cover key techniques for analysing such networks and identifying ways to disrupt them. We believe that the platform we have built around these approaches has the potential to identify new and improved treatments for a wide variety of diseases.

Until last year, we pursued one specific application of network pharmacology. Having identified a way of targeting a particular disease network, we sought existing drugs with the desired effect. This is a form of ‘reprofiling’ – finding new uses for known drugs. It carries the significant benefit that any drug with prior evidence of safety in humans can be advanced quickly into new human trials. Using network pharmacology in this way, we identified a number of promising candidates and are now taking several of these rapidly and cost-effectively into clinical trials.

This year, with additional resources to invest, we set up a new drug discovery centre near Oxford. This was officially opened by Prime Minister David Cameron in February 2012. Work at the centre includes evaluation of further reprofiling opportunities, but we recognise that this uses only part of the power of network pharmacology. Many of our latest programmes are therefore designed to seek brand new drugs. This will ultimately allow a greater diversity of outputs from our platform, enabling us to address a wider range of opportunities. At the same time, we have chosen to focus our discovery effort on two therapeutic areas: cancer and degenerative diseases of the nervous system. These are areas in which we believe our platform has particular advantages and in which there are many commercial opportunities associated with unmet medical needs. We continue to improve the fundamentals of our discovery process and to add to our extensive IP estate in network pharmacology: we announced the grant of a further US patent in September and today we announce that we have been granted two further European patents related to our discovery approach.

The renewal and broadening of our discovery efforts is intended to provide a pool of drug candidates from which we will select the most attractive, based on technical, clinical and commercial criteria, to advance into clinical development. It may also lead to opportunities for discovery collaborations with selected pharmaceutical partners.

Into the clinic

At the beginning of the current period our new Development Director, Steve Self, reviewed and revised plans for clinical development of drugs resulting from the Company’s earlier discovery work. Four drugs were prioritised, and we have since been working to prepare these for clinical trials. Progress with each drug is detailed below. Our aim in development is to select the most promising drug candidates from our discovery portfolio and take them forward through value-enhancing steps, such as completion of phase II ‘proof-of-concept’ trials. We plan to realise value through licensing deals with pharmaceutical partners, in which we will grant rights to commercialise products in exchange for upfront and milestone payments, funding of further development and royalties on sales.

ETS2101 (Anti-cancer)

In March 2012 we announced that regulators in the US and the UK had approved plans for phase I testing of our cancer drug candidate ETS2101. Trials in both countries will start shortly. The UK phase I trial will enrol patients with a variety of solid tumours and will evaluate dosing, safety and activity. It will be conducted at two hospitals in northern England. The US trial will have similar aims but will enrol only patients with primary brain cancer (glioma) or cancer from other sites that has spread to the brain. It will be led by a senior investigator at a major centre for the treatment of brain cancer. Our decision to run a focused brain cancer trial in parallel with a broad ‘all-comers’ study is based on particularly promising preclinical data from glioma cell lines and the ability of ETS2101, unlike many current cancer drugs, to cross the blood-brain barrier. We expect initial data from both trials in 2012 and final data in 2013.

ETS2101 is among the reprofiled drugs resulting from our first wave of drug discovery. It was originally developed as a treatment for traumatic brain injury but its potential as a cancer drug was identified by our platform. As mentioned above, one advantage of reprofiled drugs can be prior evidence on safety in humans. We recently licensed rights to the original clinical data for ETS2101, including safety findings, in exchange for modest royalty payments on our future income from the drug. This provides us with an exclusive right to use these data in submissions to drug regulators.

ETX1153c (C. difficile)

ETX1153c is a product that combines two active ingredients to produce a potent effect against the bacterium C. difficile, a cause of serious bowel infections. The combination yields both high potency and exceptionally low rates of resistance. Notwithstanding this activity, we have faced practical issues in devising a formulation for the product in which the ingredients remain sufficiently stable. However, our recent results have shown the potential for a product with a superior profile of potency, low resistance, stability, formulability and patent protection. In line with our determination to invest only in products that we believe have the best features for licensing, we have decided further to research these recent results in our C. difficile programme, and we are ceasing now to signal expected timescales for clinical development. Further investigation is merited by strong preclinical data, which show that ETX1153c is effective against C. difficile strains that are resistant to currently available treatments, indicating the potential for a differentiated position in the market. We will announce new plans for trials if our research yields a strong candidate for development.

ETS6103 (Major depressive disorder)

ETS6103 is being developed for major depressive disorder. We expect to start a randomised phase IIb trial in Q3 2012. This will be conducted in patients who have failed treatment with drugs from the ‘SSRI’ class, a current standard therapy. The phase IIb trial will build on a small phase IIa study that provided encouraging results when it compared ETS6103 with the established drug amitriptyline.

ETX1153a (Hospital infections)

ETX1153a is a topical anti-infective for resistant hospital-based infections, which we expect to enter phase I testing in volunteers in Q4 2012. Latest preclinical data on this agent show a favourable resistance profile.

Improved financial position

In March 2011 we raised £16.7 million net of expenses in an equity placing to new and existing investors. As a result, the Company finished the period with a greatly enhanced cash balance of £13.9 million (2011: £0.9 million).

We used a small proportion of the placing proceeds to remove the debt from our balance sheet, redeeming £1.0 million of loan notes and paying the interest due to the date of redemption. At the same time, a majority of our outstanding warrants were converted into ordinary shares, limiting any future dilution associated with these instruments.

Our increasing investment in discovery and development is reflected in an increase in our net loss to £3.2 million from £2.3 million last year. There were no revenues to offset our operating expenses (2011: nil). The income statement shows tax receivable of £621,000, reflecting R&D tax credits associated with qualifying R&D expenditure. Our improved cash position and the repayment of our debt are reflected in a shift from net financial expenses of £180,000 last year to net financial income of £165,000 in the current period.

The Company’s strategy is to license its products to pharmaceutical companies for late-stage development and commercialisation. The Company may also enter discovery collaborations with selected partners. We anticipate continuing losses until revenues from these sources exceed investment in R&D. As indicated previously, we expect our current funds to support our enhanced investment in discovery and development until 2014 even in the absence of any income from partners.

Organisational changes

In June 2011 we appointed Dr Daniel Elger as Chief Financial Officer. Daniel was previously at Antisoma plc, where he played significant roles in corporate strategy, fundraisings and the acquisition of two US biotech companies. Former Finance Director John Cordiner has left the Company and on behalf of the Board I would like to thank him for his contribution to the Company’s development. In February 2012, we appointed Dr Rajesh Chopra as a Non-Executive Director. Rajesh is Vice President of Translational and Early Drug Development at major US biotech company Celgene Corporation and brings highly relevant experience to our Board.

Outlook

We look forward with confidence based on the carefully planned investment we are making in drug discovery and development. Before the end of this year we expect to see the first findings from our new programme of clinical trials; by the end of next year, we should have phase II data on one drug and phase I data on two more. We are equally excited about the next wave of discovery work with our platform and continue to believe that our unique position in network pharmacology provides a solid basis for sustained value creation.

Professor Oliver James

Chairman

	Â	Â		Â
Consolidated income statement For the year ended 31 January 2012
			2012		2011(1)
Â	Â		£000		£000
Revenue			—		—
Cost of sales	Â		—		—
Gross profit			—		—
Research and development expenditure			(2,898)		(1,679)
Administrative expenses	Â		(1,130)		(796)
Operating loss			(4,028)		(2,475)
Financial income			191		14
Financial expense	Â		(26)		(194)
Loss before tax			(3,863)		(2,655)
Taxation	Â		621		342
Loss for the year	Â		(3,242)		(2,313)
Loss for the year attributable to equity holders of the Company	Â		(3,242)		(2,313)
Loss per share – basic and diluted	Â		(2.47)p		(3.51)p

⁽¹⁾ Certain costs have been reclassified between research and development expenditure and administrative expenses as disclosed in Note 1.

Consolidated statement of comprehensive income For the year ended 31 January 2012	Â		Â
		2012		2011
Â		£000		£000
Loss for the financial year		(3,242)		(2,313)
Other comprehensive income		—		—
Total comprehensive income for the financial year		(3,242)		(2,313)
					Â

Consolidated statement of changes in equity For the year ended 31 January 2012	Â	      Share	Â	      Share	Â	      Warrant	Â	      Retained	Â
		capital		premium		reserve		earnings		Total
Â		£000		£000		£000		£000		£000
As at 1 February 2010		65		7,573		420		(5,572)		2,486
Total comprehensive income for year
Loss for the financial year		—		—		—		(2,313)		(2,313)
Total comprehensive income for year		—		—		—		(2,313)		(2,313)
Transactions with owners, recorded directly in equity
Issue of ordinary shares		1		81		—		—		82
Equity-settled share-based payment transactions		—		—		—		18		18
Total contributions by and distribution to owners		1		81		—		18		100
As at 31 January 2011		66		7,654		420		(7,867)		273
As at 1 February 2011		66		7,654		420		(7,867)		273
Total comprehensive income for year
Loss for the financial year		—		—		—		(3,242)		(3,242)
Total comprehensive income for year		—		—		—		(3,242)		(3,242)
Transactions with owners, recorded directly in equity
Issue of ordinary shares		72		17,610		—		—		17,682
Issue and exercise of warrants		—		288		(288)		—		—
Equity-settled share-based payment transactions		—		—		—		11		11
Total contributions by and distribution to owners		72		17,898		(288)		11		17,693
As at 31 January 2012		138		25,552		132		(11,098)		14,724
											Â

Company statement of changes in equity For the year ended 31 January 2012	Â	    Share	Â	    Share	Â	    Warrant	Â	    Retained	Â
		capital		premium		reserve		earnings		Total
Â		£000		£000		£000		£000		£000
As at 1 February 2010		65		7,573		420		(2,748)		5,310
Total comprehensive income for year
Loss for the financial year		—		—		—		(2,313)		(2,313)
Total comprehensive income for year		—		—		—		(2,313)		(2,313)
Transactions with owners, recorded directly in equity
Issue of ordinary shares		1		81		—		—		82
Equity-settled share-based payment transactions		—		—		—		18		18
Total contributions by and distribution to owners		1		81		—		18		100
As at 31 January 2011		66		7,654		420		(5,043)		3,097
As at 1 February 2011		66		7,654		420		(5,043)		3,097
Total comprehensive income for year
Loss for the financial year		—		—		—		(3,242)		(3,242)
Total comprehensive income for year		—		—		—		(3,242)		(3,242)
Transactions with owners, recorded directly in equity
Issue of ordinary shares		72		17,610		—		—		17,682
Issue and exercise of warrants		—		288		(288)		—		—
Equity-settled share-based payment transactions		—		—		—		11		11
Total contributions by and distribution to owners		72		17,898		(288)		11		17,693
As at 31 January 2012		138		25,552		132		(8,274)		17,548
											Â

Balance sheets At 31 January 2012	Â		Â	  Group			Â	Â	Â	  Company
				2012	Â	2011		2012			Â	2011
Â		Notes		£000		£000		£000				£000
Non-current assets
Property, plant and equipment		2		137		16		137				16
Goodwill		3		—		—		2,824				2,824
Other intangible assets		3		337		272		337				272
Â		Â		474		288		3,298				3,112
Current assets
Trade and other receivables				888		444		888				444
Fixed-term deposits				7,750		—		7,750				—
Cash and cash equivalents		Â		6,156		927		6,156				927
Â		Â		14,794		1,371		14,794				1,371
Total assets		Â		15,268		1,659		18,092				4,483
Current liabilities
Trade and other payables		Â		544		351		544				351
Â		Â		544		351		544				351
Non-current liabilities
Interest-bearing loans and borrowings		4		—		1,035		—				1,035
Â		Â		—		1,035		—				1,035
Total liabilities		Â		544		1,386		544				1,386
Net assets		Â		14,724		273		17,548				3,097
Equity
Share capital		5		138		66		138				66
Share premium		5		25,552		7,654		25,552				7,654
Warrant reserve		5		132		420		132				420
Retained earnings		5		(11,098)		(7,867)		(8,274)				(5,043)
Total equity attributable to equity holders of the Company		5		14,724		273		17,548				3,097
													Â

Statements of cash flow For the year ended 31 January 2012	Â		Â	  Group			Â	Â	Â	  Company
				2012	Â	2011		2012			Â	2011
Â		Notes		£000		£000		£000				£000
Cash flows from operating activities
Loss for the year				(3,242)		(2,313)		(3,242)				(2,313)
Adjustments for:
Depreciation, amortisation and impairment		2, 3		81		135		81				135
Financial income				(191)		(14)		(191)				(14)
Financial expense				26		194		26				194
Equity-settled share-based payment expenses				11		18		11				18
Taxation		Â		(621)		(342)		(621)				(342)
				(3,936)		(2,322)		(3,936)				(2,322)
(Increase)/decrease in trade and other receivables				(116)		(26)		(116)				(26)
Increase/(decrease) in trade and other payables				429		(40)		429				(40)
Tax received		Â		386		473		386				473
Net cash from operating activities		Â		(3,237)		(1,915)		(3,237)				(1,915)
Cash flows from investing activities
Interest received				99		14		99				14
Acquisition of property, plant and equipment		2		(139)		(4)		(139)				(4)
Acquisition of other intangible assets		3		(128)		(130)		(128)				(130)
Increase in fixed-term deposits		Â		(7,750)		—		(7,750)				—
Net cash from investing activities		Â		(7,918)		(120)		(7,918)				(120)
Cash flows from financing activities
Net proceeds from issue of share capital		5		17,682		82		17,682				82
Repayments of loan notes		4		(1,049)		—		(1,049)				—
Loan notes interest paid		Â		(249)		—		(249)				—
Net cash from financing activities		Â		16,384		82		16,384				82
Net (decrease)/increase in cash and cash equivalents				5,229		(1,953)		5,229				(1,953)
Cash and cash equivalents at 1 February		Â		927		2,880		927				2,880
Cash and cash equivalents at 31 January		Â		6,156		927		6,156				927
													Â

Notes

1 Basis of preparation

The preliminary announcement has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards as adopted by the EU (“adopted IFRSs”), IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. It does not include all the information required for full annual accounts.

The financial information set out above does not constitute the Company’s statutory accounts for the years ended 31 January 2011 or 2012. Statutory accounts for the year ended 31 January 2011 have been delivered to the registrar of Companies House. The auditor has reported on those accounts; the audit reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. The statutory accounts for the year ended 31 January 2012 will be delivered in due course.

The preliminary announcement has been prepared using the accounting policies published in the Group’s accounts for the year ended 31 January 2011, which are available on the Company’s website at www.etherapeutics.co.uk, with the exception of the following standards, amendments and interpretations which became effective during the year and were adopted by the Group:

• IFRIC 19 ‘Extinguishing Financial Liabilities with Equity Instruments’ provides guidance if the Group were to undertake a debt for equity swap.

• IAS 24 ‘Related Party Disclosures’ amends the definition of a related party.

The adoption of the above has not had a significant impact on the Group’s loss for the year or equity.

Reclassification

In order to aid comparison and to be consistent with industry sector accounting practices, the Directors consider it more appropriate to classify certain costs that were previously included within Administrative Expenses in the Consolidated Income Statement separately as Research & Development expenditure. The impact of this change is to increase Research & Development expenditure and decrease Administrative Expenses for the year ended 31 January 2011 by £1,679,000. There is no impact on operating loss or on loss per share.

2 Property, plant and equipment	Â		Â		Â
		Plant and		Fixtures
		equipment		and fittings		Total
Group and Company		£000		£000		£000
Cost
Balance at 1 February 2010		111		40		151
Additions		4		—		4
Balance at 31 January 2011		115		40		155
Balance at 1 February 2011		115		40		155
Additions		45		94		139
Balance at 31 January 2012		160		134		294
Depreciation
Balance at 1 February 2010		96		25		121
Depreciation charge for the year		11		7		18
Balance at 31 January 2011		107		32		139
Balance at 1 February 2011		107		32		139
Depreciation charge for the year		10		8		18
Balance at 31 January 2012		117		40		157
Net book value
At 1 February 2010		15		15		30
At 1 February 2011		8		8		16
At 31 January 2012		43		94		137
							Â

3 Goodwill and intangible assets – Group and Company
	Â	Group					Â	Company
			Â	Patents and	Â				Â	Patents and	Â
		Goodwill		trademarks		Total		Goodwill		trademarks		Total
Â		£000		£000		£000		£000		£000		£000
Cost
Balance at 1 February 2010		—		259		259		2,824		259		3,083
Other acquisitions – internally developed		—		130		130		—		130		130
Balance at 31 January 2011		—		389		389		2,824		389		3,213
Balance at 1 February 2011		—		389		389		2,824		389		3,213
Other acquisitions – internally developed		—		128		128		—		128		128
Balance at 31 January 2012		—		517		517		2,824		517		3,341
Amortisation and impairment
Balance at 1 February 2010		—		—		—		—		—		—
Amortisation charge for the year		—		3		3		—		3		3
Impairment charge		—		114		114		—		114		114
Balance at 31 January 2011		—		117		117		—		117		117
Balance at 1 February 2011		—		117		117		—		117		117
Amortisation charge for the year		—		3		3		—		3		3
Impairment charge		—		60		60		—		60		60
Balance at 31 January 2012		—		180		180		—		180		180
Net book value
At 1 February 2010		—		259		259		2,824		259		3,083
At 1 February 2011		—		272		272		2,824		272		3,096
At 31 January 2012		—		337		337		2,824		337		3,161
													Â

Amortisation and impairment charge

Amortisation has been charged on patents for which the registration process is complete. Where the process is incomplete no charge has been raised.

Impairment testing

The goodwill in the Company balance sheet arose following the hive-up of the trade and assets of InRotis Technologies Limited on 15 November 2007.

The goodwill is allocated to drug development activities of the Group. In assessing goodwill impairment, recoverable amount is based on fair value less costs to sell.

The Group carries out a portfolio review at each balance sheet date to establish the economic value of each drug in the patent portfolio. If the economic value of a patent is believed to be lower than the carrying value, the carrying value is reduced accordingly. The economic value is based on estimated future income potential taking into account technical and commercial risks and external information on the likely market demand and penetration for the drugs. The Directors also consider that the market capitalisation of the Group is a market indicator of the value of future income streams. There is a risk that should these estimations require significant downward revision there would be a material adverse impact on the income statement in any one year.

4 Interest-bearing loans and borrowings	Â	Â			Â	Â	Â
		Group					Company
		2012	Â	2011			2012	Â	2011
Â		£000		£000			£000		£000
Loan notes		—		1,035			—		1,035
										Â

The loan notes were redeemed by the Company in March 2011 at a redemption price of £1,049,233, the carrying amount at 31 January 2011 being disclosed net of capitalised arrangement fees of £14,000.

5 Capital and reserves Reconciliation of movement in capital and reserves:	Â		Â		Â		Â		Â
		Share		Share		Warrant		Retained		Total
		capital		premium		reserve		earnings		equity
Group		£000		£000		£000		£000		£000
Balance at 1 February 2009		56		4,684		—		(3,793)		947
Total recognised income and expense		—		—		—		(1,779)		(1,779)
Issue of share capital		9		2,889		420		—		3,318
Balance at 31 January 2010		65		7,573		420		(5,572)		2,486
Balance at 1 February 2010		65		7,573		420		(5,572)		2,486
Total recognised income and expense		—		—		—		(2,313)		(2,313)
Issue of share capital		1		81		—		—		82
Equity-settled share-based payment transactions		—		—		—		18		18
Balance at 31 January 2011		66		7,654		420		(7,867)		273
Balance at 1 February 2011		66		7,654		420		(7,867)		273
Total recognised income and expense		—		—		—		(3,242)		(3,242)
Issue of share capital		72		17,610		—		—		17,682
Issue and exercise of warrants		—		288		(288)		—		—
Equity-settled share-based payment transactions		—		—		—		11		11
Balance at 31 January 2012		138		25,552		132		(11,098)		14,724
											Â

	Â	No. of ordinary shares
		2012	Â	2011
Share capital		‘000		‘000
On issue at 1 February		66,008		65,420
Issued for cash		72,118		588
On issue at 31 January – fully paid		138,126		66,008
					Â

	Â	2012	Â	2011
Â		£000		£000
Allotted, called up and fully paid
138,126,467 (2011: 66,008,532) ordinary shares of £0.001 each		138		66
Â		138		66
Shares classified as liabilities		—		—
Shares classified in shareholders’ funds		138		66
Â		138		66
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In March 2011, the Company raised £17,612,635 (£16,673,562 net of expenses) through a placing of 67,740,904 new ordinary shares; this is reflected in an increase in share capital of £67,741 and a credit of £16,605,822 to the share premium account. Warrants over 677,409 ordinary shares were issued in association with the placing; this is reflected in a debit of £108,385 from the share premium account and a corresponding credit to the warrant reserve.

Before the placing and the issue of new warrants described above, there were warrants outstanding over 3,497,443 ordinary shares. 3,299,111 of these warrants were converted to ordinary shares at the time of the placing, while 198,332 remained unexercised. This conversion of warrants to shares is reflected in a reduction of the warrant reserve by £396,183 and an equal credit to the share premium account. The issue of new shares resulting from this exercise of warrants is reflected in an increase in share capital of £3,299 and a credit to the share premium account of £854,470.

During the period, exercise of options over 1,077,920 ordinary shares by staff and former staff led to an additional increase of £1,078 in share capital and a credit of £148,753 to the share premium account.

The warrant reserve relates to the following warrants:

Issue date

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Exercise price £

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Expiry date

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No. of warrants outstanding at the beginning of the year

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No. of warrants issued during the year

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No. of warrants exercised during the year

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No. of warrants outstanding at the end of the year

March 2009

0.260

16 March 2014

3,497,433

—

(3,299,111)

198,332

March 2011*

0.260

4 March 2014

—

677,409

—

677,409

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* Granted in association with the issue of equity in March 2011.